Delivery Matters. Understanding the changing landscape of online shopping in 2014
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1 Delivery Matters Understanding the changing landscape of online shopping in 2014
2 Delivery really The importance of online About this research We help you deliver Delivery Matters
3 Delivery really for online shoppers Welcome to the 2014 Delivery Matters research report. We ve been commissioning research like this for the past six years, helping retailers understand what customers need and want when. We also use the research to improve our products and services, helping businesses like yours deliver more for your shoppers. In the last year, we ve added delivery notification, improved our customer shipping solutions and offered more flexible delivery options like Local Collect. This year, we ve made some changes, adding an online discussion forum, focus groups and qualitative interviews to the quantitative online research for this report. Our findings confirm that online shopping is fast-moving and continually-changing. are incredibly popular, with 83% of online shoppers using them. Shopping methods are changing, with over a third of online shoppers now using a mobile device. Tracking is helping retailers build confidence amongst shoppers. And Royal Mail continues to be the most trusted national delivery company in the UK. However it s not all smooth sailing. remains a hot topic and customers demand transparency and flexibility right through their shopping experience. Our qualitative research showed that, while rare, problems with deliveries and returns can have a huge impact. Conversely, successful deliveries from a trusted partner can have a halo effect on relationships, helping retailers build repeat business. We re delighted to be able to share our research with you and hope it helps you become even more successful in 2014 and beyond. Nick Landon Managing Director of Royal Mail Parcels Our research was independently conducted by Hall & Partners during April Delivery Matters
4 Average amount spent online shopping continues to grow So to start with the good news for online retailers 67% of online shoppers say they re more than they used to. A large proportion of online shoppers overall budget is spent online, accounting for 80% of non-grocery spend. 341 Amount spent in total Shoppers are buying more often, this is reflected in the number of online transactions per quarter, which has increased again from to 7.1 in 2013 to 7.4 in 2014, with an average order value of around 37. 2% Much less 3% A little less 27% I have not changed how much I shop online 33% I shop online a little more than I used to 34% I shop online much more than I used to 274 Amount spent online Transactions per quarter Delivery Matters
5 The gender gap Men and women approach online spending in very different ways: in the last three months, male online shoppers said they spent an average of 343 while women averaged significantly less, spending Total average online spend Rising downloads This is the first year downloads are really making their presence felt sales are up 6%. While physical books are still the most popular item, sales are down 5%. Similarly, CD sales are down 3%. Sales of women s clothes are up 3% and are now the second most popular item. Will they overtake books and hit the top spot in 2015? Average online spend for women 256 Average online spend for men % 6% from 2013 Downloads 24% 4% from 2013 Personal electricals 25% 5% from % 3% from % 3% from 2013 Food / drink Footwear CDs / video or audio / records 38% 3% from 2013 Female clothes 40% 5% from 2013 Books Delivery Matters
6 Convenience and flexibility factors remain the main reasons people shop online our online shoppers love being able to shop from the comfort of their homes. They also love being able to compare prices easily, as well as being able to access a wide range of available products. Shoppers who took part in our online forum said: I can look at more quickly and easily than if I were actually in a store. I can find my size / item instead of making a special trip to then find something out of stock. Reasons to shop online 95% 92% 83% 43% 41% Convenience and flexibility Products Price Speed reviews Convenience / Ability to shop at any time / Shop from the comfort of my home / Ability to buy from anywhere in the world Range of products / Availability of products / Offers a diverse range of products Price / Ability to compare price Access reviews and recommendations Delivery Matters
7 And let s not forget, online shopping can also be a lifeline: I have difficulty walking long distances helps me run a normal life it helps me not have to depend on my family to shop and fetch things. Delivery really Moving with the times It can be cheaper, easier and I don t have to get ready to go out. Laptop and desktop computers remain the most common device for online shopping, but one-third of online shoppers now use a mobile device. It seems they don t just want to shop from the comfort of their sofa, but also from the bus, the train, the bath, their mate s house Tablet Desktop computer Smartphone Laptop computer 19% 22% 60% 46% 33% Percentage of online shoppers that use a portable device Delivery Matters
8 % of online shoppers buy from like Ebay, Amazon marketplace and Rakuten, as well as smaller ones like Etsy and Not On The High Street. They re used by shoppers from all demographics, although women and the 35 54s are slightly more likely to shop this way. 80% 85% Females 82% 86% Ages % Males Ages Ages % Percentage of people who buy from online Delivery Matters
