With online shopping on the up, will retailers have Christmas wrapped?

The world of online shopping has exploded with over 21% of retail sales now taking place online, according to etailing trade association estimates.

Figures show that UK shoppers spent £91 billion online in 2013, up by 16% from 2012. The IMRG now predicts a further 17% growth in 2014 and estimates that an incredible £107 billion will be spent online this year.

These are impressive figures, but perhaps not all that surprising considering the convenience and flexibility of online shopping. Today, consumers are able to shop from the comfort of their own homes, compare prices and have access to a wide range of products – all at the click of a button, through sites like onlineshopping.

This also provides a huge opportunity for retailers who are now better placed to understand what customers want and can meet their needs more effectively, depending on how they want to purchase and have their goods delivered. However, there is a downside. In this fast-paced world people are not as patient anymore. They have moved into instant gratification mode and expect to get what they want whenever they want it.

At the same time they are also less willing to sit at home to wait for a parcel or package to be delivered. In fact, just this week, Amazon announced a same day pick up service – ‘Pass My Parcel’- which enables shoppers who order an item before 11.45am, to collect their parcel from 4pm onwards at any one of 500 named newsagents and convenience stores.

However, if a delivery is late or damaged, even if it’s the fault of the postal carrier, more often than not the consumer holds the retailer accountable. In short, a great online shopping experience and a retailer’s reputation are both dependent on the seamless delivery of goods, which can be aided by investment in the latest technologies.

Understanding buying habits

As we head towards the Christmas shopping season – one of the busiest for online purchases – we wanted to take a closer look at whether the buying habits of UK shoppers are changing and what this means for retailers. We commissioned an independent research company, Opinion Matters, to poll 2,000 UK adults, both young and old, to find out their plans for gift buying in the lead up to Christmas. Some of our findings play to stereotype (9% of male adults don’t start their shopping until the week before Christmas Eve), some are somewhat expected (women start early with nearly half intending to start their shopping in September or October), and some were frankly surprising (the 16-24 year old age group appear to be the most organised with over a quarter stating that they planned to start shopping as early as September).

Despite this, over a quarter of respondents said that they intend to leave their Christmas shopping to as late as November and just over one fifth don’t intend to start until December. This poses the question as to whether or not their goods will arrive on time, which could put pressure on retailers to supply and deliver replacement items in very tight timescales.

Do consumers understand all the options available?

Many consumers have a lack of understanding of the various delivery options available, which begs the question: are retailers communicating effectively with consumers? Our research indicates that there is a possible lack of awareness of alternative delivery methods, such as Click and Collect in store, independents like Collect+, or locker boxes such as Inpost and so on. For instance, 85% of respondents stated that they preferred their purchases to be delivered to their home, despite the fact that 75% of them are working full-time. Additionally, 25% of respondents stated that missing a delivery is the main irritation they associate with online shopping. Although there is a lot of capability now available for all sorts of other methods of delivery, it seems the word isn’t getting out there. Retailers need to highlight all of the options available and do all they can to help the customer take control of where and when they want their parcel to either be delivered or picked this Christmas.

Consumers intend to shop online this Christmas

As eCommerce continues to grow (88% of our survey respondents said they will be using the internet to make their Christmas purchases this year), all parts of the ecommerce supply chain need to better understand both consumer buying behaviour and delivery expectations. Retailers need to up their game in order to keep customers happy – especially as the money spent online continues to increase year on year. However, simple things such as streamlining the shipping and delivery of items, through seamless integration from web order to despatch, and making it easy to return goods will go a long way to prevent unhappy consumers this Christmas.

In order for consumers to continue to repeat their online experiences, the order, despatch and delivery mechanisms have to be efficient which, our experience tells us, is not always simple or straightforward. Our focus at NetDespatch is to help the entire eCommerce eco-system to avoid such frustrations, and our goal is to ensure that any retailer or carrier using our platform this Christmas, won’t be trending on social media with disgruntled consumers venting their irritation with failed or late deliveries.

Becky Clark, CEO of NetDespatch

Image: Christmas Moose via Shutterstock