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Learning a lesson, retailers offer same-day delivery for the holidays

NEW YORK – A procrastinator’s holiday wish come true: Presents ordered at the last minute can now show up under the Christmas tree that same day.

Amazon, Target and Macy’s and other retailers are offering speedier delivery – including overnight and same-day options – that will continue even past the holidays.

The focus on faster shipping is one way retailers are catering to shoppers who have become increasingly finicky and impatient. Since the recession, it’s not enough for them to get lower prices; they want the deepest discounts. And when it comes to ordering online, orders need to be shipped fast.

“I’ll pay extra to get something right away,” says Wendy Connors, 47, of Menlo Park, Calif., a mother of three.

Quick delivery is important for retailers as they head into the winter holiday shopping season, a time when they can make up to 40 percent of their annual sales. U.S. shoppers are expected to spend $61 billion online in November and December, according to research firm comScore.

Retailers can’t afford a repeat last year when UPS and FedEx failed to deliver some packages by Christmas due to a combination of poor weather and overloaded systems, causing anger among customers. Neither of the top two deliverers said how many packages were delayed, but they noted that it was a small share of overall holiday shipments.

Forrester Research analyst Sucharita Mulpuru fears that the industry could be ill-prepared for the influx of online ordering again this year. She said the growth that UPS and FedEx are forecasting this season is below growth estimates for online spending by the retail industry.

UPS forecasts that it will deliver 585 million packages in December, an 11 percent increase over 2013, and FedEx expects to deliver 290 million packages, an 8.8 percent increase from last year. But comScore expects that online spending will grow by 16 percent, to $61 billion.

It’s not an apples-to-apples comparison, Mulpuru acknowledges, but the difference in estimated percentage growth could spell trouble for shippers and retailers this season. “I don’t know if there’s enough bandwith … to accommodate full demand,” she says.

Retailers are hoping that speedier delivery options will help spread out shipments throughout the season so that there’s not a big crunch toward the end as there was last year.

Amazon expanded its Sunday delivery service, adding more than 10 distribution centers and 15 smaller sorting centers that sort packages by ZIP code and transport them to U.S. Postal Service offices. It also expanded same-day delivery, available for $5.99 per order to members of its $99 annual Prime loyalty program, to more cities. In August, it expanded from four to 12 cities on the East and West coasts.

Other online retailers are offering same-day delivery, too. Google relaunched its Google Shopping service, which costs $10 a month for membership or $4.99 per order, offers same-day delivery from Costco, Toys R Us and other retailers in about six metropolitan areas. And eBay has retooled its “eBay Now” same-day delivery service, introduced in 2012, from a stand-alone app to a method of payment available on its site within the eBay app and website.

“Shoppers don’t shop by saying what do I want now,” says eBay’s head of local service, Tom Allason. “They shop by saying, ‘What do I want, and then when and where can I get it?’ ”

Tech companies aren’t the only ones offering same-day delivery. Macy’s, Bloomingdale’s and six mall chains partnered with Deliv to offer the service in major markets. Deliv founder and CEO Daphne Carmeli says there has been a boost in holiday demand already.