9 It s all about the delivery ratings Seller ratings are king in online 74% of online shoppers say sellers ratings have a lot of influence on their choices. And what sits underneath those ratings? Well, delivery is a hugely important factor in ratings-based decision-making, with two-thirds of online shoppers saying it s important to them. 24% A little influential 66% Percentage of online shoppers that say delivery ratings are highly or quite influential on their purchase decision 4% Does not effect my decision 6% Not very influential 44% Quite influential 22% Highly influential Our qualitative findings this up sellers said ratings are a great way for faceless sellers to build trust. Speedy delivery is one of the most common reasons for positive feed, so using a trusted delivery partner creates a virtuous cycle that halo effect which builds trust right from the start of the process and ensures that all-important good feed at the end. sellers who took part in one to one interviews said: People often only leave feed if things have gone wrong, so it that they deliver when they say they will. You get better feed and reviews if delivery is done quickly. I usually just go down to the Post Office that day and get it done. Delivery Matters
10 Parcel tracking helps to build trust They know exactly where your parcel is, all the time. When you can track it you trust what they re saying. In our focus groups, online shoppers said: With no friendly face to chat to, online shoppers want reassurance that their goods will arrive quickly and safely. Parcel tracking is a great way to build this trust factor in fact, 73% of online shoppers said tracking deliveries would improve their confidence in making online purchases. It also makes things easier for your customers, because they can plan around their deliveries. Our qualitative research said tracking communicates loud and clear that the seller cares about their customers. Again, it helps build trust and it makes them feel good! Royal Mail Tracked 24 and Royal Mail Tracked 48 help you to keep tabs on deliveries with a choice of 24 or 48 services. 73% Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Percentage of online shoppers who say being able to track deliveries would improve their confidence in making online purchases 23% 33% 30% 10% 4% How strongly do you agree with being able to track deliveries on every item ordered? Delivery Matters
11 Reasons for cart Availability / price Nett 69% Delivery Unhappy with delivery charge Security / technical reasons Nett 45% 43% 57% Just browsing 38% in the last 3 months It s an important issue which shows no signs of going away. A third of online shoppers frequently abandon their cart, and women are more likely to abandon than men. 33% Click, click, exit So what s driving shoppers to abandon their carts? Price and availability remain the top reasons for not checking out, with delivery reasons coming second. Of course, you don t need us to tell you that having the right items available in stock at the right price is vital to make sure your customers complete their purchases. But it also seems that clear, upfront delivery options are a big part of closing the sale after all, no-one wants to have to factor in expensive or slow delivery after they ve decided how much they want to spend overall. Additional charges Found better deal elsewhere Reconsidered spending Items not in stock Interrupted when placing order Website had technical problems Website too complicated to use Delivery times too long Unhappy with delivery options Unhappy with returns delivery policy Felt uneasy providing credit card details Unsuitable payment options 34% 30% 28% 28% 28% 26% 21% 20% 17% 13% 11% 10% Very / quite frequently abandon my shopping cart Delivery Matters
12 The heart wants what it wants So what do online shoppers do after they abandon their cart? Around a third go on to purchase the item with a different online retailer, a third go to the same website and purchase at a later date, while around 15% visit a physical store, either to buy the same item or to buy something else. Proceed to checkout Customers love free delivery. And they also love being in control. So according to our forum, fast, free delivery takes the biscuit. Take control of the cart: there s lots you can do to stop cart in its tracks When it comes to shoppers who abandon specifically for delivery factors, the story changes. 31% of them go on to purchase the same item from a different retailer quite literally money walking out of your store into a competitor s pocket. For delivery reasons you can: For price reasons you can: 31% 28% 21% 9% 6% Send a reminder with free shipping offer. Offer a wide range of delivery options from a premium guaranteed service to low cost options. Offer delivery options with a provider that consumers trust. Provide options to modify cart items. Send abandoned cart reminder s triggered after a shopper has left items in a shopping cart. Send reminder with a coupon / discount code or incentive. I purchased the item with a different online retailer I purchased the item at a later date on the same website I wasn t looking to purchase, so I didn t do anything I went into a physical store to buy what I was originally looking for I went into a store to buy something different Delivery Matters
13 Bring it Women s clothes Of course, you re aiming for a happy customer at the end of every order. But sometimes the cap (or the dress) simply doesn t fit. Men s clothes 11% 42% shoppers care about their returns experience. 72% of online shoppers said they d be unlikely to shop again with a retailer if they had a difficult return experience. And 78% said they d be unlikely to shop again if they had to pay for returns. So offer free and easy returns with Royal Mail Tracked Returns. Footwear 10% What do online shoppers send? I would be extremely / very / unlikely to shop with a retailer if 72% I had a difficult returns experience 78% a retailer charged for the return postage Children s clothes 5% Unsurprisingly, clothes and shoes are the most commonly returned items so particularly if you re in the fashion business, you cannot afford to get the returns experience wrong. Delivery Matters
