Delivery Matters. Delivery Matters. Understanding the needs of the UK s online shoppers in UK Edition

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1 Home Delivery Matters Leading Insight Online Shopping Delivery Matters Understanding the needs of the UK s online shoppers in 2015 UK Edition

2 Home > Delivery Matters > Contents Home > Delivery Matters > Welcome Contents Online shopping Delivery matters for online shoppers 03 Welcome 04 Trends report 06 Shop mobile 08 Why shop online? 09 The rise (and rise) of the online marketplace 11 Where do you want it? 13 To click and collect? 14 Delivering the goods 16 What about cart abandonment? 20 The importance of Returns 21 Trust Royal Mail 24 About this research 25 We help you deliver 26 Royal Mail services Delivery Matters 2015 Welcome to the 2015 Delivery Matters report. We ve been producing this research for seven years, to help retailers like you understand the behaviour of online shoppers. We also use this information to improve the services we offer, so we can help you deliver more for your customers. We re also extending our research reach in 2015, publishing a new series of reports called International Delivery Matters. They ll focus on the habits of online shoppers in China, Australia, the USA, France and Germany. Plus we recently launched our Returns Special Edition which focuses on what shoppers want when it comes to returning items they have bought online. All available to download soon from royalmail.com/deliverymatters So what s on the UK s delivery landscape for 2015? There s lots of positive news. Most online shoppers say they shop online more than before and there s a rise in the number of shoppers using mobile devices to shop. The perennial problem of cart abandonment is starting to reduce, with fewer online shoppers abandoning their shopping baskets year-on-year. Value for money is still the big issue for online shoppers and it follows that unexpected delivery charges have a big impact on purchasing decisions. And online shoppers are increasingly canny. A quarter are likely to wait for a special sales event like Black Friday before placing an order. We also take a closer look at click and collect, finding that, even if it s free, most shoppers still prefer free home delivery to picking up in-store. As always, we re delighted to share this research with you. We hope it makes your business even more successful in 2015 and beyond. Nick Landon, Managing Director of Royal Mail Parcels Our research was independently conducted by Hall & Partners in April PAGES 2 3

3 Home > Delivery Matters > The trends for 2015 Home > Delivery Matters > So what do online shoppers buy? The trends for 2015 So what do online shoppers buy? The future s looking bright for etailers, with 63% of online shoppers claiming to shop online more than ever before. They re also spending a higher proportion online. 86% of their overall shopping budget goes towards online purchases, compared to just 80% in And the total amount spent online is rising too. Top types of products purchased online in % 10% 20% 30% 40% Clothes (-5) 49% Books (-2) 38% Food / drink (+2) 27% Footwear (0) 26% Computer games or DVDs purchase or rental (-8) 23% 50% No changes clothes and books still hold the top shopping spots. 332 total budget 287 of which 287 is spent online vs. 274 spent online in % of overall shopping budget goes towards online purchases vs. 80% in 2014 Personal electricals (-1) 23% CDs/videos or audio/records (-8) Downloads (-6) 17% 20% Significantly higher or lower than previous time period in 2014 Books PAGES 4 5

4 Home > Delivery Matters > Shop mobile Shop mobile Mobile Phone 24% Q. Which of the following electronic products have you used in the last three months to do your online shopping? (22% in 2014) Tablet 24% (up on last year from 19% in 2014) Online shoppers love convenience, so it s no surprise shopping with mobile devices is on the rise. More online shoppers are using mobile technology, to shop at a time and place which suit them. More online shoppers are using mobile technology, to shop at a time and place which suit them. Laptop 65% (60% in 2014) Desktop 41% (46% in 2014) That said, online shoppers are happy to hang around if they know there s a bargain on the way. Over a quarter said they d be likely to wait for a special sales event like Black Friday or a Bank Holiday sale before placing an order. 26% of consumers would be likely to wait for a special sales event (e.g. Black Friday, Bank Holidays) before placing an order PAGES 6 7

