NEW YORK — This year, holiday stress may take on a whole new meaning for online retailers.
Amazon, Walmart and others have promised to deliver more of their orders within 24 hours of customers clicking on “Buy.”
The coming weeks will be the first test of whether they can make that happen during the busy holiday shopping season, when onslaughts of orders and bad weather can lay waste to even the best delivery plans.
It’s an expensive feat that requires not just additional planes and vehicles, but more workers and reams of data to help retailers prepare and predict what shoppers may buy.
Amazon to double holiday hiring
NEW YORK (AP) — Amazon plans to hire 200,000 people for the busy holiday shopping season, double the number of workers it hired a year ago.
The hiring spree is a sign of how quickly the online shopping giant is growing. To keep up with online orders, Amazon has been opening more warehouses, package-sorting hubs and delivery stations. It’s also working to speed up delivery for its Prime members to one day from two.
Other retailers plan to hire in smaller numbers. Target said it would hire 130,000 this year, up 4 percent from a year. And Kohl’s planned to hire 90,000, about the same from 2018.
In the last year, Amazon said, it has promoted about 19,000 workers who packed and shipped orders to manager or supervisor roles.
And the stakes to deliver on time are high. A late package can damage a retailer’s reputation, since shoppers tend to blame them, even if the late arrival is the fault of the delivery company.
“The store made the promise,” said Suketu Gandhi, partner in the digital transformation practice at consulting firm A.T. Kearney.
Amazon learned that six years ago, when UPS and FedEx were crippled by bad weather and last-minute online shopping, causing millions of packages to be late for Christmas. Since then, the online shopping giant has been building its own delivery network to give it more control over when and how its packages are delivered. It has leased jets, built package-sorting hubs at airports and launched a program that lets contractors start businesses delivering packages in vans.
Others are feeling the pressure to keep up with Amazon. When the company introduced two-day shipping about 14 years ago, shoppers expected the same from other stores. That appears to be happening again.
“Customers love two-day delivery,” said Mark Cohen, a retail studies professor at New York’s Columbia Business School. “But they like one day better.”
Smaller retailers, however, will probably be hurt trying to pay for quicker shipping, said Cohen, who used to be an executive at Sears Canada.
The push for even speedier delivery comes after Amazon announced in April that it would cut its delivery for Prime members to one day from two. Walmart and Best Buy followed with their own announcements. Many smaller retailers are also trying to deliver quicker, according to UPS, which said it will have 11 more jets flying this year to keep up.
But many eyes will be on Amazon this holiday season and whether it will keep its delivery promises. That’s because 42 percent of all online sales this holiday season is expected to go to the Seattle company, according consulting firm Bain & Co.
It says it’s up to the challenge.
“We deliver for our customers every day and are confident in our ability to serve customers this holiday season,” Amazon said in a statement.
Amazon already had a chance to test out one-day shipping during its Prime Day event in July, which has become one of the company’s busiest shopping events.
It has another advantage: lots of cash. Amazon expects to spend about $1.5 billion during the holiday season, partly to move items closer to customers and pay for more worker shifts. It says the cost is worth it, since it’s already seeing customers spend more because of the switch to one-day delivery.
The spending starts even before a package hits the road. Retailers are using machine learning technology to predict what shoppers may buy and then placing those items in stores and warehouses closer to them, said Anne Goodchild, the director of the Supply Chain Transportation and Logistics Center at the University of Washington.
Amazon has more than 100 warehouses around the country to store, pack and ship goods. Walmart is using warehouses and stores near customers to pack next-day orders. Best Buy has opened warehouses near the heavily populated cities of Chicago, Los Angeles and New York. Target says more than 90 percent of online orders are packed at stores.
While Target doesn’t promise next-day delivery, it says that half of its two-day deliveries are showing up at customers’ doorsteps the next day. It’s also offering same-day delivery from stores for an extra fee and, like other retailers, it offers an option for customers to buy online and pick up from a store.
