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December 27, 2013

Upsurge in Holiday Online Shopping Leaves Retailers Struggling to Meet Demand

Some Customers Did Not Receive Purchases on Time for Christmas

Amazon will be doling out $20 gift cards and waiving shipping fees to all of its irate customers who did not receive their parcels on time for Christmas, The Wall Street Journal is reporting.

According to the report, however, the delays were not actually Amazon’s fault but, rather, fell on the shoulders of its delivery services: UPS and FedEx. Both delivery companies have since accepted blame, citing the high package volume this season.

“Demand was much greater than our forecast,” a UPS spokesperson told The Wall Street Journal, adding that inclement weather also caused delays.

An escalation in eCommerce sales took online retailers by surprise this year. According to the National Retail Federation, while online sales usually make up about six percent of overall holiday shopping in the U.S., this year, it rose to 14 percent.

IBM Digital Analytics, meanwhile, says online sales spiked 37 percent during the last shopping weekend before Christmas, compared to the previous year.

It is this escalation in online shopping that likely played the biggest factor in a number of eRetailers — such as Kohl’s and Wal-Mart — being unable to deliver on time for Christmas, retail analysts told the WSJ.

Neither Amazon, Kohl’s nor Wal-Mart would say how many customers were affected.

Kohl’s has promised affected customers it would pay the full cost of all items not delivered in time while Wal-Mart is going the same route as Amazon. The retailer has said it will provide $25 gift cards to all customers who did not receive their packages before Christmas.

 


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