5 Home > Delivery Matters > Why shop online? Home > Delivery Matters > The rise (and rise) of the online marketplace Why shop online? The rise (and rise) of the online marketplace Let s get back to basics. When it comes to online shopping, value for money is king: it s the overall most important reason for shopping online. Convenience factors and stocking the right kinds of products are next. But what makes value for money in online shoppers eyes? Free delivery and free returns are key reasons to shop online, as well as lowest prices - shoppers are looking for the whole package. VALUE FOR MONEY IS KING It s difficult to over-estimate the importance of online marketplaces like Amazon, ebay or Notonthehighstreet.com. A whopping 81% of online shoppers use them, and they re used more or less equally by all genders and ages (although they re a touch less popular with the over 55s). The majority of online shoppers use market places, irrespective of gender or age. 79% males 83% females Free delivery + Free returns = Shoppers are looking for the whole package. Marketplace buyers 81% of online shoppers buy from online marketplaces 82% % % 55+ PAGES 8 9

6 Home > Delivery Matters > The rise (and rise) of the online marketplace Home > Delivery Matters > Where do you want it? Where do you want it? Delivery has a big impact when online shoppers consider which marketplace to use. They weight the rating for delivery almost as highly as the marketplace s overall rating when making shopping decisions. Marketplace seller ratings 28% 22% Let s take a look at preferred delivery locations 71% of online shoppers say their home remains their preferred delivery location. 63% Other than their home, a third would prefer delivery to a neighbour. 41% 41% Highly influential Quite influential A little influential 23% 27% Not very influential 4% 5% 3% 4% Does not effect my decision at all Overall ratings Delivery ratings Home 71% of online shoppers would prefer to have items delivered to their home Neighbour 32% would pick a neighbour s house, if their own home was not an option 17% would pick the Post Office, if their own home was not an option PAGES 10 11

7 Home > Delivery Matters > Where do you want it? Home > Delivery Matters > To click and collect? To click and collect? Most trusted delivery locations other than home 75% The Post Office 73% Friends/Family house 67% Royal Mail Delivery Office 66% Retailer s store (click and collect) 45% Convenience store/ Cornershop 32% Work address In fact, other than home the Post Office is the most trusted delivery location. 29% Competitor 1 25% Competitor 2 56% Neighbour s house 21% Lockers Possibly due to trust and convenience, delivery to the Post Office encourages use of retailers. Almost half of online shoppers would be likely to use an online retailer if they offered Local Collect delivery directly to the customer s local Post Office branch as a delivery option. 44% of shoppers are likely to use online retailer if they delivered direct to a Post Office branch More than half of online shoppers have used click and collect. Most said they used the service because it was free. But, given the choice, most online shoppers would prefer home delivery. They re saying they use click and collect because it s free, not because it s convenient free home delivery is still the preferred option. 58% of online shoppers have used a click and collect service Free click and collect or free home delivery? 74% of online shoppers would prefer free home delivery service Only 13% of online shoppers would prefer free click and collect service Rural: 85% Suburban: 71% Urban: 71% Rural: 5% Suburban: 16% Urban: 14% PAGES 12 13

8 Home > Delivery Matters > Delivering the goods Home > Delivery Matters > Delivering the goods Delivering the goods We asked online shoppers what they expected from retailers and the response was loud and clear delivery matters. Threequarters said they re more likely to go back to a retailer if they re happy with the delivery of their goods, while 64% said it was important to have transparent delivery information before they placed their order. How strongly do you agree with the following statements? 75% 69% 64% agreed agreed agreed I am more likely to shop again from an online retailer if I am happy with the delivery of my goods It is important for me to be able to return items for free It s important to me to have clear delivery information before I place my order Once an order is placed, online shoppers want to know it s going to arrive as planned. Tracking provides reassurance and builds trust 77% of online shoppers say tracking would make them feel more confident about online shopping. The majority of shoppers want tracking primarily for reassurance and would track every item they order Tracking > Tracking deliveries It improves the confidence I have in making online purchases and returns 77% Delivery statements Returns statements 61% 57% agreed agreed 49% agreed I am more likely to use a retailer if they have a clear returns policy I like to be kept updated with the stage that the delivery is at I search out sites that offer free delivery It s not only high value items that people want to track, nearly two thirds say they would track every item they order I would track every item I order I would only track items that were of higher value I m not bothered about tracking 16% 42% 60% PAGES 14 15

