The cost of delivery is likely to surpass its convenience as shoppers may have to pay more for less in 2023, according to new research by Metapack which was revealed at The Delivery Conference 2023.
The Ecommerce Delivery Benchmark Report 2023, commissioned by Metapack’s operating company, Auctane, in partnership with economics consultancy, Retail Economics, found inflation will add £18.2bn to UK non-food sales this year, despite volumes decreasing by 4.9%.
This is expected to lead to changing consumer habits, with 74% of UK shoppers planning to change their buying behaviours. While, 34% stated they would only make purchases when necessary and 29% intending to delay or reduce spending.
Furthermore, the research revealed that in 2023 the cost of delivery is expected to be the most important conversion factor impacting retailers. Almost 35% of consumers highlight cost as their biggest priority when it comes to delivery, as speed and convenience become less important.
Operating cost pressures facing businesses may make this a difficult challenge. Over a quarter of retail businesses plan to increase the cost of delivery for their customers, while only 18% reported they won’t increase the price of products, delivery, or returns this year.
As shoppers’ priorities shift towards value, the research highlighted that consumers would rather wait longer for delivery, or compromise on delivery location, rather than cost. Almost 30% of UK consumers reported they would happily switch to parcel lockers or click and collect (‘BOPIS’ – Buy Online Pick Up In Store) services for their online orders.
Mike Hayers, general manager at ShipStation Europe, said: “2023 is set to be a complex year for the ecommerce industry. As our research reflects, the economic backdrop is expected to have an impact on merchant operations and consumer buying behaviours.
“That said, through difficult times, innovation often emerges the winner, and we expect the same to happen this year. We believe omni-channel retail and delivery will become increasingly important as consumers switch between online and offline as they look for the best deals. Merchants who continue to invest and adapt in technology to suit the changing needs of their customers are the most likely to drive loyalty and do well.”
Sustainability and second-hand
Sustainability continues to be top of mind for many shoppers, with 79% stating they would consider green delivery options when ordering online. When going green, 38% of consumers are more willing to accept longer delivery times and almost 35% of consumers are likely to switch to out of home collection, rather than paying extra to offset emissions, with only 7% of shippers willing to consider the latter.
Andrew Norman, general manager at Metapack, added: “Keeping costs down will be the top priority for both retailers and consumers in 2023. As our research highlights, everybody will be looking to get the most bang for their buck from operating costs to delivery costs and product costs. From offering a greater choice of delivery options, having a resilient carrier infrastructure, to providing delightful deliveries experiences, we believe retailers who are able to provide the most value will be the ones who come out on top.”
Interestingly, consumer perceptions around ‘second hand’ are also changing and retailers are responding to growing demand from consumers for economical and sustainable alternatives to buying brand new. Over a quarter of consumers plan to buy second hand or use online resale marketplaces more often in the year ahead. This rises to as high as 40% among consumers who will likely change their behaviour in response to economic pressures. This suggests that cost of living concerns may inadvertently accelerate the shift to a circular economy.