Table of Contents
Executive Summary
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- The market
- Online sales continue to grow strongly
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- Figure 1: All online sales and forecast, 2014-24
- Online to hit nearly a fifth of all sales in 2019
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- Figure 2: Online sales as a % of all retail sales (including VAT), 2014-24
- The first generation of mobile-first shoppers
- Collection accounts for under a fifth of the sector by value
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- Figure 3: Estimated share of online sales, by fulfilment method, 2018
- Companies and brands
- Key third-party players
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- Figure 4: Leading delivery operator turnover, 2017/18
- Parcel boxes enter the market, as businesses react to growing online demand
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- Figure 5: Royal Mail Parcel Postbox, August 2019
- Greener deliveries
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- Figure 6: Amazon Scout, August 2019
- The consumer
- More than nine in 10 shop online
- Nearly half collect online orders
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- Figure 7: How online orders have been received in the past 12 months, July 2019
- Two thirds have faced an issue with a delivery
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- Figure 8: Issues with delivery, July 2019
- Long queues the main issue with collection
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- Figure 9: Issues experienced when collecting products in the past 12 months, July 2019
- Half have made a return and a third purposely order more than they need
- A third often intentionally order more than they need
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- Figure 10: Returns behaviours, July 2019
- Over half are members of a delivery scheme
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- Figure 11: Delivery pass ownership, July 2019
- Delivery passes encourage more frequent and impulse shopping
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- Figure 12: Behaviours of delivery pass holders, July 2019
- Concerns around level of packaging could put shoppers off
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- Figure 13: Attitudes towards delivery, collection and returns, July 2019
- What we think
Issues and Insights
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- The need to make online more sustainable
- The facts
- The implications
- Tackling the returns problem
- The facts
- The implications
- In-home delivery, the next step?
- The facts
- The implications
The Market – What You Need to Know
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- Confidence is holding up well despite uncertainty
- The first generation of mobile-first shoppers
- Online sales continue to grow strongly
- Collection accounts for just under a fifth of all online sales by value
Market Drivers
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- Despite uncertainty confidence has held up…
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- Figure 14: Mintel Financial Confidence Tracker, January 2017-August 2019
- …helped by growing real incomes
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- Figure 15: Real incomes: CPIH versus average weekly earnings, excluding bonus pay, January 2016-August 2019
- Online continues to gain share of the retail sector
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- Figure 16: Online sales as a % of all retail sales (including VAT), 2014-24
- Store-based retailers also benefit from online’s growth
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- Figure 17: Share of all online sales, by type of retail operation, 2014-24
- The final quarter is a strain for logistics
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- Figure 18: Online as a % of all retail sales, by month, January 2017-August 2019
- The first group of mobile-first shoppers
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- Figure 19: Devices used to shop online, by age, May 2019
Online and Collection Market Size
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- Online market grows by 14.4% in 2018
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- Figure 20: All online sales and forecast, 2014-24
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- Figure 21: All online sales and forecast, at current and constant prices, 2014-24
- Fashion the largest online market
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- Figure 22: Online estimated sales by product, 2018
- Courier and express delivery market continues to soar
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- Figure 23: UK courier and express delivery market value, £ billion, and volume, packages, 2014-2018
- Click-and-collect market size
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- Figure 24: Estimated share of online sales, by fulfilment method, 2018
- Figure 25: Estimated collection market size, 2015-18
The Consumer – What You Need to Know
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- More than nine in 10 shop online
- Nearly half collect online orders
- Two thirds have faced an issue with a delivery
- Long queues the main issue with collection
- Half have made a return and a third purposely order more than they need
- Over half are members of a delivery pass scheme
- Concerns around level of packaging could put shoppers off
- Nearly half are interested in in-home delivery
Online Retail Use and Products Purchased
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- Over nine in 10 shop online
- Fashion still the most popular purchase online
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- Figure 26: Online purchases made in the last 12 months, July 2019
- Repertoire of products purchased online
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- Figure 27: Repertoire of products purchased in the last 12 months, by age, July 2019
How Purchases Are Received
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- Nearly half of online shoppers collect orders
