Click, then just wait. And wait
Sunday 19 December 1999
Lands' End (sic) may be confident about its ability to deliver - though performance has yet to be matched against pledge - but a great many other online shopping outlets are not. And America's burgeoning ranks of e-shoppers - three times more than the 3 million last Christmas, according to Andersen Consulting - are not pleased.
Their purchase may, as the promotions say, be "just a click away", but this Christmas Americans are finding that "purchase" is defined more readily as the transfer of money from their credit card than the transfer of goods to their doorstep. What they are learning, to their cost, is that the process of shopping comprises several different stages, and for the moment two of those stages - stocking and delivery - have not kept pace with computerised ordering and payment.
Suddenly, Americans are learning all over again why shops came into being: you can inspect, pay and - unless you inadvertently leave your package by the till - take home what you buy, all at the same time. There are no unwelcome surprises. On the internet, websites are overloaded, popular goods are out of stock, and customer helplines enmesh frustrated shoppers in a labyrinth of holding patterns and recorded messages.
Barnesandnoble.com, Amazon.com and CDnow.com were reported to have run out of the fastest-selling CDs and videogames more than a week ago, with no prospect of restocking before Christmas. Lands' End may promise to deliver in time, but it has already run out of some lines. The delay between an order being taken and matched with the inventory has given some customers conflicting messages about whether their order will be delivered: the words "back order", meaning out of stock and reordered, are the kiss of death.
The inventory problems are eclipsed only by problems at the delivery end. Friday was "peak day" at America's biggest delivery company, UPS, which anticipated handling 18 million parcels, 40 per cent more than on an average day, and around 5 per cent more than the equivalent day last year. Peak day for air delivery services will be Wednesday, with planned delivery of more than 4 million parcels.
UPS does not keep figures to show what proportion of these orders originated by e-commerce, but it does note that "tracking" requests, when people log into their computers to find out where their internet shopping order has got to, have doubled this year to 2 million per day during the Christmas shopping season. So far, it believes it is keeping pace, just. UPS's smaller rival, Federal Express, however, has suspended its "on-time delivery or money back" guarantee for all but its most highly priced services for the period 16 to 25 December.
The key to keeping pace with demand is having enough people and enough vehicles to cope. UPS says that it recruits more than 90,000 temporary workers to supplement its permanent staff of more than 300,000 and adds more than 3,000 lorries to its fleet of 150,000. It also increases its freight flights by 40 per cent.
However, the exceptionally low unemployment rate, currently a little over 4 per cent, has made recruiting seasonal workers difficult this year in every sector of the economy, and delivery and warehousing are no exception. The siting of warehouses and distribution centres in the United States, generally away from centres of population to take advantage of low land prices, makes recruitment all the more difficult and can extend delivery times as well.
The labour shortage and siting of warehouses, though, may not be the only culprits. Analysts at Jupiter Communications say that the e-commerce companies themselves bear some of the blame. "Merchants overallocated their budgets trying to win more customers," said Jupiter's Ken Cassar, "and didn't spend heavily enough to enable themselves to actually fulfil the order volume."
While would-be e-shoppers may be disappointed this year, the e-commerce companies may only create other problems if they succeed in increasing capacity to meet demand before next year's rush. Transporting the goods to the warehouses, and thence to the customer, will require not only more staff, but more vehicles, so clogging roads that are already inadequate to serve the thousands of miles of sprawling suburbia where more than half of all Americans now live.
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