Alternative delivery means big test for UK e-commerce during festive peak

British shoppers are being more “adventurous” than ever in how they receive their e-commerce deliveries ahead of Christmas – providing a big test for the retail supply chain. According to parcel delivery management specialist GFS, volumes going via alternative forms of delivery are higher than ever this year.

Retailers have been pushing to attract consumers by offering a wider range of options for how they can receive their purchases, particularly when they cannot be at home for deliveries.

It means a much more complex approach to the delivery chain, which will receive a big test during this year’s peak season.

GFS said that around 12% of online orders are now delivered through click and collect channels in the UK.

GFS commercial director Daniel Ennor said this year’s peak season could be a “tipping point” in the mainstream acceptance of click and collect delivery methods like parcel shops and parcel lockers.

“Consumers have grasped the benefits of moving from high street to home delivery to ‘click and collect’. There’s no doubt from the volumes of parcels that we’re managing on behalf of clients that shoppers are being more adventurous than ever before in how they receive their purchases,” he said.

“Urgent official efforts to ensure consumers have a greater breadth of delivery options available are only going to fuel adoption still further. With the possibility of regulation around the corner, this peak season could be something of a tipping point in terms of shoppers being made aware of even more choice.”

E-retail industry body IMRG said at the end of November that retailers were dispatching orders at a rate 22% above 2013, almost double the growth seen at the same time last year.

Andrew Starkey, the IMRG head of e-Logistics, said: “All carriers will have extensive contingency plans in operation and many are responding by moving to seven day working as standard. However as volumes rise, on time delivery is bound to come under pressure and the increase in alternative delivery solutions such as In Store and Third Party Click and Collect will provide additional capacity and contingency.”

“Next stage of convenience”

Parcel locker firm InPost UK said Britain’s adoption of the US retail phenomenon “Black Friday” and the associated “Cyber Monday” has seen even more shoppers taking to websites this peak season.

But the company said the widespread option of leaving a parcel with a neighbour is not necessarily popular with all consumers, with its survey suggesting that 47% of Brits don’t know their neighbours and 23% don’t trust them to receive parcels on their behalf.

InPost, which has a network of 1,000 parcel locker terminals in the UK, said British consumers have missed an average of three parcels in the last 12 months, with 10% missing Christmas deliveries.

Jonathan Smith, the InPost UK chairman, said: “Shopper needs are essentially simple; we all want to be able to get our gifts safely and with a minimum of disruption to our daily routine. Click and collect is already proving a success story and automated lockers are the next stage of the convenience journey.”

Predictions suggest that this year’s festive season will bring £90bn in UK retail sales, £13n online.

Despite the growth in alternative forms of delivery in the UK, Europe’s biggest e-commerce market, Ennor said consumers are still generally favouring traditional forms of delivery above all.

Once again, retailers and their carriers have to ensure capacity meets demand at the busiest time of the year, with contingency plans crucial in the event that one or more carriers have problems keeping up with peak volumes.

Sundays help with the strain

Parcel delivery software firm MetaPack said as retailers respond to consumer demand for greater choice in delivery convenience, their supply chains are having to accommodate a far greater complexity.

But Patrick Wall, the MetaPack chief executive, said the introduction of Sunday deliveries has helped carriers to cope with increased volumes.

He said as a result, Black Friday “went well” this year.

Wall said: “Despite some reports of eCommerce systems straining to keep up with demand, this first test of Christmas online retail went well because UK eCommerce has significantly evolved to now operate a seven days a week delivery standard. This meant Black Friday volume could be delivered over the weekend with high rates of Saturday and Sunday deliveries. In other years some deliveries would have been held back until the Monday.”

MetaPack said Cyber Monday volumes were 39% up compared to the previous Monday. There was also an 86% increase in cross-border shipments compared to the same period in 2013, as consumers abroad took advantage of UK retail promotions.

“What’s significant for the industry is that we’re still forecasting the same volumes on the next two Mondays with Monday 15th being the highest peak for parcels being dispatched,” said the MetaPack CEO. “It’s worth reminding ourselves that the Christmas Peak has only just started and there’s a lot more eCommerce to happen.”