Either e-commerce sales are better than expected, or United Parcel Service Inc. (NYSE: UPS), FedEx Corp. (NYSE: FDX) and the U.S. Postal Service are falling down on the job. Or maybe both. A new study from retail research operation Kurt Salmon reports that delivery time of online orders has gotten 20% worse than last year.
However, outside of the top 10 performers, many retailers ended up on the naughty list. The average order-to-delivery time across all 62 retailers studied was 6.9 days—20% slower than the average of all retailers surveyed in last year’s study.
The top performers are Alphabet Inc.’s (NASDAQ: GOOGL) Google, Net-a-Porter, Walgreens Boots Alliance Inc. (NASDAQ: WBA), Amazon.com Inc. (NASDAQ: AMZN), Barneys New York, Cabela’s Inc. (NYSE: CAB), Nike Inc. (NYSE: NKE), Staples Inc. (NASDAQ: SPLS), Toms and Under Armour Inc. (NYSE: UA). The list is based on delivery times of one, two and three days.
And it is the pipelines to consumers that are the choke point:
Higher-than-anticipated e-commerce volumes have stressed carrier networks. For example, 9% of packages sent via UPS Ground encountered some type of unexpected delay in the shipping process. While these are typically small delays and pale in comparison to some retailer-caused delays, they point to a larger problem—a carrier network at capacity.
Open to question is whether slow delivery times will hurt the rapid rise of e-commerce revenue, which has grown at double digits for years, while traditional retail same-store sales have barely risen in single digits. Shoppers might go back to stores, as standing in line is a more certain way to get gifts in hand, as opposed to lost in transit. That is, if the store in question has not hit an inventory problem and run out of some items altogether. That can happen with e-commerce companies too, which makes for slow delivery of items that are not in stock.