Americans waited until the last minute to buy holiday gifts, but retailers weren’t prepared for
the spike.Heavyspending in the final days of the mostly lackluster season sent salesup 3.5 percent between
Nov. 1 and Tuesday, according to MasterCardAdvisors SpendingPulse, which tracks payments but doesn’t give
dollarfigures.Online shopping led the uptick, with spending up 10percent to $38. 91 billion between Nov. 2
and Sunday, research firmcomScore said."We always have last-minute Charlies, but this yeareven people
who normally complete shopping earlier completed shoppinglater," said Marshal Cohen, chief retail
analyst at market research firmNPD Group.The late surge caught companies off guard. UPS andFedEx failed to
deliver some packages by Christmas due to a combinationof poor weather and overloaded systems, leaving some
unhappy holidayshoppers.Justin Londagin and his wife ordered their 7-year-oldson a jersey of Russell Wilson
of the Seattle Seahawks from NFL’s website on Dec. 19. They paid $12.95 extra for two-day shipping to get
itto their Augusta, Kan., home before Christmas, but it didn’t arrive intime."We had to get creative
and wrote him a note from Santa totell him that the jersey fell out of the sleigh and Santa will get it
tohim as soon as he could," he said.Amazon is offering customerswith delayed shipments a refund on
their shipping charges and $20 towarda future purchase. And other retailers such as Macy’s said they
arelooking into the situation.The last-minute surge this yearsolidifies the increasing popularity of online
shopping, which accountsfor about 10 percent of sales during the last three months of the year.It also
underscores the challenges that companies face delivering on theexperience, particularly during the holiday
shopping season that runsfrom the beginning of November through December.Analysts sayFedEx and UPS typically
work closely with big retailers to get a senseof the volume of packages they’ll handle during peak times
like theholiday season. Extra flights, trucks and seasonal workers can be addedif the projections are
large.But this year, David Vernon, asenior research analyst at Sanford C. Bernstein, said weather played
arole. The early December ice storms in Dallas could have hurtoperations, he said, and packages can start to
accumulate. And that gotcompounded by a late surge in shipments, he said."Clearly, as a group, (they)
underestimated the demand for Internet retailing during the holidays," Vernon said.Anotherproblem was
the growing popularity of retailers offering free shipping.Amazon, for one, has a two-day free shipping
offer that comes with its$79 annual Prime membership. The company said in the third week ofDecember alone,
more than 1 million people signed up for the membership."Franklythe right hand wasn’t talking to the
left," said Forrester analystSucharita Mulpuru. "The marketing teams of a lot of web
retailers(offering free shipping) were not talking to the operations and supplychain teams."The
resulting delayed shipments could be a problemfor shippers. UPS and FedEx did not quantify how many packages
wereaffected but said they were just a small fraction of total holidaydeliveries."The central pillar of
their business is a perceptionof reliability with their customers," said Jeremy Robinson-Leon, COO
ofGroup Gordon, a corporate and crisis PR firm. This year’s snafus "justreally erodes trust among
customers."Still, analysts say peoplewill still shop online. "Consumers tend to have a short
memory,especially if you fast forward to another year," said Andrew Lipsman,vice president of industry
analysis for comScore.Indeed, someshoppers are taking the delays in stride. Traci Arbios, who lives
inClovis, Calif., did about 90 percent of her shopping online. Most itemsincluded free shipping and
everything arrived on time except one packageshe ordered from a seller on eBay that was sent first class by
the U.S.Postal Service on Dec. 12. It still had not arrived on Thursday."Everything arrived on time
except this one item," she said. "It’s not going to stop me from shopping online."___Mae
Anderson reported from Atlanta and Scott Mayerowitz reported from New York.Copyright 2013 The Associated
Press. All rightsreserved. This material may not be published, broadcast, rewritten orredistributed.