14 The Post Office remains the preferred method for returns Convenient location Shoppers want to trust their returns services, and that s where the Post Office comes into its own. 71% of online shoppers say the Post Office is their preferred method for returns, seeing its UK-wide network as convenient, easy and reliable. Reliable Trustworthy Easy / simple 71% Returning via the Post Office 48% Wait at home for a collection in evening 41% Taking to your nearest convenience store 38% Wait at home for a collection during the day 35% Returning via a postbox 22% Returning via a Royal Mail enquiry office Proof of purchase pm am Preferred return location Delivery Matters
15 Royal Mail remains the most trusted national delivery company. 83% We ve talked a lot about trust it s becoming more and more important as online shoppers become more sophisticated. They need to believe they can trust every step of the shopping process. One way to do this is to make sure your delivery company really is delivering for your brand because as always, the devil is in the detail. When it comes to trust, 83% of online shoppers say they trust Royal Mail. In fact, Royal Mail continues to be the most trusted delivery company in the UK. 54% 54% 56% 66% 41% 45% 48% 53% 53% Most trusted delivery companies Competitors Parcelforce Royal Mail Delivery Matters
16 Why do people shop online? First choice of alternative delivery locations Trusted delivery partner Delivering with Royal Mail is more likely to make shoppers return to an online retailer than delivering through any other delivery company using Royal Mail helps retailers grow those trusted relationships. It s worth noting too that Royal Mail handles by far the most amount of deliveries. Neighbour s house Friend s / family s house Post Office Royal Mail delivery office Work address Convenience store 43% 15% 12% 11% 11% 6% 75% Which of the following companies would make you use an online retailer again? 55% Flexible delivery options 37% 37% 35% 32% 26% 25% When it comes to alternative delivery addresses, most shoppers find a neighbours house the most convenient alternative place for delivery. Delivery to a family member s house is the second favourite alternative with their local Post Office coming in as the third favourite. Royal Mail Parcelforce Competitors Delivery Matters
17 the word Let s give the last word to our online discussion group. How to get customers to shop more Royal Mail have always been there. They go to every home and reach everyone. Tried and trusted organisation. I know Royal Mail. I know it ll get there If it was a company I d had a poor experience with I would go to another retailer. I would have no confidence. If a retailer used a company I did not trust, I just wouldn t use the retailer. 66% Free delivery on all purchases Lowest prices 60% Product I want Clear delivery charges Good customers services Free delivery over a certain value Visible return policy Good range of delivery options Easy to collect items Collect items instore Knowing delivery company Sameday delivery 14% 26% 24% 36% 32% 43% 41% 45% 49% 55% Keep coming And building that trusted relationship is worth it after all, you ve done all the hard work in enticing your customer to your site and winning that first order. Now the trick is to reap the reward and build the trust that will have them ordering again and again. So how do you do this? Well, online shoppers see value as a crucial part of your relationship. That means free delivery where appropriate, and above all, transparency. After all, no-one likes being hit with extra charges at the check-out. Clear, upfront information about delivery charges and returns will keep your customers coming for more. Delivery Matters
18 About this research This research was independently conducted by Hall & Partners between 1 11 April 2014 asking a nationally representative sample of 1,539 UK consumers who had shopped online over the past three month about their attitudes towards online shopping. We also held an online discussion forum with 50 online shoppers between 2 6 May 2014, as well as four focus groups with online shoppers plus qualitative interviews with online sellers. We used what they told us to put this Delivery Matters research report together. Direct quotes from shoppers have been edited. We help you deliver 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. If you d like to find out more about our research please visit To find out how Royal Mail can help you deliver for your customers, contact your Royal Mail account manager or call us on *. We love parcels If you would like to know more about our products visit 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 birds 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 Royal Mail Tracked Returns Our despatch solutions Despatch Manager (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. * Calls may be recorded, monitored and used for training and compliance purposes. ** On time delivery or your money. 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 35
19 Royal Mail, the cruciform and all marks indicated with are registered trade marks of Royal Mail Group Ltd. Delivery Matters 2014 Royal Mail Group Ltd All rights reserved. For more information on our products or services, or if you could like to request a copy of this booklet in an alternative format, please call the Customer Service centre on Calls may be recorded, monitored and used for training and compliance purposes. Textphone users can dial direct on and we welcome Typetalk calls.
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