Home delivery expert Parcelhero has revealed its list of what’s hot and what’s not in e-commerce for the year ahead. It cautions that consumer and political sentiment could become less keen on green as shoppers tighten their belts and the political winds change. In addition, Trump tariffs could push UK traders back into the arms of the EU.
Read on to find out how Parcelhero expects the year to pan out…
What’s not hot
Green delivery growth: It may sound out of touch for us to say the growth in green deliveries could slow in the very month that Amazon has announced the UK’s largest-ever order for electric trucks, especially as last year we listed green packaging and deliveries in our ‘hot’ category. This year, however, we think shoppers’ continued belt-tightening may force them to prioritize economy over eco. Likewise, the spread of populist climate-change-skeptic governments across the West could take the wind out of corporate and international green plans.
Try before you buy: Back in 2017, ASOS paved the way with try before you buy services in the UK, legitimately allowing online customers to try out items before buying. Actively encouraging returns is a costly and distinctly ‘ungreen’ policy, however. It’s therefore not surprising that, at the end of this month, Amazon is closing its Prime Try Before You Buy seven-day return service (launched in 2018 as Prime Wardrobe). We think more retailers will ditch such schemes in favor of AI virtual try-on features.
Drones: Amazon announced it was stepping up its drone delivery service in the UK last year but its impact has been underwhelming. A market for drones to deliver specific items, such as medical supplies, to targeted locations does exist but urban drone deliveries won’t become an everyday occurrence.
USA trade: Currently, the USA is the UK’s largest trading partner. Total UK exports to the USA amount to around £188bn (US$231bn) annually. The problem is, UK companies, along with those of many other countries, could be hit by new tariffs of up to 20% on goods entering the USA as part of President Trump’s ‘America First’ plans. However, while the US goods trade deficit with the EU is around US$213bn, it’s near parity with the UK, so the UK Treasury hopes to dodge Trump’s taxes. That’s debatable and we should certainly plan for a substantial rise in the US$800 de minimis limit, below which e-commerce packages are exempt from duty and tax payments. UK traders pushing their US online sales will be walking a tightrope if the USA’s new External Revenue Service comes knocking.
What’s hot
Mending before spending: There was a quiet sea change in the behavior of consumers and retailers last year, prioritizing repairs over replacements. Currys launched its ‘Repair, not replace’ campaign, revealing UK consumers spend £9bn (US$11bn) each year replacing busted tech because 42% of us automatically assume our damaged gadgets are unrepairable. It says repairs aren’t only good for our pocket but also for the planet. Similarly, John Lewis launched a repair service for garments, accessories and homeware in a trial with Johnsons.
Content creation: The clock’s not going to stop for TikTok, despite the brief shutdown of its US service in mid-January. The video app has now been given a reprieve by President Trump. Here in the UK, no such ban has been proposed and there are now more than 200,000 active businesses on TikTok Shop – a 100% rise over 2023. Daily sales increased by 93% last year, making it a revenue stream that’s hard to ignore. As well as TikTok ‘Live’ shopping, expect AI to play a greater part in marketing content creation this year.
Express/same day and lockers: Research and Markets says the global express delivery market was estimated at US$307.2bn in 2023, and is projected to reach US$415.8bn by 2030, growing at a CAGR of 4.4% from 2023 to 2030. Same-day services are showing particular growth. Our latest research reveals 58% of online shoppers say same-day delivery options are important, up from just 33% back in 2020, and 80% of traders say introducing same-day deliveries boosted revenue orders and customer satisfaction. Our second hot delivery tip is to plan for the growth of ultra-convenient locker deliveries.
EU trade: In Q1 2019, pre-Brexit, UK exports of goods to the EU were worth £46bn, according to Statista. Following Brexit, by Q1 2020, they had fallen to £31.6bn. However, since then the position has stabilized with exports in Q1 2024 worth £42.9bn. It’s true that increased red tape and delays at Customs are still a problem for e-commerce traders. However, if Trump’s threatened tariffs do take effect, the UK and EU may well be pushed back into each other’s arms. With the current government seen as more sympathetic to the EU, a few of the frustrating regulations for smaller UK traders could be eased.