New industry report reveals huge gulf between retailers and consumers over delivery options


A new industry report has revealed a lack of delivery options is impacting online retailers financially and failing to meet customer expectations.

Battling Basket Abandonment - a new whitepaper - has shown retailers to be ‘out-of-touch’ when it comes to meeting consumer demands with 83% of retailers believing they offer a wide range of delivery options yet just 48% consumers agree with this.

The report, which has been produced by GFS, a delivery management company, and independent retail consultancy Retail Economics, has identified that businesses have ‘lost’ £31.5bn in sales annually at the checkout due to delivery-related issues.

A breakdown of the £31.5bn reveals that £7.2bn is attributed to the lack of delivery options, £4.9bn is down to cost expectations, £4.5bn is down to delivery speed and £4.2bn because of the returns policy.

The report also emphasises further discrepancies between customers and retailers on a number of delivery-related issues. Retailers express confidence when it comes to consumer confidence in delivery and returns policy (85%), providing reasonable and transparent delivery costs (84%), offering an easy and frictionless checkout experience (88%), and that customers are satisfied with the speed of delivery (88%). However, this confidence does not stretch to consumers as their feedback ranged from just 54% to 64% to further emphasise the gulf.

In what could be viewed as a wake-up call to the industry, senior ecommerce and supply chain professionals have acknowledged more could be done to enhance the customer experience including expanding delivery options (45%), offering free shipping or reducing costs (44%) and reducing delivery times (42%).

However, they also pointed to the two main barriers in being able to improve delivery options are high operational costs (61%) and working with multiple carriers (41%).

A further challenge for the industry is consumers expect at least five delivery options when getting to the checkout, but research shows only a third of retailers offer this with the average being less than three delivery options.

On a more positive note for retailers and logistics providers, the report did debunk some ‘consumer myths’ as the survey revealed online shoppers would be prepared to pay for premium delivery and return services.

Three in four consumers are willing to pay extra for same day, next day or nominated delivery, while a staggering 95% of millennials are open to paying for a premium delivery service.

This is replicated with returns, however there is a discrepancy of attitudes amongst the age groups as 76% of under-45s will pay for hassle-free return options. By contrast, only 34% of over-45s will pay.

Serial online shoppers, those who purchase goods at least once a fortnight, are also willing to pay for ‘hassle-free’ returns more than those who buy once a month or less.

To support the industry, the whitepaper also recommends five strategies ecommerce businesses could adopt to improve the customer experience and reduce sales lost at checkout.

GFS Executive Board Member, Bobbie Ttooulis said: "The research validates, and more importantly puts a value on, what we’ve always known to be true; that lack of delivery options results in lost sales at the checkout.

“In our experience, retailers are well aware of this but struggle to overcome the internal costs and complexities of working with multiple carriers. That’s why we’re seeing a clear shift away from traditional approaches, with retailers seeking multi-carrier partners to resolve this.”

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