Winter storm puts pressure on Christmas shipping
NEW YORK -- Will Santa's sleigh be late?
A record number of Americans took to the Web to order holiday gifts after retailers flooded their inboxes with offers of extra discounts, free shipping and easy returns. But a storm that brought heavy winds and snow to much of the Midwest on Thursday -- the heaviest shipping day of the year -- could mean that some packages might not make it under the tree in time for Christmas. That's a headache for retailers, shippers and customers alike who already were experiencing problems because of the surge in shipping this year.
So far, no major disruptions have been reported. Wal-Mart, the No. 2 online retailer behind Amazon.com, said no orders have been delayed. GSI Commerce, which handles online shipping for 70 retailers including Aeropostale and Godiva, said they are monitoring the situation hour-by-hour and so far, deliveries are being made on time. By the time the storm hits the Northeast today, it should be a wintry mix of rain and snow -- nothing bad enough to delay deliveries.
Still, the storm's timing couldn't be worse for the world's largest package delivery company, UPS. Thursday is the Atlanta-based company's busiest day of the year. Before the storm shut down service in some areas, it expected to move 28 million packages Thursday, nearly double an average day.
Both UPS and smaller rival FedEx Corp., which is based in Memphis, Tenn., have extensive contingency plans for blizzards and other inclement weather, including scores of meteorologists on staff to redirect planes and trucks and planes at the ready to replace others that can't take off. The storm led UPS to halt all pickups and deliveries in some parts of Iowa and Nebraska. It had to re-route packages destined for the Des Moines airport, from which many shipments are then moved by truck to their final destinations across the Plains states. Instead, it's moving those shipments out of its hub in Louisville, Ky., until the skies and roads clear, and expects most of the delays to be worked out this weekend.
Even before the storm hit, shipping delays were irking some. Ronni Kenoian, a 24-year-old consumer marketing manager, ordered a $150 bracelet set for her mother-in-law Dec. 4 at Alex and Ani, a jewelry company based in Cranston, R.I. She expected it to arrive within seven to 10 business days. Her credit card was charged but Kenoian said she received no tracking number for the package. With no sign of the bracelet after a week, she phoned and emailed the company but her messages went unanswered. She tried to send a post on social media website Twitter and got a response to send her order number to the company, which she did. Still, nothing.
Finally, Monday evening, she got word that her package would arrive Tuesday, two weeks after placing her order. She also received a coupon for 15 percent off her next online purchase. But the damage had been done.
"On a scale of 1 to 10 of how frustrated I am, I'm like a 12," she said. "I will never, ever order from their website again."
Alex and Ani CEO Giovanni Feroce said the delay is a result of the growing company trying to satisfy a major surge in demand: orders more than tripled this year to $3.3 million from $672,000 last year. Alex and Ani had boosted promotions, too, offering free shipping and 10 to 15 percent off on four key days throughout the season, compared with just one day, Cyber Monday, last year.
"Although it is statistically impossible to get close to 50,000 orders perfect since Cyber Monday, we will always do our best to do just that," Feroce said in an interview.
Almost all retailers offered more free shipping this year. Nine out of 10 retailers planned to offer free holiday shipping, according to Shop.org, which is part of trade group The National Retail Federation.
And free shipping wasn't just an incentive for early shoppers. More than 46 percent of the major online retailers emailed their subscribers on Monday, Dec. 17, a.k.a. free shipping day, with offers to ship gifts free with no minimum purchase. Fewer than 10 percent made that offer last year, according to marketing software company Responsys.
That spurred shoppers to spend more -- online shopping is expected to have risen 17 percent this holiday season to a record $43.4 billion, according to comScore. But with that increase came logistical problems, and not just at small retailers. Karla Neville, 31, who works in national event marketing in New York, was enticed by Gap's offer of 30 percent off everything. She ordered a sweater, belt and tie for her husband from Banana Republic's website, which is owned by Gap Inc.
Gap separated the order into two and sent the sweater and tie by FedEx and the belt by UPS. Neville never received the belt, discovering online that the UPS package had been returned to Gap for reasons unknown. She doesn't want the belt anymore, just a refund.
"I no longer feel confident that if they re-ship it I will get it in time," she said.
Gap spokeswoman Edie Kissko said that the company sometimes sends items separately depending upon what part of the country the order is shipped from and its destination, a common retail practice known as "split shipping." Gap did not comment on the specific incident.
When shipping goes wrong, all is not lost. Good customer service can save a bad experience.
Charles Hansen III, 49, a consultant in Falls Church, Va., tried to buy a salad spinner from a secondary seller on Amazon's Marketplace, but it came crushed in the mail. He dreaded contacting the seller through the online Web form required, but the seller ended up getting right back in touch with him and sent him a new salad spinner within a few days. He didn't even have to send back the crushed one.
"I was apprehensive. I thought 'Oh, great,' especially when I got to the Amazon website and had to go through this cumbersome process," Hansen said. "But I was pleasantly surprised. If it had wound up being a bad experience I could see doing a lot less online next year -- but it turned out very well."AP Business Writer Samantha Bomkamp in New York contributed to this report.