Is shipping slipping? On-time delivery rates for online orders decline in December

As reported by Internet Retailer:
A survey of more than 130,000 consumers finds on-time delivery rates falling, while a separate study shows consumers are much more open to digital gift cards, which require no shipping.
UPS doesn’t appear to be alone when it comes to e-commerce delivery slowdowns this holiday season.
On Dec. 1, the percentage of online buyers reporting that all items in their order were delivered on time was just under 93.5%, according to Bizrate Insights, which looked at results from more than 130,000 shoppers surveyed about their online deliveries made between Dec. 1-10. By Dec. 10, that percentage had slipped to just under 91.5%. Bizrate did not name online retailers or their shipping carriers.
“On-time delivery is quite important to maintaining customer loyalty, especially when there is a holiday or event deadline,” says Hayley Silver, vice president, Bizrate Insights, a division of retail marketing vendor Connexity. “The two percentage point drop that we see across this 10-day period alone equates to tens of thousands disappointed gift buyers.”
Last week, software developer ShipMatrix Inc. said the on-time delivery rate for UPS ground packages fell to 91% the week of Cyber Monday (Nov. 30-Dec. 6), down from 97% in the same period of 2014. The analysis was based on a study of millions of packages delivered from more than 1,000 shipper customers, says Mark D’Amico, analyst with SSJ Consulting Group, a sister company of ShipMatrix.
UPS Inc. says the shipping glitches it experienced were brief and localized, and stemmed from volume surges at certain hubs that a spokesman would not identify.
Unlikely to face shipping delays are digital gift cards. They are gaining ground with consumers this holiday season. 76% of consumers surveyed say they’ll buy at least one digital gift card this holiday season, and that jumps to 84% for respondents between the ages of 18 and 25, according to a study from InComm, a transaction services company that provides gift card and prepaid card services to online retailers. More than 500 respondents were surveyed online in October.
81% of consumers surveyed say they are more interested in purchasing digital gift cards this holiday season than they were two or three years ago, InComm finds. Nearly 90% of respondents ages 18-25 say their interest has increased, and among that same age group, 81% say they are interested in storing and using gift cards on their phones.
But consumers like the option of buying a digital or physical gift card when buying online, whether from a website or mobile sites and apps, the survey finds. A digital card is emailed to the recipient; a physical card is shipped to the recipient. If they receive a digital card, 56% of respondents say they prefer to have the card scanned from their phones than carry an email printout.
Other holiday data: Online shopping on desktops accounted for a jump in daily broadband traffic volumes on Saturday, when traffic volume increased 15%, and Sunday, when it spiked 19%, according to data from the Verizon Retail Index. Those days were the highest traffic numbers since the Black Friday/Cyber Monday weekend.
Mobile traffic driven by e-commerce climbed ahead of the weekend, running 9% above average traffic volume on Thursday and Friday, with peaks mobile volume hitting 21% on Thursday and 20% on Friday, indicating that more consumers were using their smartphones or tablets to shop on the go, according to Verizon. On Saturday, mobile traffic volume was 15% higher than average, while on Sunday it was 16% higher.
“Though overall online traffic volumes remain pretty consistent year over year, the peaks in mobile traffic are striking this season with a pattern suggesting that consumer expectations are being set heading into the weekend,” says Michele Dupré, group vice president of retail, hospitality and distribution for Verizon Enterprise Solutions. “People seem to have a pretty good idea what they will be buying once they have more time to shop.”
 
Ken Wood is the founder of LJM Consultants. LJM helps clients negotiate “Best in Class” UPS/FedEx agreements. LJM was recently named the “best parcel auditing company in America” and was also inducted into Inc. Magazine’s Top 500/5000 fastest growing companies in America for 2013. To learn how LJM Consultants can help your company get the parcel contract you deserve, call 631-844-9500 or email kenwood@myLJM.com.