Old Navy Partners With Postmates as Retailers Look for Holiday Shipping Alternatives

Keeping up with customer shipping expectations is a challenge for retailers year-round, but the holiday season is the pinnacle.

A new report by Late Shipment examines the anticipated delivery delays for UPS and FedEx during the 2019 holiday period and predicts that an average of 9% of packages will be delayed across all states. As a result, some retailers, such as Old Navy, are looking for alternative solutions.

As part of its holiday shipping service, Old Navy has announced a partnership with Postmates, a company best known for its delivery of food and grocery items. However, together, the two partners will offer same-day delivery to customers in 4,000 cities across the United States, for a flat fee of $8.99. To utilize the service, customers must opt for “pickup in store” at checkout and then select the Postmates delivery option when they receive their confirmation email.

The news comes as many smaller retailers are struggling to match the delivery guarantees of bigger companies like Amazon, Walmart and Target. And even for businesses with enough scale to establish an infrastructure for same- or next-day delivery, delays incurred by logistics partners can undo their efforts and damage customer loyalty.

Erik Morton, SVP of product and strategy at CommerceHub, the commerce technology platform, noted that now is the time to thinking creatively about order fulfillment. “Retailers will continue to try to best each other when looking to provide the most convenient experience for customers during this season,” he said. “For those retailers who have the capabilities to provide fast shipping, BOPIS and accurate delivery promises, they’re really at an advantage when it comes to meeting consumer expectations for convenience, which leads to increased brand loyalty and more sales.”

The Late Shipment study found that densely populated metropolitan areas and rural areas were most likely to see big delays from UPS and FedEx, with the worst affected areas seeing delays for 16.5% of packages. The two delivery companies are expected to handle over 1.5 billion packages during the season, worth a combined $1 trillion in holiday sales.

While some retailers may want to explore alternatives as Old Navy has done, it is also impossible to eliminate all delays; weather is one of the leading causes of delivery delays, according to Late Shipment’s findings.

Therefore, Morton explained, it is important for retailers to have a strategy in place when things go wrong to minimize the impact on customer relationships. “As major retailers and e-commerce giants work to make same and next-day delivery a reality, it’s imperative that they communicate more clearly with customers in order to set proper delivery expectations,” he said.

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