9 Home > Delivery Matters > What about cart abandonment? What about cart abandonment? Cart Abandonment Journey > Good news fewer shoppers are abandoning their cart. 21% abandoned their cart, a significant year on year reduction of 12 p.p. It seems the tactics retailers are using to encourage shoppers to complete their purchases are finally bearing fruit. So what should you do to nip cart abandonment in the bud? Reasons for Cart Abandonment I wasn t happy with the delivery charge I was just browsing I found a better deal elsewhere They didn t have what I wanted in stock The website was experiencing technical problems I changed my mind when I saw how much I had spent I got interrupted when placing my order It was going to take too long for the items to get delivered to me 44% 37% 31% 29% 28% 27% 26% 21% Those who abandon because of delivery charges are more likely to go to a different etailer Q. Thinking about the last time you abandoned a shopping cart online, what did you do after abandoning your cart online? I purchased the item with a different online retailer I purchased the item at a later date on the same website 31% 28% 26% 43% Delivery charges are the most cited individual reason for cart abandonment. That s because over half of online shoppers always expect free delivery, while 4 out of 10 would go elsewhere if they were charged. Upfront, crystal-clear delivery information makes a real difference and may mean more completed purchases, first time round. They didn t have any payment options that suited me I wasn t happy with the returns delivery policy I didn t feel secure providing my credit card details I was not provided with a guaranteed delivery option I wasn t offered specific time slots delivery 12% 10% 10% 6% 5% I wasn t looking to purchase, so I didn t buy anything I went into a physical store to buy what I was originally looking for I went into a store to buy something different 6% 6% 13% 13% 21% 17% Total Abandoned because of delivery charges PAGES 16 17

10 Home > Delivery Matters > What about cart abandonment? Home > Delivery Matters > What about cart abandonment? 4 in 10 online shoppers would go to another retailer if charged for delivery Impact of delivery charges Free delivery If a retailer only offered free delivery on orders which are over a certain value, which of the following would you do? 40% Use a different retailer that offers free delivery 23% 22% 6% Order what I originally Spend the required Abandon the order intended to order and amount in order to completely pay for the delivery get free delivery if necessary Delivery charge Understanding your target market s behaviour can also help you take action to stop cart abandonment. For example, overall, women are still more likely than men to abandon their cart. Cart Abandonment (By Gender) Female 7% 26% Older shoppers are more likely to abandon because of the way they feel about the overall shopping experience, while younger shoppers are generally more likely to browse online and then purchase in-store. Male 11% 16% Very/quite frequently abandon my shopping cart Very/quite infrequently abandon my shopping cart Never abandon my shopping cart Over half of online shoppers always expect free delivery 55% 35% 9% Always expect free delivery Expect free delivery for orders over 20 Expect free delivery for orders over 50 67% 73% PAGES 18 19

11 Home > Delivery Matters > The importance of Returns Home > Delivery Matters > Trust Royal Mail The importance of Returns Trust Royal Mail #1 Returns are an important part of any retailer s service over a quarter of online shoppers returned items they bought online. Almost all returns (89%) were made through the retailer s chosen returns method, for example, collection, return to store or return through the Post Office. That said, almost threequarters of online shoppers would prefer to return goods through the Post Office the same number as last year. It seems the Post Office s popularity endures. 26% 89% have returned items bought online 89% of those returning items were specified the method of return to use (e.g. collection, through the Post Office, in store) And why do customers value the Post Office and Royal Mail so much? In a word, trust. Year on year, Royal Mail continues to be the most trusted national delivery company. Trust % 64% 64% 53% 52% 50% 48% 43% 43% 38% Royal Mail Parcelforce Competitors PAGES 20 21

