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The retail winners and losers of the holiday shopping season

December 28, 2015
Aaron Polmeer

By Hilary Milnes

Now that presents are unwrapped, it’s clear which retailers nailed the season of promotions, fast shipping and flexible returns, and which fell short.

Amazon set the bar high with Prime members getting special treatment, basically serving as a Seattle-based Santa for last-minute shoppers. The retailer delivered its final pre-Christmas package at 11:59 p.m. on Christmas Eve. Not everyone was so punctual, however, as companies failed to deliver on their promise to get people their presents before Christmas.

Here are the retailers who won and lost the 2015 holiday shopping season.

Winner: Target
A survey performed by e-commerce platform Vennli found that among 500 holiday shoppers, 69 percent of those who buy last minute said they would do so at Target, which fits nicely with the slew of late December last-minute deals the store offered.

Shoppers also reported taking advantage of Target’s free, seasonal shipping, which guaranteed a Christmas arrival for all orders placed by Dec. 21. Customers could also opt to buy online and pick up in store between Dec. 21 and 6 p.m. on Christmas Eve, and during those days, Target reported seeing 50 percent of Target.com orders set to pick up in store, a jump from 15 percent on an average day.

Following Christmas Day, Target is pulling customers in by offering to replace any unwanted third-party gift card for a Target gift card.

Loser: Gap
The Gap stayed true to form at the end of a dismal year, floundering in the critical week leading up to Christmas. The retailer shared with Racked that, due to an internal glitch, customers who ordered packages to be delivered before Christmas were then given post-holiday estimated arrivals. A Gap representative said on Dec. 23 that the company was doing its best to expedite those packages in time for Christmas.

But the down-to-the-wire mistake was only the latest in a long month of shipping woes for Gap. Customers on Twitter have been expressing frustration that packages ordered on Cyber Monday hadn’t arrived after a few weeks, with time before Christmas running out.

Gap Inc., which owns Gap, Old Navy, Banana Republic and Athleta, is in a funk. In November, it reported comparable sales were down across the company, including at Old Navy, which was the previous bright spot. Comparable sales for both the overall company and Old Navy fell 9 percent year over year. Add a high-stakes holiday shipping disaster to those fledgling numbers and, ouch.

Winner: Zappos
Online retailer Zappos saw an opportunity to get on frazzled and worn down customers’ good sides following Christmas. On Dec. 26, Zappos put out its Happy Returns promotion. The promo gave 500 customers a chance to swap out unwanted gifts, purchased anywhere, by calling a Zappos customer service line. The first 500 customers to call received a shipping label and, upon receipt of the unwanted present, a $100 Zappos gift card. Zappos will then donate the gifts to charity.

Zappos, which worked with Mullen Lowe to create “Happy Returns,” said that the goal of the promo was to bring awareness to its customer service, which year-round offers free shipping and returns. “We believe out-of-the-box thinking has to start internally,” said Kirstin Richmer, who handles awareness marketing at Zappos. “If e-commerce brands build a positive team focused on driving change, the results are limitless.”

Loser: Jet.com
The Amazon competitor made a splash when it launched in July, considering that before it was even up and running as an e-commerce marketplace, the company raked in $225 million in VC funding. Jet.com’s first Christmas, however, has exposed holes in the retailer’s business model, which sources products from warehouses all over the country to minimize retail prices.

With little direct control over its warehouses, Jet.com was unable to compete with Amazon in an important area: fast shipping. Ten days before Christmas, Jet notified customers that it could not guarantee delivery before the holiday due to “nationwide shipping delays that have affected many of our shipping partners.” Jet said it was being careful by cutting off pre-Christmas shipping early, but when Amazon is offering same day and next day deliveries right up to the wire, it’s not much of an actual competition.

Winner: Amazon
Amazon had its biggest holiday shopping season ever. Unlike Jet.com, Amazon was taking orders and delivering them in time for Christmas down to the very last minute — its last Amazon Prime package was delivered at 11:59 p.m. on Christmas Eve. In 20 cities, Amazon offered two-hour delivery, fulfilling one Phoenix customer’s Prime order that was placed at 10 a.m. on Dec. 24 by 2 p.m.

These perks proved worthy for customers: in the third week of December, Amazon Prime gained three million new members who wanted to take advantage of free two-day shipping and free same day delivery, a record breaking number for Amazon. During the holiday season, Amazon broke another record: it shipped out 200 million more products through Prime’s free shipping offer than it did in 2014.

The post The retail winners and losers of the holiday shopping season appeared first on Digiday.

      

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