Promises, promises: retailers fulfilling pre-Christmas online orders

For shoppers who fall spectacularly behind with their Christmas shopping this year, Amazon might just come to their rescue. It has guaranteed that orders placed before 8.30am on Christmas Eve will be delivered by 5pm that day. The service is only available to those in London or Birmingham, but it shows how e-tailers are exploiting every possible hour of trading in the festive run-up.

Last year, Ann Summers was taking online orders until midday on Friday, December 22 and still getting goods out in time for Christmas Day. And, this year, Littlewoods is promising that orders placed before 2pm on Saturday, December 22 will arrive in time for Christmas, while Marks & Spencer is accepting orders for flowers and wine until 5pm on the Saturday.

But such supply chain efficiency at retailers’ busiest time of year takes a huge amount of planning. And Christmas is not a time for delays. Should families not receive their turkeys or children not receive their toys, the PR ramifications are enormous. So how can other retailers replicate this late-trading model and help increase their festive sales?

Firstly, it is important that retailers do not overlook the capabilities of their web sites. Aside from a failure to cope with sudden surges in demand, stock file inaccuracy is a common problem. If the site takes 24 hours to display out-of-stocks and someone orders at the last minute, you will have one very dissatisfied customer. A web site is only as good as its systems.

Littlewoods chief operating officer Keith Basnett points out, though, that the logistics involved in accepting orders online so close to Christmas are not as difficult as some might assume. 30 per cent of its normal demand is for next-day delivery anyway and many customers do not have the mindset that they can leave online ordering so late – in fact, Littlewoods’ busiest trading times are in the first two weeks of December.

“It will take some time before they have the confidence in internet retailers to deliver close to Christmas,” he says. “As a result, we expect demand to be tailing off in the last week.” Nevertheless, it still has the capacity to guarantee all orders are fulfilled and this requires skill.

Currys supply chain director Jeremy Ross says “the devil’s in the detail”. It is easy to overlook things like having the right number of boxes, the right labels, the right shrink wrap, enough pallets and enough staff.

He adds that a contingency plan is crucial. Currys has extended its warehouse operation to be open 24 hours, five days a week in the run-up to Christmas. If required, it also has the capacity to open up over the weekend to cope with extra demand, having briefed staff who may want to work overtime.

Ann Summers senior logistics executive Colin Burman says the retailer gives its staff incentives to work extra hours if required. In terms of its contingency plan, he says it has specific, timely cut-offs, “but also built-in flexibility to extend them if things are going well”.

Close working relationships with delivery partners is also fundamental. In the past, shortages of carriers at Christmas have been responsible for some retailers’ failure to fulfill orders on time. If delivery firms give their retail customers plenty of warning that there is a potential problem, they can adjust what they are able to offer on their web sites accordingly.

As KSA director Ruth Leak says: “If you haven’t got efficient, close working relationships with logistics partners, how do you expect to put this in place at peak trading times?”

Les Flanagan, managing director of operations at Wincanton, says it has conference calls with many of its retail customers as often as three times a day.Littlewoods constantly plans the volumes of parcels and agrees service levels with its delivery partner, Home Delivery Network, so that both parties are aware of up-to-date demands, Basnett adds.

Retailers also need to understand the pressure their delivery partners are under. DHL divisional managing director of home delivery Jonathan Chadburn says that, while they will always cope with extra demand, some decisions at retail head office do little to ease the pressure. “One retailer one year ran a big duvet promotion just before Christmas, so we were collecting hundreds of duvets in addition to the usual orders. These kinds of things are difficult to manage,” he says.

Above all, retailers will be in risky territory if, in an effort to boost their festive customer service, they decide to offer next-day delivery as an exception. They need to get their supply chain running efficiently enough throughout the year first, as the likes of Amazon does. Christmas is not a time for experimentation.