Shoppers are holding online retailers to heightened expectations for swift and error-free delivery during the 2016 holiday shopping season, a survey shows.
More than one-third of consumers—35.4 percent—will abandon a retailer for shipping a single wrong item, according to the study by voice platform provider Voxware Inc. And shoppers are not letting smaller retailers off the hook. Two-thirds of respondents said they expect a similar or better experience as compared to what larger retailers provide.
Those results show higher standards for the accuracy and speed of holiday e-commerce fulfillment than respondents had in previous years. Voxware asked more than five hundred consumers about their holiday shopping plans, expectations for delivery of items that they purchase online or by phone during the holiday season, and the impact that late or incorrect deliveries have on their future shopping decisions.
One in four shoppers said they expect holiday gifts purchased online or by phone to be delivered within two days... even if they have not requested expedited shipping. In the company's 2014 survey, only 8 percent of respondents had that expectation.
Likewise, 84 percent of consumers said their expectations are higher than they were two years ago, and 78 percent stated that their expectations for on-time and accurate delivery are higher during the holiday season than during other times of the year. The results expand on preliminary findings from the Voxware survey that found that early holiday shoppers have higher expectations for swift delivery than their more leisurely neighbors.
"Although few US retailers promise delivery within two days of an order being placed, there is clearly an increased expectation for speed and accuracy," Voxware President and CEO Keith Phillips said in a release. "Call it the 'Amazon Prime Effect' if you like, but understand that new standards have been set and retailers need to meet or exceed them or risk being passed over by consumers."
The survey also showed that shoppers will punish retailers that wilt under this rising pressure.
27 percent of online or catalog shoppers will altogether abandon shopping with a retailer that makes even one error in product delivery, and 63 percent will jump ship if that retailer makes two to three errors.
19 percent of online or catalog shoppers will abandon shopping with a retailer that delivers a holiday purchase later than promised, and 60 percent will do so if the retailer provides late delivery two or three times.
35.4 percent will abandon shopping with a retailer after receiving a single incorrect item (up from 16.5 percent in 2014), and shipping three or fewer incorrect items will cost a retailer 91.8 percent of their customers (up from 68.4 percent in 2014).
27 percent of respondents expect to be offered some type of compensation—such as a discount, coupon, or credit—from retailers that send them an incorrect item. And 9 percent expect to be offered compensation if items are delivered late.
46 percent of respondents said that they were likely or very likely to publicly share their negative experiences online.
"This survey shows that consumer expectations are at their highest level during the holiday season, with expediency, accuracy, and traceability driving online retail shopping trends. Retailers are facing tremendous pressure to get orders right and get them delivered faster than ever before," said Phillips. "With 77 percent of shoppers intending to have more gifts delivered to themselves this season compared to last year, the stakes are too high for fulfillment failures."
Worldwide air cargo rates rose to a 2024 high in November of $2.76 per kilo, despite a slight (-2%) drop in flown tonnages compared with October, according to analysis by WorldACD Market data.
The healthy rate comes as demand and pricing both remain significantly above their already elevated levels last November, the Dutch firm said.
The new figures reflect worldwide air cargo markets that remain relatively strong, including shipments originating in the Asia Pacific, but where good advance planning by air cargo stakeholders looks set to avert a major peak season capacity crunch and very steep rate rises in the final weeks of the year, WorldACD said.
Despite that effective planning, average worldwide rates in November rose by 6% month on month (MoM), based on a full-market average of spot rates and contract rates, taking them to their highest level since January 2023 and 11% higher, year on year (YoY). The biggest MoM increases came from Europe (+10%) and Central & South America (+9%) origins, based on the more than 450,000 weekly transactions covered by WorldACD’s data.
But overall global tonnages in November were down -2%, MoM, with the biggest percentage decline coming from Middle East & South Asia (-11%) origins, which have been highly elevated for most of this year. But the -4%, MoM, decrease from Europe origins was responsible for a similar drop in tonnage terms – reflecting reduced passenger belly capacity since the start of aviation’s winter season from 27 October, including cuts in passenger services by European carriers to and from China.
Each of those points could have a stark impact on business operations, the firm said. First, supply chain restrictions will continue to drive up costs, following examples like European tariffs on Chinese autos and the U.S. plan to prevent Chinese software and hardware from entering cars in America.
Second, reputational risk will peak due to increased corporate transparency and due diligence laws, such as Germany’s Supply Chain Due Diligence Act that addresses hotpoint issues like modern slavery, forced labor, human trafficking, and environmental damage. In an age when polarized public opinion is combined with ever-present social media, doing business with a supplier whom a lot of your customers view negatively will be hard to navigate.
And third, advances in data, technology, and supplier risk assessments will enable executives to measure the impact of disruptions more effectively. Those calculations can help organizations determine whether their risk mitigation strategies represent value for money when compared to the potential revenues losses in the event of a supply chain disruption.
“Looking past the holidays, retailers will need to prepare for the typical challenges posed by seasonal slowdown in consumer demand. This year, however, there will be much less of a lull, as U.S. companies are accelerating some purchases that could potentially be impacted by a new wave of tariffs on U.S. imports,” Andrei Quinn-Barabanov, Senior Director – Supplier Risk Management Solutions at Moody’s, said in a release. “Tariffs, sanctions and other supply chain restrictions will likely be top of the 2025 agenda for procurement executives.”
As holiday shoppers blitz through the final weeks of the winter peak shopping season, a survey from the postal and shipping solutions provider Stamps.com shows that 40% of U.S. consumers are unaware of holiday shipping deadlines, leaving them at risk of running into last-minute scrambles, higher shipping costs, and packages arriving late.
