With U.S. shoppers purchasing millions of items online within a five-day span over the Thanksgiving weekend, online retailers have to work their supply chains to the maximum to fulfill their fast shipping promises.
However, some of the largest retailers—including Macy’s Inc., Amazon.com Inc., Gap Inc. and Target Corp.—realize that, while offering fast shipping is a nice perk for shoppers, not all shoppers need or want it. Both Macy’s (No. 5 in the 2019 Digital Commerce 360 Top 1000) and Gap (No. 28) offered online shoppers a perk if they opted for slower shipping during the Cyber 5 weekend, which runs Thanksgiving through Cyber Monday.
Macy’s Inc. offered shoppers a $10 Macy’s gift card to be used online or in stores Dec. 4-16 if they opted for 6- to 9-day slow shipping, compared with free shipping of 3 to 6 business days. Macy’s did not respond to a request for comment.
Slower shipping correlates directly to lower shipping costs, says Rob Taylor, CEO of Convey, a last-mile delivery software vendor. However, he could not put an average dollar amount on dollars saved.
Brendan Witcher, principal analyst at Forrester Research Inc., says slower shipping doesn’t necessarily reduce costs for the retailer because many large retailers already have warehouse networks and ship-from-store capabilities that put shoppers within a one-day delivery zone. Instead, the benefit is about easing the stress on their labor and supply capacity, he says.
“The reality is that retailers are stuck between a rock and a hard place,” Witcher says. “They want to offer 2-day or next-day delivery to improve the customer experience, but operationally they have limitations on the number of items they can get shipped out of a warehouse or even stores in a given period of time.”
Gap ran a slow-shipping incentive across all of its ecommerce brands, including Old Navy, Gap, Banana Republic, Athleta and Hill City. From Nov. 27—the day before Thanksgiving—through Dec. 4, shoppers could opt for slower shipping, which it indicated on the cart page, for a chance to win a $200 gift card. Gap selected multiple gift card winners per hour, says a Gap spokeswoman.
This is the third year Gap ran the gift card sweepstakes, the spokeswoman says, without revealing how many shoppers have used this feature.
“The sweepstakes is for customers who may order during our peak week but don’t need their gifts right away,” the spokeswoman says. “Our customers love it, and it allows us to spread out the demand on our distribution centers during one of our busiest weeks.”
This makes sense, as many shoppers that are ordering on Thanksgiving may not need their gifts until Christmas Day, nearly a month later, Convey’s Taylor says.
“It’s easy to get caught up in the hype around shipping,” Taylor says. “There is an expanding array of delivery options, each faster and more convenient than the last, but consumers don’t always need or want everything to be delivered at warp speed.”
Other retailers, including shoe retailer DSW Inc (No. 184) and cosmetics retailer Sephora (owned by LVMH, No. 20), offered bonus loyalty points if they opted for slower shipping during the Cyber 5 period. Amazon (No. 1) and Target (No. 16) launched slower-shipping incentives for shoppers this year and run these programs year-round.
Amazon launched “Amazon Day” in February, which allows its Prime loyalty program members the option to pick a day of the week to have all of their Amazon orders delivered on that day, even though it might be slower than 1 or 2 days. Amazon also offers shoppers a $1 credit toward one of Amazon’s other services, such as digital streaming, or for fast delivery via Prime Now, if they opt for slower shipping. “Millions” of Prime member use Amazon Day, a spokeswoman tells Digital Commerce 360.
In Q2 2019, Target.com gave shoppers the choice to save $1 on her order if she opted to have her order ship in fewer packages, which could lengthen the shipping time.
“Guest response has shown that many guests prefer a reduced number of deliveries, and that speed is not the only factor in a great online shopping experience,” a Target spokeswoman previously told Digital Commerce 360. Target declined to comment on the program during the Cyber 5.
Both large shipping carriers FedEx and UPS have increased their seasonal employees and expanded their processing capacity to keep up with increased demand during the shortened holiday season. For example, FedEx is increasing hours for some of its employees, is hiring about 55,000 seasonal employees and expanding and adding sorting hubs to increase efficiency and to adjust to fluctuations in package volume and location, a FedEx spokeswoman says. At UPS, the shipper is hiring 100,000 seasonal employees and added processing capacity to handle the peak season, a UPS spokeswoman says.Favorite