Online home deliveries to add £20 billion more to the UK market by 2025

No primary category set

UK retailers are bracing for an additional £19.6 billion of online home deliveries by 2025 as a result of the pandemic, new research from ecommerce delivery technology leader Metapack in partnership with research consultancy Retail Economics suggests. This comes as online is expected to account for 49.7% of total non-food sales by 2025 amid persistent home working.

Permanent shift online

Metapack’s new Ecommerce Delivery Benchmark report shows that 27.3% of UK consumers now expect to permanently shift more of their shopping online on the back of new behaviours formed since the pandemic.

A new wave of ‘digital shifters’ (the consumer cohort permanently switching to shopping more online) is expected to support an additional £22.4 billion in online sales compared to a scenario where the pandemic had no impact on shopping behaviours. This acceleration online is projected to lead to £19.6 billion of additional sales going through home deliveries alone by 2025, compared to a scenario where the pandemic had no impact.

However, the lasting impact of COVID-19 will not be felt equally across all retail categories. The research predicts that apparel, homewares and health & beauty will experience a greater permanent shift online, brought about by online discovery since the pandemic.

A consequence of the shift online means that 35.8% of UK consumers expect to visit physical stores less in the future, ahead of those expecting to cut back in the US (28.7%), Germany (20.8%) and France (17.2%).

Working from home disrupting retail

Disruption is being felt by consumers working from home – driving both an uplift in online spend and putting pressure on footfall to stores.

A quarter (24.8%) of UK consumers work from home more since the pandemic, of which half (50.6%) expect to shop more online permanently, compared to around a quarter (27.1%) of those whose place of work has not been impacted from the pandemic.

As more consumers work from home, it has boosted the success rate of first-time deliveries and opened a much larger number of possible delivery slots. By 2025, UK home workers expect their proportion of online orders delivered to their home to rise by 11.5%, compared to an average of 7.5% among those that haven’t faced change in their work.

New wave of online shoppers demand speed

The report delves into key consumer types and finds that the new wave of online shoppers is more demanding of speed of delivery when considering their most important factors. Across the markets analysed, 37.5% of ‘digital shifters’ value speed ahead of convenience, cost and carbon footprint of deliveries.

Driven by the pandemic, online consumer shopping expectations have changed significantly over the last few years, and a lot of these changes are here to stay. Our new report takes a closer look at these developments and their lasting impact on both consumers and retailers. It is expected that, as home working becomes the norm for more and more people, their appetite for fast, convenient, and easy deliveries that fit their lifestyle, will continue to increase. Retailers have reached a crossroads, they need to diversify their delivery options and invest in the right infrastructure and technology to meet the new needs of their consumers, or they will struggle to compete, especially as the shopping experience becomes synonymous with the delivery experience. The retail industry has evolved beyond bricks and mortar, it’s time to step into the age of ecommerce.

– Duncan Licence, VP of Global Product at Metapack

A permanent shift in consumer behaviour and vast investment across the ecommerce ecosystem has accelerated the shift to online. Structural changes in the labour market, with persistently higher levels of home working across households, has unlocked greater demand for home deliveries. Although the demand for speed will put pressure on supply chains, home workers have both a greater ability and greater willingness to pay for delivery and returns compared to average online shoppers, which is critical for profitability amid rising costs and elevated customer expectations.

– Richard Lim, Chief Executive of Retail Economics

RELATED POSTS..

Milk & More adds carton collection to milk delivery

Milk & More adds carton collection to milk delivery

£52 Billion of UK Online Sales Boosted by Omnichannel Experiences

£52 Billion of UK Online Sales Boosted by Omnichannel Experiences

Meet ChannelX at The Delivery Conference 2024

Meet ChannelX at The Delivery Conference 2024

How the Post Purchase Experience can delight shoppers

How the Post Purchase Experience can delight shoppers

DeliveryX LIVE - 20th & 21st June

DeliveryX LIVE – 20th & 21st June

ChannelX Guide...

Featured in this article from the ChannelX Guide – companies that can help you grow and manage your business.

Latest

Take a look through a selection of the latest articles on ChannelX

Register for Newsletter

Receive 5 newsletters per week

Gain access to all research

Be notified of upcoming events and webinars