Table of Contents
Executive Summary
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- Impact of COVID-19 on online retailing
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- Figure 1: Short, medium and long-term impact of COVID-19 on online retailing, October 2020
- The market
- Online demand soars in light of COVID-19
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- Figure 2: All online sales and forecast (including VAT), 2015-25
- Collection accounts for just under a fifth of online demand
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- Figure 3: Estimated share of online sales, by fulfilment method, 2019
- Confidence takes a hit leading to customers holding back
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- Figure 4: The financial confidence index, January 2015-October 2020
- The COVID-19 recession has polarised consumer finances
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- Figure 5: Current financial situation compared to a year ago, by household income, October 2020
- Companies and brands
- Amazon the leading player online
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- Figure 6: Leading retailers’ share of all online sales 2019
- Online is not immune to the demand for more sustainable business practices
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- Figure 7: Loop reusable container delivery, 2020
- The consumer
- COVID-19 driving greater purchasing levels across all categories
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- Figure 8: Products purchased in the past year, 2019-20
- Uptick in home deliveries as confidence in collection waivers
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- Figure 9: Methods of delivery used in the past year, 2019 and 2020
- Half of online shoppers have made a return, which is set to grow with greater online penetration
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- Figure 10: How goods were returned in the past year, August 2020
- Nearly half of online shoppers are Amazon Prime members
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- Figure 11: Membership of leading retail delivery pass schemes, 2019 and 2020
- Same-day pricing is sensitive to order value
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- Figure 12: Price-sensitivity for same-day delivery in non-foods, August 2020
- The Royal Mail brand in a strong position based on its heritage
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- Figure 13: Correspondence Analysis, brand profiles of leading delivery companies, August 2020
- Customers recognise the effort of delivery personnel during COVID-19
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- Figure 14: Attitudes towards online retail delivery, collection and returns, August 2020
Issues and Insights
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- Reshaping the logistics network to meet heightened demand caused by COVID-19
- Reinvigorating click-and-collect post-pandemic
The Market – Key Takeaways
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- Confidence and demand take a significant hit from COVID-19
- Online sales soar in 2020 and will be given a longer-term boost by the pandemic
- Collection takes a backseat for now but holds significant long-term potential
Market Drivers
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- Financial confidence took a hit during lockdown but has seem some recovery
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- Figure 15: The financial confidence index, January 2015-October 2020
- Uncertain outlook means consumers cut back
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- Figure 16: COVID-19 Tracker: Impact on non-essential spending, 16 April-1 October 2020
- Retail took a significant hit during the first lockdown, but there are signs of some demand being released
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- Figure 17: Annual % change in retail sales, by category, H1 2020 and July-August 2020
- A polarising recession
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- Figure 18: Current financial situation compared to a year ago, by household income, October 2020
- Online penetration and delivery volumes set to break records in Q4 2020
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- Figure 19: Online sales as a proportion of all retailing and by broad category, January 2019-August 2020
Online and Collection Market Size
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- The impact of COVID-19 on online retailing
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- Figure 20: Short, medium and long-term impact of COVID-19 on online retailing, October 2020
- COVID-19 to drive significant growth in both the short and longer term for online retailing
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- Figure 20: All online sales and forecast (including VAT), 2015-25
- Figure 21: All online sales and forecast, 2015-25
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- Figure 22: Estimated breakdown of all online sales, by product category, 2019
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- Figure 23: All online sales as a percentage of all retail sales, 2015-24
- Collection to take a backseat in 2020 but holds longer-term potential
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- Figure 24: Estimated share of online sales, by fulfilment method, 2019
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- Figure 25: Estimated collection market size, 2015-20
- Market drivers and assumptions
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- Figure 26: Key drivers affecting Mintel’s market forecast, 2015-24 (prepared on 21 October 2020)
- Forecast methodology
The Consumer – Key Takeaways
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- Growth in purchasing levels across all categories in light of COVID-19
- Delivery sees a boost whilst the collection picture is mixed
- Long-term boost to online will also see online returns volumes jump
Online Retail Use and Products Purchased
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- The majority shop online
- Online purchasing has grown significantly year-on-year
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- Figure 27: Products purchased in the past year, 2019-20
- Online demand has remained heightened even as stores have reopened
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- Figure 28: COVID-19 Tracker: Impact on online shopping use, by age, 16 April-1 October 2020
- The repertoire of products purchased online has grown
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- Figure 29: Repertoire of products purchased in the past year, by age, August 2020
How Purchases Are Received
