The InternetRetailing UK Top500 (IRUK Top500) came out this week, giving an up-to-date and uniquely detailed view of the UK retail landscape. We’ve already looked at a summary of the IRUK Top500’s operations & logistics dimension report – now we’re looking at what it has to say about delivery and collection.
As in the other focus areas of the IRUK Top500, the metrics that underpin the listings in this year’s operations & logistics dimension have continued to evolve. For example, this year, the study assessed retailers’ delivery promises, and the convenience of the services they offer for customers, rather than measuring the effectiveness of an individual delivery.
Next-day delivery is the most commonly found delivery option – offered by 63% of retailers. By contrast, 44% of the Top500 offer named-day Saturday delivery, and nearly 6% offer same-day delivery. The number of retailers offering Sunday delivery has doubled in the last year, to 9%.
One of the points reiterated by many in the industry, and Dick Stead, executive chairman of Yodel is particularly vocal on this point, is that retailers need to differentiate their offerings – if next-day costs the same as 3-5 days, why wait when there’s no advantage? The result being increasing pressure on speed as well as on convenience.
The IRUK Top500’s researchers found that the price of standard delivery averaged £4.30 – although many made no charge at all. “We found quite a lot of retailers would offer slower delivery for free, and then more expedited delivery would cost more,” says Martin Shaw senior InternetRetailing researcher. “That dissuades customers from using it if they don’t need it.”
The chart above shows year-on-year change for the largest 100 ecommerce and multichannel retailers in the Top500
Collection and returns
More retailers now offer click-and-collect services than did at this time last year. In the IRUK Top500 2015, when 44% of traders enabled customers to order online for collection in store, researchers saw the service as a measure of innovation in the Strategy Dimension. This year that proportion has risen to 58% – taking the service mainstream and making it one that’s now expected by customers.
It was significant that a top group of some 50 retailers were all ranked equally in the research for their collection promises. This fact will challenge researchers to develop more rigorous metrics that distinguish between the members of that leading group.
“There’s been a homogenising of the delivery offering,” says Shaw. “Shoppers might not see this in other parts of the world but in the UK it’s very competitive. Effectively, all of the Top50 retailers in this Dimension provide a convenient collections service.”
A detailed assessment of returns can also be found in the IRUK Top500, including which returns methods are the most popular, and the extent to which returns policies influence purchasing decisions.
The retail sector is a more capable place. Smaller companies are gaining access to technology, resulting in performance that can meet market-leading standards. The twin challenges that face today’s retailers are to do more for and with the customer, and to do that more profitably.
Over coming months we’ll continue to measure and assess retailers’ success in doing this. We’ll do that through dynamic indices that will track the activities of market leaders, from the InternetRetailing-Wiser Dynamic Pricing Index, to the InternetRetailing-OneHydra Retail Visibility Index.
We’re excited about the possibilities – but we know that we always have more to learn. We’d welcome your input, and look forward to hearing from you. Get in touch with your ideas and potential data sets via [email protected] or Tweet @etail and @eDeliveryNet using #IRUK500.