UK retailers responding slowly to needs of online shoppers, says UPS

New research contained in the UPS Pulse of the Omni-channel Retailer survey has suggested that UK and European retailers could do more to adapt their operations to the needs of digital consumers. The survey drew on the opinions expressed by logistics experts at more than 700 retail companies in Europe, including 100 retailers in the UK.

UPS has advised that as retailers adjust their supply chains to consumers who frequently shop online – also known as “flex shoppers” – they should focus on three key areas: physical stores, out-of-stock situations and cross-border returns.

“If UK-based retailers want to stay competitive, they should consider store footfalls are shrinking as online is growing, which means they have to go beyond the traditional purpose of a retail store, and use it as part of the inventory and distribution network,” said UPS.

“The UK leads on using stores for value added services (65% of retailers use their store network to provide high value added services such as click & collect), but when it comes to using the store network to turn in-store out-of-stock situations into sales, they are somewhat behind their European counterparts. Only 19% of UK retailers enable consumers to reserve the product either online or in the physical store in case of out-of-stock situations.”

However, on the upside, UPS added that: “UK retailers are leading the way for non-working day deliveries.”

Turning its attention to the situation in Europe, UPS said that”almost one-third (27%) of European retail companies already use stores as fulfilment centres for online orders”, but there are “large variances”  between countries. The UPS data also shows 31% of retailers in Europe are planning to use the store network or alternative pick-up locations in the next 12-24 months to offer more collection convenience to customers who order online.

Solving the “out-of-stock” problem is a key concern. According to previous UPS consumer research, when faced with an out-of-stock item, 41% of European consumers said they will go to a competitor’s website or app and 20% said they will go to a competitor’s store. Only 17% said they are willing to buy and wait.

UPS commented: “The omni-channel survey research shows online businesses are quite responsive to out-of-stock challenges; 68% of e-tailers offer tracking and delivery to a preferred address when the product becomes available and 59% track orders and proactively notify the consumer on availability, while the physical stores lag behind. Almost half of brick and mortar retail stores (45%) simply suggest customers wait, without providing an alternative.”

The UPS survey found that “customer confidence and brand integrity depend on efficient returns” – and these an area where more improvements can be made.

According to UPS: “61% of UK retailers are charging for the return process if the items are not damaged or defective, well above the European average of 43%. Retailers said their key challenges in this area are managing defective goods (65%) and performing quality checks (61%).

“The survey also suggests retailers need assistance from third-party logistics partners. Over 60% of logistics leaders said they needed multiple third party logistics partners to manage returns, and over 70% said they contribute to cost-effectiveness.”