What you need to know
Online retail sales climbed 14.4% in 2018 to reach £65.8 billion and accounted for 18% of all retail sales. Online retail is forecast to grow strongly over the next five years, taking its share to nearly 30% of all retail sales by 2024, and as such the pressures on logistic networks will only grow further. How retailers handle this increased demand will be crucial, not simply to protect margins and profitability of operations but because how retailers fulfil orders is become increasingly important in the pre-purchase decision-making process.
The majority (94%) of online shoppers had products delivered in the past year but overall 45% collected products, with in-store collection (43%) the most popular collection method. Nearly half (49%) returned products purchased online, and the rise of ‘buy-try-return’ behaviours, something 34% say they often do, is a problem in the sector and something a number of retailers are currently attempting to tackle.
With that being said a key barrier to online ordering is not knowing how something will look or fit ahead of buying, with delivery charges a further hurdle to convert potential impulse purchases. Delivery pass schemes, of which 51% of online shoppers are members, can break these barriers down with 57% of delivery pass owners saying that being a member has encouraged them to buy on impulse.
Products covered in this Report
This Report is designed to give a broad overview of consumer attitudes towards and use of delivery, collection and returns methods resulting from online retail purchasing within the UK. This Report is primarily a consumer research-focused one, although market data is used to highlight key trends in the wider retail market.
Throughout the Report we talk in general terms about delivery, collection and returns. For the purpose of this Report they are defined as such:
Delivery is defined as an order that is delivered to a customer’s home, work, place of education or any other location that they have used as a traditional postal address.
Collection is used as a broad term to describe the numerous collection services offered in the UK retail sector. Broadly speaking collection orders can fall into one of three fulfilment methods:
Click-and-collect in-store: This is where payment is taken online and the order is made available for collection at a retailer’s own store or via another retailer’s store through a partnership, eg through Amazon’s Hub scheme.
Reserve-and-collect in-store: This is where no payment is taken at the point of purchase, rather the items are reserved to be collected and paid for in a retailer’s own store.
Click-and-collect at third-party locations: This is where, usually, payment is taken online and then products are made available to collect at a location that is not the retailer’s store. Examples of third-party collection services include collection services such as Collect+, where products are made available at other participating stores, or first- or third-party locker services where products are delivered to and held in lockers for collection.
Return(s) is used to describe any returned goods from an online order. This can be done through postal means, in-store or via a third party.