12 Home > Delivery Matters > Trust Royal Mail And trust translates into sales: 69% of online shoppers are more likely to use an online retailer if they use Royal Mail for delivery That s because Royal Mail delivers a service online shoppers trust. Delivery companies which encourage repeat purchase from a online retailer Competitors 31% 69% Royal Mail #1 > Care and promptness remain what shoppers want and what Royal Mail does well Satisfaction from online delivery > Reason for satisfaction with Royal Mail The item arrived in a great condition The item arrived when expected 64% 62% The delivery was fast 46% The delivery was free 42% The item was delivered by a carrier that I trust 42% Shoppers are more likely to shop with etailers again if they offer delivery through providers they know and trust. 81% of recent Royal Mail delivery customers were extremely or very satisfied with their delivery. The delivery person was friendly I was kept informed of the status of the item The item was dropped off somewhere convenient for me Other 41% 15% 11% 1% PAGES 22 23

13 Home > Delivery Matters > About this research Home > Delivery Matters > We help you deliver About this research We help you deliver About > 1,500 online shoppers who had purchased items online in the last three months (other than groceries) completed a 15 minute online study between 9 April and 22 April Thanks for reading we hope you found it useful. If you want to find out more about how we can help with your deliveries get in touch with your Royal Mail account manager, or call us on *. If you d like to find out more about our research, please visit royalmail.com/deliverymatters, where you can also download a copy of our special report on returns. International Delivery Matters China, Australia, USA, France and Germany reports are also to be released soon. * Calls may be recorded, monitored and used for training and compliance purposes. Calls cost 5p per minute plus your telephone company s network access charge. PAGES 24 25

14 Home > Delivery Matters > Royal Mail services Royal Mail services Guaranteed When it s simply got to be there Royal Mail Sameday offers guaranteed delivery of urgent items on the same day. Royal Mail Special Delivery Guaranteed by 9am or by 1pm** offers timed delivery next day with inclusive tracking and signature on delivery. Tracked Keep tabs on deliveries Royal Mail Tracked 24 and Royal Mail Tracked 48 *** offer full online tracking. International Tracked & Signed offers delivery to Europe in 3-5 days and the rest of the world in 5-7 days. Standard For organised early bird shoppers Royal Mail 24 and Royal Mail 48 offer great everyday value for money. International Standard delivers to Europe in 3-5 days and the rest of the world in 5-7 days. Returns Provides peace of mind to you and your customers Royal Mail Special Delivery Guaranteed Returns and Royal Mail Tracked Returns offer you fast return delivery with full online tracking, with inclusive compensation. Our despatch solutions Despatch Manager Online (DMO) streamlines order management and despatch through an online tool. Our Shipping API uses API technology to interface with your order processing systems. They re both available free to Royal Mail contract customers. ** On time delivery or your money back. Conditions apply. We guarantee delivery by 9am to more than 98% of all UK addresses depending on the service selected. 9am delivery is subject to recipient availability. *** We aim to deliver Royal Mail Tracked 24 the next working day and Royal Mail Tracked 48 within two to three working days after we accept your parcels. Tracked 48 has a delivery aim of two days for over 94% of our postcodes. We aim to deliver your parcels the next working day after the date we accept them for Royal Mail 24 and within two to three working days for Royal Mail 48. PAGES 26 27

15 Royal Mail Royal Mail, the cruciform and all marks indicated with are registered trade marks of Royal Mail Group Ltd. Delivery Matters 2015 Royal Mail Group Ltd All rights reserved. For more information on our products or services, or if you would like to request a copy of this booklet in an alternative format, please call the Customer Service centre on Textphone users can dial direct on and we welcome Typetalk calls. Calls may be recorded, monitored and used for training and compliance purposes. Calls cost 5p per minute plus your telephone company s network access charge.

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