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- Figure 28: How online orders have been received in the past 12 months, July 2019
- 35-44s most likely to use collection
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- Figure 29: How online orders have been received in the past 12 months, by age, July 2019
Issues Encountered with Delivery
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- Packaging surpasses convenience as foremost concern
- The call for technological advancements
- Deliveries left in an unsafe space
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- Figure 30: Issues with delivery, July 2019
Issues Encountered with Collection
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- Long queues the main issue when collecting products
- Wasting time
- Upping the service stakes
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- Figure 31: Issues experienced when collecting products in the past 12 months, July 2019
Returns Behaviour
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- Just under half have returned online purchases
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- Figure 32: Level of and methods of returning products in the past year, July 2019
- Instances of returns far higher with collection users
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- Figure 33: Methods of returning products in the past year, by how online orders were received in the past year, July 2019
- Returns should be thought of as a key part of the offer
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- Figure 34: The importance of returns, by age, July 2019
- The majority would take vouchers in exchange for extended returns
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- Figure 35: Behaviours relating to the return of online purchases, July 2019
Delivery Passes
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- Over half have a delivery pass, and one in three have Amazon Prime
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- Figure 36: Delivery pass ownership, July 2019
- Delivery pass ownership skews younger
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- Figure 37: Delivery pass ownership, by age and socio-economic group, July 2019
- The majority think having a pass encourages more frequent shopping
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- Figure 38: Behaviours of delivery pass holders, July 2019
- A third don’t have a pass because of fears of being tied in
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- Figure 39: Why consumers are not members of a delivery pass scheme, July 2019
Attitudes towards Sustainability and New Delivery Methods
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- A third say it is easier to cancel orders than risk not being in
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- Figure 40: Attitudes towards new delivery methods, July 2019
- Nearly half are interested in in-home delivery
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- Figure 41: Agreement with attitudes regarding new delivery methods, by age, July 2019
- Concerns around amount of packaging can impact purchase intentions
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- Figure 42: Attitudes towards packaging of online orders, July 2019
- Key online shoppers are more likely to be put off by excessive packaging
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- Figure 43: Agreement with statements regarding packaging in online orders, by age, July 2019
Leading Players – What You Need to Know
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- Royal Mail remains the largest delivery operator in the UK
- Collect+ hits 7,000 locations
- Parcel boxes enter the market, as businesses react to growing online demand
- Greener deliveries
Competitive Strategies – Leading Retailers
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- Amazon the dominant player
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- Figure 44: Leading retailers share of all online sales, 2018
- Amazon
- Grocery: the most complex category to fulfil demand online
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- Figure 45: Online grocery sales as a percentage of grocery retail sales, 2013-23
- Fashion: creating a sustainable future
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- Figure 46: All online clothing, footwear and accessories sales as a percentage of all consumer spending on clothing, footwear and accessories, 2014-24
- Electricals: A category where most demand is fulfilled online
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- Figure 47: online electrical goods sales as a percentage of all spending on electrical goods, 2014-18
Competitive Strategies – Leading Delivery/Collection Operators
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- Courier and express delivery
- Royal Mail
- DHL
- DPD
- Hermes
- UPS
- Yodel
- DX Group
- FedEx UK
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- Figure 48: Leading delivery operator turnover, 2017/18
- Third-party collection
- Doddle
- Collect+
- InPost
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- Figure 49: Third-party collection turnover, 2017/18
- New challengers
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- Figure 50: Food delivery operator turnover, 2017/18
Launch Activity and Innovation
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- The introduction of parcel postboxes
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- Figure 51: Royal Mail Parcel Postbox, August 2019
- Delivered straight to your car boot
- Asda trials 30-minute express grocery delivery service
- Waitrose drivers to accept John Lewis returns
- Amazon pilots ‘Scout’ autonomous delivery service
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- Figure 52: Amazon Scout, August 2019
- Consumer-facing app advancements
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- Figure 53: Hermes Mobile App, August 2019
- Greener deliveries
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- Figure 54: Royal Mail e-Trikes, August 2019
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- VAT
- Abbreviations
- Consumer research methodology
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