Shipping Just Gets Harder for E-tailers

Last year at the start of the holiday season, Internet retailers were scrambling and strategizing to make sure they could deliver everything in time for holiday gift giving.

One year earlier, there had been highly publicized debacles involving toys that arrived after Christmas, embarrassing public apologies to customers and bottom lines that cracked under the pressure.

This year, we don't hear as much about fulfillment and timely deliveries as we do about consumer fears about whether it is safe to have packages delivered to their homes.

Every new report of Anthrax in post offices brings heightened awareness of the new threat facing consumers and e-tailers.

Sunny Side Down

September 11th brought new challenges for e-commerce. War, national grief, layoffs and widespread downsizing put a serious dent in consumerism.

Recession equals decreased spending. But no one could have foreseen tainted mail, the death of innocent postal and health-care workers, and the closing of federal buildings.

Most merchants are carrying on as usual. JC Penney (NYSE: JCP) reports it has no plans to alter its shipping procedures. That sentiment is echoed by Lands' End (NYSE: LE) and Target (NYSE: TGT).

Left Behind

Target and Amazon.com, however, appear to be trying to boost Web site sales with limited free-shipping promotions.

A study released by Jupiter Media Metrix found 63 percent of Internet shoppers cited high shipping charges as a deterrent in online buying.

Is the deck stacked against e-tailers? Fears of mystery-powdered packages, plus an increasingly price-conscious constituency, could combine to make this a mediocre holiday shopping season, at best.

If the Shoe Fits

Then there is the issue that an e-tailer is only as good as its last sale.

Take my recent shoe purchase, for example. I bought shoes from a well-known shoe e-tailer that I have frequented for a couple of years. They sent the wrong size. I sent it back. They claimed they never received it. We're still battling.

Our battle is confined to e-mail because my telephone conversations with their customer service center became too frustrating.

More than 60 days have passed, with the company still claiming it never received the returned shoes. Unfortunately, they have a 60-day return policy, clearly stated on the Web site. It appears I'm out about US$100.

While I'm quite ready to give up, consider the same situation if I had been a novice online shopper. Chances are, I might have given up on Internet buying.

Grand Central Station

Too bad I don't live in London.

A British company, Collectpoint, came up with a plan for consumers who make purchases online to pick up their goods at local convenience stores.

That solves a host of problems. First, no more delivery attempts with nobody home. Second, it puts the customer more in control of retrieving an order. And third, it further blends the brick-and-mortar and online worlds.

As for how efficient the system will be, that remains to be seen. I, for one, would appreciate the opportunity to stop by a convenience store on my way home from work to pick up my order.

Measure by Measure

Compounding the shipping dilemma is the fact that every e-tailer comes up with its own criteria for shipping charges.

Nothing has become standard. Some charge by weight, while others charge according the type of merchandise is being bought.

Still others, such as Lands' End, determine shipping charges based on what the customer spends. CDNow charges $3 for the first item, and $1 for each additional item.

From the online shopper's perspective, it appears e-commerce doesn't have its shipping act together, on a number of levels.

What do you think? Let's talk about it.