The time has come for online retailers to prove their worth to shoppers, investors and industry analysts or face extinction.
But the ultimate test this holiday season will not take place in cyberspace. It will be on the roadways and air routes, and in warehouses across the nation, as the avalanche of gifts ordered online are delivered.
The convenience of shopping online is one thing, but if the millions of gifts being purchased are not delivered on time, customers may abandon online shopping as fast as they are now flocking to it.
“It would be impossible to overstate how important this is,” said Barry Parr, director of Internet and E-commerce Strategies in Mountain View. “People are putting a huge measure of trust in these companies to get their gifts to loved ones on time. It is one of those moments when a customer could be easily lost forever if the transaction is not handled correctly.”
At DVD Express in Hollywood, an online seller of DVD movies, company officials have met with representatives from United Parcel Service, the U.S. Postal Service and Federal Express Corp. The company also hired a consultant from Intel Corp. to organize its warehouse floor.
“It is very important that the transaction goes smoothly for the customer,” said Susan Daniher, vice president of marketing for DVD Express. “Internet shopping needs to be more convenient than going to a store. If they get an e-mail after they have purchased an item that says it is not in stock, or an item doesn’t arrive on time it is not convenient.”
Cooking.com, a 2-month-old Idealab start-up that sells gourmet food products and kitchenware, also met with all of the major shippers to plan for the increase over the holidays. The Santa Monica-based company was assured by UPS and other carriers that they would be prepared to handle the ballooning volume of products being purchased online.
“They showed an incredible level of commitment,” said J.J. Ramberg, manager of marketing for Cooking.com. “We are more than confident that our customers’ purchases will arrive on time.”
In fact, shipping companies have been making preparations since January. All are projecting a record number of parcels to be sent this holiday season.
“Throughout the year we have been expecting this,” said Steve Holmes, spokesman for UPS. “(The increase) is partially due to e-commerce, but we are not quite able to put our finger on the exact percentage of business that will come from those purchases. We are ready, more than ready, for the business.”
Larry Dozier, a spokesman for the U.S. Postal Service, said employees have been meeting and training e-commerce companies on how to ensure that the season runs smoothly. “In Los Angeles we are doing even more because we are expecting a big increase,” he said.
Online retailers are also guarding against late deliveries by setting deadlines. North Hollywood-based Buena Vista Internet Group, Walt Disney Co.’s online division, set Dec. 13 as the cut-off date to order and ensure delivery by Christmas. But customers can buy online gift certificates up until Dec. 24.
“We can handle orders later than (Dec. 13), but we didn’t want any spoiled expectations,” said Chuck Davis, senior vice president of e-commerce. “We want to make sure that they get what they thought they would get, on time.”