Next day overtakes economy

According to the latest data from the IMRG MetaPack UK Delivery Index there was also a notable development in the delivery options that shoppers are selecting. For the first time in the history of the Index, the percentage of orders using ‘next day’ (36.7%) as the fulfilment option was higher than those using ‘economy’ (33.8%).

Andrew Starkey, head of e-logistics, IMRG explains: “We’ve been tracking a general increase in the percentage of ‘next day’ orders for a while now, and in August it became the most popular option domestically for the first time. There are a number of factors potentially influencing this – some retailers see delivery as a differentiator and are offering next day as standard, others offer it if the customer’s basket value is above a specific threshold and for others the charge for next day is smaller than it has been on average in previous years. A move toward faster delivery is not unexpected and, for carriers, it doesn’t represent a capacity issue during most of the year – but during peaks such as the Black Friday period, promotion of next day delivery should be handled more cautiously.”

Online retail order growth was up 18.2% year-on-year in August, according to the UK Delivery Index, as shopper confidence appears to be showing some resilience following the Brexit decision.

Since the EU referendum on 23 June, we have tracked an increase in the percentage of orders going cross-border – most likely due to a sharp fall in the valuation of sterling. This continued to be the case in August, with 27.8% of UK orders going to international destinations.

Kees de Vos, chief product officer at MetaPack adds: “August is traditionally a slower month, so it is great to see delivery numbers swinging up again, and cumulative growth back on track. Despite our concerns about the effects of the European Referendum, overseas shoppers are taking advantage of the strength of Sterling which is boosting overseas deliveries with the added bonus that we are seeing a rise in order values from cross-border shopping. With requests for next day deliveries moving ahead of economy delivers we are also witnessing a strengthening in the trend towards speed over cost.”

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Meanwhile the IMRG Capgemini eRetail Sales Index revealed online sales growth of +16% year-on-year (YoY) in September. The September performance tops off a strong quarter, with the Index recording the highest quarterly growth (+17%) since Q1 2014, and notably coinciding with the period following Brexit.

The weather in September was warm, presenting a challenge for fashion retailers as they start promoting their autumn and winter ranges. Despite this, sales growth for the clothing sector maintained what has been a generally positive performance so far in 2016, up a solid +15% – although this was the lowest YoY growth for this sector since April 2016.

Justin Opie, managing director, at IMRG: “Online sales growth post-Brexit has remained strong – this may in part have been driven by increases in international shoppers buying from retailers’ .co.uk sites, so they can pay in sterling and get maximum benefit from the sharp shifts in currency we have seen over the past few months.”

Bhavesh Unadkat, management consultant in retail customer engagement design, Capgemini: “It’s encouraging to see that consumer confidence remains strong. However, a weak pound and an action plan on the horizon for Brexit is cause for concern and could well have a negative effect on confidence. Across the sectors fashion did not perform as strongly as recent months, impacted by a warm and relatively dry September which certainly dampened autumn and winter sales. Interestingly, beyond the traditional sectors that we monitor for, we’ve noticed that food performed strongly as the price war between the grocers intensifies.”

Home Delivery Review 2016

The eighth annual IMRG UK Consumer Home Delivery Review, supported by Blackbay, surveyed 1,300 adults – asking 50 questions to understand their online fulfilment perceptions and expectations. IMRG members can download the full report from the IMRG website.

Highlights include:

• 74% consider a good returns service important when selecting who they shop with.

• Only 61% are satisfied with the returns service they receive.

• Access to real-time tracking and updates on the status of returns considered important.

Andrew Starkey comments: “On the whole the picture emerging from this research is a positive one – with UK shoppers saying they are relatively satisfied with the quality of online delivery. However, there is no room to be complacent because, as services and delivery offers improve, so too customer’s expectations increase – and we can see that they are starting to demand better and more convenient experiences in relation to returns. Customers are also saying they want to be kept informed as to the progress of their delivery so they can plan to be available to receive their orders accordingly.”