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- Home delivery has become more dominant…
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- Figure 30: Methods of delivery used in the past year, 2019 and 2020
- …as concerns around using click-and-collect rise…
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- Figure 31: Attitudes towards click-and-collect as a result of COVID-19, by age, August 2020
- …but some have been utilising click-and-collect more during the pandemic
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- Figure 32: COVID-19 Tracker: Impact on online shopping use, 16 April-1 October 2020
Returns
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- Half of consumers have made a return in the past year
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- Figure 33: How goods were returned in the past year, August 2020
- Younger consumers more likely to make a return
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- Figure 34: How goods were returned in the past year, by age, August 2020
- COVID-19 will lead to a higher level of returns in the long term for retailers
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- Figure 35: Attitudes towards returning online purchases, August 2020
Delivery Passes
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- Half are members of at least one delivery pass scheme
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- Figure 36: Membership of leading retail delivery pass schemes, 2019 and 2020
- Prime: more than just delivery
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- Figure 37: Amazon Prime services regularly used, by access level to Amazon Prime, October 2019
- Delivery pass ownership skews towards younger online shoppers
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- Figure 38: Delivery pass ownership, by age and socio-economic group, July 2019
Price-sensitivity in Same-day Orders
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- Most still think it is easiest to go in-store for urgent purchases
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- Figure 39: Attitudes towards same-day delivery, by age, August 2020
- Sensitivity in paying for same-day delivery tied to basket size
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- Figure 40: Price-sensitivity for same-day delivery in non-foods, August 2020
- Younger shoppers in general more receptive to paying for same-day delivery
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- Figure 41: Percentage of online shoppers who would pay £5 or more for same-day delivery, by age and order size, August 2020
Perceptions of Leading Delivery Companies
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- Methodology
- The Royal Mail brand in a strong position
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- Figure 42: Correspondence Analysis, brand profiles of leading delivery companies, August 2020
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- Figure 43: Perceptions of leading delivery businesses, August 2020
- Positive perceptions strongest for Royal Mail among older shoppers
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- Figure 44: Perceptions of leading delivery businesses, under-45s vs over-45s, August 2020
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- Figure 45: Perceptions of leading delivery businesses, under-45s vs over-45s, August 2020
The Impact of COVID-19 on Delivery, Collection and Returns
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- COVID-19 drives greater online volumes, placing pressure on logistics
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- Figure 46: COVID-19 Tracker: Impact on product availability, 16 April-1 October 2020
- A greater spotlight is being shone on the hygiene of online deliveries
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- Figure 47: Attitudes towards the impact of COVID-19 on hygiene and deliveries, by age, August 2020
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- Figure 48: Impact of COVID-19 on trying on fashion items, June-October 2020
- COVID-19 may mark a change in attitudes towards delivery personnel
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- Figure 49: Attitudes towards the impact of COVID-19 on delivery services, by age, August 2020
Leading Players – Key Takeaways
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- Amazon the dominant player online
- Scaling of operations key to meeting the challenges of COVID-19
- COVID-19 forces brands to engage with online like never before
Competitive Strategies – Leading Retailers
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- Amazon remains the dominant player
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- Figure 50: Leading retailers’ share of all online sales, 2019
- Amazon
- Grocery: complex and costly for retailers
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- Figure 51: Store-based retailers online grocery sales as a percentage of total sales, 2014-20
- Fashion: online retailers weathering the 2020 storm
- Electricals: online penetration particularly high
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- Figure 52: Online electrical goods sales as a percentage of all spending on electrical goods, 2015-19
Competitive Strategies – Leading Delivery/Collection Operators
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- Courier and express delivery
- Royal Mail
- DPD
- UPS
- DHL
- Hermes Parcelnet
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- Figure 53: Leading delivery operator’s turnover, 2018-20
- Third-party collection
- Collect+
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- Figure 54: Leading third-party collection turnover, 2019
- New challengers: From foodservice to retail delivery
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- Figure 55: Food delivery operator turnover, 2018-19
Launch Activity and Innovation
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- Retailers rush to provide more delivery slots
- Smaller players joining forces to compete
- Partnering to meet demand for deliveries
- Drone delivery dream edges closer
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- Figure 56: Co-op robot delivery service 2020
- Click-and-collect is helping retailers expand reach with lower costs
- Royal Mail launches parcel collection service
- Collection lockers rolled out nationwide in Singapore
- Sustainability on the mind
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- Figure 57: Loop reusable container delivery 2020
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- VAT
- Abbreviations
- Consumer research methodology
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