CEO Sharon Price John says Build-A-Bear’s old e-commerce system is a big reason for disappointing online sales in December.
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She says she does not anticipate the shipping problems this holiday season to cause any lasting damage to e-commerce or e-retailers, though some merchants, such as Amazon, might be encouraged to rollback delivery guarantees. Amazon set 3 p.m. ET on Saturday, Dec. 21 as the cutoff for Dec. 24 delivery, although it did successfully deliver orders placed later. Amazon is offering some consumers who didn’t get their orders on time gift cards for their trouble, although a spokeswoman says the e-retailer isn’t at fault.
Besides “bruised egos and some finger pointing,” most retailers will escape short-term damage from the holiday shipping problems, says Sucharita Mulpuru-Kodali, an e-commerce analyst for Forrester Research Inc. She estimates that up to 90% of holiday orders arrived on time. “I think if you ordered in November or early December, you were not likely disappointed,” she says. “There are some orders that probably arrived late and there were some Christmas orders that had little room for error that have created some of the loudest complaints and the most colorful stories.”
But longer term, “there will almost inevitably be surge pricing [from the shipping carriers] for the days leading up to the holidays,” she says. “They can't reasonably invest in too much more for just those few days. They need to incent retailers to change behavior. The shippers should have charged higher rates a long time ago.” That could mean e-retailers absorbing at least some of those shipping costs to not alienate consumers who have grown used to free and quick shipping, she adds.
The shipping problems this holiday season also could lead to more delivery pickups at stores and delivery locations operated by UPS, FedEx and the U.S. Postal Service. “It would be faster and cheaper for everyone to just have packages shipped to one of those destinations and let people pick up packages themselves on say Dec. 24 or even Dec. 25,” Mulpuru-Kodali says.
ComScore Inc. says e-commerce spending in the United States last weekend (Friday through Sunday) increased 20% compared to the same weekend in 2012. The estimate from the web measurement firm includes only desktop sales, not mobile sales. ComScore tracks desktop e-retail holiday sales estimates by drawing on online purchase data from its panel of about 1 million U.S. online shoppers and excludes automobile and auction sales.
IBM, meanwhile, says that online sales, including both mobile and desktop sales, increased 37% over the same days, versus the comparable weekend a year ago. IBM bases its estimate on data from about 800 IBM clients the company includes in its IBM Digital Analytics Benchmark Survey.
Both comScore and IBM say much of the discrepancy between the two figures likely has to do with mobile sales. “Assuming mobile commerce sales were especially strong, that could account for most of the [difference] between comScore and IBM,” says Andrew Lipsman, vice president of marketing and insights at comScore. “The final weekend (before Christmas) has more of an in-store focus than traditional e-commerce. It’s possible that heavier in-store correlates with a higher percentage of m-commerce because of showrooming.” ComScore defines showrooming as viewing a retail item in person with the intention of completing the transaction via the Internet, either with a mobile device or via desktop computer.
He adds comScore did see that effect on Black Friday, the day after Thanksgiving and a day many shoppers head to stores to begin their holiday gift buying. On Black Friday, m-commerce accounted for 21% of total online sales, Lipsman says.
A significant percentage of sales this past weekend at web-only retailer Fathead.com came from tablets and phones, says Michael Layne, director of Internet marketing for Fathead.com, No. 333 in the Internet Retailer Top 500 Guide. Smartphones accounted for 16.8% of total online sales over the weekend compared to 10.9% for the comparable weekend a year earlier. Tablets accounted for 13.6% of total sales last weekend compared to 8.7% a year earlier.
Mobile sales as a percentage of total sales are also up for the entire holiday shopping season, Layne says. Smartphone sales accounted for 13.1% of the retailer’s total web sales from Thanksgiving Day through this past weekend compared to 6.4% for the same period a year earlier. Tablets accounted for 14.8% of total sales compared to 11.0% of total online revenue for the same period in 2012.