Retailers seek to be faster than Santa with deliveries

After the fiasco last year when millions of holiday packages arrived after Christmas, one might have thought retailers would be more cautious this year with their cutoff dates for online orders.

But no.

Big stores are trying to reel in procrastinators with deadlines that are just as late — and even later, in some cases — to order items expected to arrive by Christmas. But shoppers still risk being disappointed since there's not always a guarantee packages will make it.

Friday and Saturday are the last days many retailers have set for items on order to make it before the holiday. But some are pushing deadlines into early next week.

"Overall, we're seeing retailers be a little more aggressive this year," said Steve Osburn, a retail strategist with consulting group Kurt Salmon. "Part of it is there is an extra day in the shipping week."

Christmas fell on a Wednesday last year. This year, it's on a Thursday, giving retailers and their shipping partners an extra weekday to accept orders and race them to customers' doorsteps. "Getting that extra day can be significant," Osburn said. "It's their last chance to squeeze in some additional sales."

Some retailers, most notably Best Buy, waited until this week to post their online deadlines as they weighed factors such as weather forecasts, anticipated number of orders, and how much volume their carriers can accommodate. The Richfield-based electronics retailer said its cutoff will be at 10:30 a.m. Monday for free delivery on thousands of items, which is two days closer to Christmas than last year.

"It is pretty typical for Amazon to set a conservative order cutoff date early in the season and then extend it once we see what weather, capacity and order volume look like," Julie Law, an Amazon spokeswoman, wrote in an e-mail.

She added that the online retailer doesn't plan to extend other deadlines and is "confident" its packages will get to customers on time this year.

Forrester Research projects that online holiday sales will grow 13 percent this year to a record $89 billion.

Of the 47 percent of shoppers who indicated they still had not finished their holiday shopping last week, nearly half of them said they plan to make some of those purchases online, according to a survey for the National Retail Federation.

While many retailers usually require a minimum-size order for free shipping, more than a thousand retailers will waive that requirement and will offer free shipping on any size order on Thursday. Even after the standard shipping deadlines expire, some retailers will offer expedited one-day shipping next week for an extra free.

Some retailers have gone the other direction and built in more cushion. Nordstrom, for example, once again has one of the most aggressive Christmas deadlines this year, offering free delivery in time for Christmas for orders placed by 11 a.m. Tuesday. But that is three hours earlier than its cutoff time last year.

A year ago, a combination of bad winter weather and higher-than-expected online sales contributed to millions of packages arriving after Christmas.

"It was a perfect storm last year," said Jarrett Streebin, CEO of EasyPost, a San Francisco developer of shipping technology. "So far, the weather looks pretty good this year. And you have a lot of infrastructure changes that are going to pay off."

This year, retailers upgraded processes to get shipments out faster. Target, Best Buy, and Macy's are among those who have begun shipping items straight from stores in the last year instead of relying solely on farther-away distribution centers.

Shippers also recalibrated their operations. UPS has boosted its workforce with more than 90,000 seasonal employees and said it is putting thousands more vehicles, trailers and planes in motion. FedEx invested $1.2 billion this year to increase its delivery capacity. The U.S. Postal Service has been delivering packages seven days a week in major cities, including some parts of the Twin Cities, since mid-November and will continue doing so through Christmas.

At the same time, many retailers are pushing consumers to consider using their buy-online-and-pick-up-in-store services, which are more widespread this year. Best Buy will accept online orders for in-store pickup until 4 p.m. on Christmas Eve, two hours later than last year. Its stores will close at 6 p.m. that night. The retailer expects about 60 percent of online orders to be picked up in stores in this final week before Christmas, said Jeff Shelman, a company spokesman.

Minneapolis-based Target has extended its deadline to 5 p.m., three hours later than last year, for in-store pickup. Those orders can be picked up until stores close at 9 or 10 p.m. on Christmas Eve. Eddie Baeb, a Target spokesman, said the retailer saw a "significant spike" in in-store pickup orders after the shipping cutoff date last year and expects the same this year.

But Target decided to keep its last day for free shipping on online orders for delivery by Christmas to Saturday, the same date as last year.

"We wanted to make sure it's a date we can deliver on," Baeb said.

While retailers are better prepared this year, they still acknowledge that some orders might arrive late. While about 15 percent of orders arrived after Christmas last year, retailers are still expecting 8 percent to be late this year, according to a Kurt Salmon survey of 100 retailers in November.