Last year, UPS (NYSE:UPS) was the Grinch that stole Christmas. It came under withering criticism for failing to deliver packages in time for the holidays, recording an on-time rate of just 83%. Amazon.com, which was forced to refund shipping costs to irate customers and hand out $20 gift certificates because of delayed shipments, placed the blame squarely on the shoulders of the carrier. FedEx (NYSE:FDX) was hardly any better with a 90% on-time success rate.
Still you can't just blame the carriers. Retailers promising free or cheap delivery right up to the last possible minute contributed to UPS and FedEx getting slammed by unprecedented demand. So it's important to look at how well the retailers themselves did in getting packages out the door this year.
And the customer service analysts at StellaService did just that, once again testing the Christmas delivery claims of major retailers across the country.
They placed four orders at each of 40 large retailers -- one order in each region of the country (East, South, West, and North) -- within the advertised date for delivery by Christmas. Compared to the year-ago fiasco, the results were encouraging: Orders often left the warehouse on the same day they were placed -- which is all that can really be expected of retailers -- and arrived on time.
But not every retailer was on point.
StellaService found nine of the 40 retailers missed their delivery dates in one region or another. For example, Costco (NASDAQ:COST) processed and shipped one order the same day it came in, but after turning the package over to UPS the estimated delivery date using ground shipping was Dec. 30.
Others, such as Best Buy (NYSE:BBY) used a different delivery method than the one promised. The consumer electronics retailer had promised free two-day shipping up to Dec. 22 via an expedited delivery method. However, despite processing one order on the same day it was received (Dec. 22), it used standard UPS Ground delivery and the order wasn't expected to arrive until Dec. 29, according to StellaService.
The other retailers also missing delivery dates in just one region included:
- Crate & Barrel
- J.C. Penney
Two additional retailers performed even worse in this test because they missed shipments in multiple regions.
One order from Toys R Us was not expected to arrive until after New Year's Day while a second took three days to be processed before being shipped by UPS Ground with delivery not expected till after Christmas. To its credit, though, once the drop-dead date for shipping passed, the toy seller promoted other alternatives such as ship-to-store to help customers get packages in time for the holiday.
The second retailer to really drop the ball was Staples (NASDAQ:SPLS). It not only used standard ground delivery on Dec. 23, which would seemingly preclude its guarantee of the package arriving within one business day, but the office supplies retailer also canceled a second order without notifying the customer, according to StellaService. Staples was also one of three retailers that also missed a delivery in last year's survey by StellaService (Macy's and Kohl's were the other two).
While those were the goats of the season, at least for those who didn't get their packages by Christmas, there were heroes, too, companies that aggressively (and successfully) pushed the envelope on when orders could be made and still arrive on time, according to StellaService.
All four retailers guaranteed orders placed by Dec. 23 would be delivered by Christmas, and they met that promise in all regions, in StellaService's test. Without exception, they either used UPS Next Day Air or FedEx Standard Overnight, according to StellaService's test.
Although guaranteed delivery might not have held for Apple's 128 GB iPhone 6, which still shows a 3-to-5-business-day wait, even in the run-up to Christmas Apple was cranking out production to meet demand.
Sears Holdings (NASDAQ:SHLD) was also singled out in this test for following through with its promised Christmas delivery despite a Dec. 23 cutoff date.
In general, based on what StellaService reported, it appears the retailers and carriers learned from last year's mistakes -- and benefited from better winter weather. Last year vicious snowstorms and bitter cold socked everyone. Still data tracking firm ShipMatrix says UPS and FedEx delivered 98% of their packages on time this year, meaning Christmas came on time this year for most consumers. Now the retailers just need to deal with all the returns.
Follow Rich Duprey's coverage of all the retailing industry's most important news and developments. He owns shares of J.C. Penney Company,. The Motley Fool recommends Amazon.com, Apple, Costco Wholesale, FedEx, Nordstrom, and United Parcel Service. The Motley Fool owns shares of Amazon.com, Apple, Costco Wholesale, and Staples. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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