The survey also found a generational difference in holiday shipping deadline awareness, with 53% of Baby Boomers unaware of these cut-off dates, compared to just 32% of Millennials. Millennials are also more likely to prioritize guaranteed delivery, with 68% citing it as a key factor when choosing a shipping option this holiday season.
Of those surveyed, 66% have experienced holiday shipping delays, with Gen Z reporting the highest rate of delays at 73%, compared to 49% of Baby Boomers. That statistical spread highlights a conclusion that younger generations are less tolerant of delays and prioritize fast and efficient shipping, researchers said. The data came from a study of 1,000 U.S. consumers conducted in October 2024 to understand their shopping habits and preferences.
As they cope with that tight shipping window, a huge 83% of surveyed consumers are willing to pay extra for faster shipping to avoid the prospect of a late-arriving gift. This trend is especially strong among Gen Z, with 56% willing to pay up, compared to just 27% of Baby Boomers.
“As the holiday season approaches, it’s crucial for consumers to be prepared and aware of shipping deadlines to ensure their gifts arrive on time,” Nick Spitzman, General Manager of Stamps.com, said in a release. ”Our survey highlights the significant portion of consumers who are unaware of these deadlines, particularly older generations. It’s essential for retailers and shipping carriers to provide clear and timely information about shipping deadlines to help consumers avoid last-minute stress and disappointment.”
For best results, Stamps.com advises consumers to begin holiday shopping early and familiarize themselves with shipping deadlines across carriers. That is especially true with Thanksgiving falling later this year, meaning the holiday season is shorter and planning ahead is even more essential.
According to Stamps.com, key shipping deadlines include:
December 13, 2024: Last day for FedEx Ground Economy
December 18, 2024: Last day for USPS Ground Advantage and First-Class Mail
December 19, 2024: Last day for UPS 3 Day Select and USPS Priority Mail
December 20, 2024: Last day for UPS 2nd Day Air
December 21, 2024: Last day for USPS Priority Mail Express
Measured over the entire year of 2024, retailers estimate that 16.9% of their annual sales will be returned. But that total figure includes a spike of returns during the holidays; a separate NRF study found that for the 2024 winter holidays, retailers expect their return rate to be 17% higher, on average, than their annual return rate.
Despite the cost of handling that massive reverse logistics task, retailers grin and bear it because product returns are so tightly integrated with brand loyalty, offering companies an additional touchpoint to provide a positive interaction with their customers, NRF Vice President of Industry and Consumer Insights Katherine Cullen said in a release. According to NRF’s research, 76% of consumers consider free returns a key factor in deciding where to shop, and 67% say a negative return experience would discourage them from shopping with a retailer again. And 84% of consumers report being more likely to shop with a retailer that offers no box/no label returns and immediate refunds.
So in response to consumer demand, retailers continue to enhance the return experience for customers. More than two-thirds of retailers surveyed (68%) say they are prioritizing upgrading their returns capabilities within the next six months. In addition, improving the returns experience and reducing the return rate are viewed as two of the most important elements for businesses in achieving their 2025 goals.
However, retailers also must balance meeting consumer demand for seamless returns against rising costs. Fraudulent and abusive returns practices create both logistical and financial challenges for retailers. A majority (93%) of retailers said retail fraud and other exploitive behavior is a significant issue for their business. In terms of abuse, bracketing – purchasing multiple items with the intent to return some – has seen growth among younger consumers, with 51% of Gen Z consumers indicating they engage in this practice.
“Return policies are no longer just a post-purchase consideration – they’re shaping how younger generations shop from the start,” David Sobie, co-founder and CEO of Happy Returns, said in a release. “With behaviors like bracketing and rising return rates putting strain on traditional systems, retailers need to rethink reverse logistics. Solutions like no box/no label returns with item verification enable immediate refunds, meeting customer expectations for convenience while increasing accuracy, reducing fraud and helping to protect profitability in a competitive market.”
The research came from two complementary surveys conducted this fall, allowing NRF and Happy Returns to compare perspectives from both sides. They included one that gathered responses from 2,007 consumers who had returned at least one online purchase within the past year, and another from 249 e-commerce and finance professionals from large U.S. retailers.
The “series A” round was led by Andreessen Horowitz (a16z), with participation from Y Combinator and strategic industry investors, including RyderVentures. It follows an earlier, previously undisclosed, pre-seed round raised 1.5 years ago, that was backed by Array Ventures and other angel investors.
“Our mission is to redefine the economics of the freight industry by harnessing the power of agentic AI,ˮ Pablo Palafox, HappyRobotʼs co-founder and CEO, said in a release. “This funding will enable us to accelerate product development, expand and support our customer base, and ultimately transform how logistics businesses operate.ˮ
According to the firm, its conversational AI platform uses agentic AI—a term for systems that can autonomously make decisions and take actions to achieve specific goals—to simplify logistics operations. HappyRobot says its tech can automate tasks like inbound and outbound calls, carrier negotiations, and data capture, thus enabling brokers to enhance efficiency and capacity, improve margins, and free up human agents to focus on higher-value activities.
“Today, the logistics industry underpinning our global economy is stretched,” Anish Acharya, general partner at a16z, said. “As a key part of the ecosystem, even small to midsize freight brokers can make and receive hundreds, if not thousands, of calls per day – and hiring for this job is increasingly difficult. By providing customers with autonomous decision making, HappyRobotʼs agentic AI platform helps these brokers operate more reliably and efficiently.ˮ