Survey shows gap between retail delivery models and customer demand

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Temando, a shipping and fulfillment software platform for commerce, has revealed the full findings from its UK retailer and consumer survey.

Temando’s The State of Shipping in Commerce 2016 surveyed over 200 UK micro, small, mid-sized and enterprise retailers and 1,000 consumers, and indicated there is a disconnect between the shipping experiences retailers are offering and the service levels executed (expected) by UK customers.

Time-slot deliveries as standard: 86% of UK consumers have used or would like to use time-slot delivery options at check-out, however only 38% of retailers provide this option at present.

Same-day deliveries: 78% of UK customers would like a same-day delivery option and 47% of customers would be willing to pay a premium for it. However, only 53% of UK retailers currently provide this service. Same-day delivery options are still more popular than hyper local delivery in the UK, but the findings suggest retailers would be well advised to start including it as a premium option as 59% of customers would consider using it as well.

In-store collection options: 88% of UK customers would like to collect their online orders from stores and a quarter are willing to pay a premium for the service. However, at this time, just 55% of UK retailers offer this option.

Early transparency in the purchasing process: UK customers want to know about delivery and shipment costs up-front. Approximately two in every five customers abandon their carts because the cost of shipping was communicated ‘too late’ in the purchasing process.

Temando’s research demonstrates that retailers know that fulfillment and shipping is a key part of their customers’ overall shopping experience, and 85% believe that by offering multiple shipping options they are better able to meet customer expectations. The findings show that UK retailers also understand the financial and reputational costs of not meeting customer expectations; 39% fear that they will lose customer loyalty, 36% think it will negatively image on brand image, and 21% fear negative comments on social media.

Temando’s findings also lend credence to other recent UK research where 60% of respondents highlighted delivery costs as the number one reason for abandoning their online purchases. Despite the best intentions of retailers, however, Temando’s research shows that many are hampered in their desire to offer more flexible and affordable delivery options because of high courier rates, with almost a third citing this as a major problem.

Temando’s research also suggests that many UK retailers are restricted in the number of omnichannel and high-speed shipping services they can offer because of a lack of back office and supply chain automation, with more than a quarter of retailers still manually booking their couriers, as well as a reliance on centralized distribution models. The findings show that 40% of enterprise, 46% of small and 48% of mid-level UK retailers are still shipping their goods from a single warehouse, which makes it much harder to coordinate the faster and more cost-effective shipment and delivery options that customers are coming to expect.

Carl Hartmann, CEO and co-founder of Temando, said, “Shipping and fulfillment are very complex and important processes that are traditionally viewed as a cost center for many businesses. But with smart investments in software and hardware technology, especially the automation of multiple shipping options, many large and small retailers can transform shipping and fulfillment into a bonafide sales tool, a competitive advantage, and a key way to build customer loyalty.”

February 25, 2016

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, editor-in-chief

Helen has worked for UKi Media & Events for nearly a decade. She joined the company as assistant editor on Passenger Terminal World and since progressed to become editor of five publications, covering everything from aviation, logistics and e-commerce to meteorology. She has a love for travel and property and has redeveloped three houses in three years. When she’s not editing magazines, she’s running around after her two boys and their partner in crime, Pete the pug.

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