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Online deliveries lift as economy moves ‘out of doldrums’

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Online retail seems to be growing as the economy moves “out of the doldrums,” with “unprecedented” growth in deliveries over the first four months of the year, the IMRG has said.

The IMRG MetaPack Delivery Index has detected fast growth in parcel deliveries from UK retailers in the first four months of the year, prompting the IMRG and MetaPack to lift their annual forecast for the whole of 2014 as a result.

“As always we will continue to monitor this growth and adjust our assessment accordingly but given the evidence so far it would appear that the UK e-retail sector is emerging strongly from the recent economic doldrums and we need to revise our forecast to somewhere between 16% to 19%,” said Andrew Starkey, head of e-Logistics at IMRG.

That means, he said that retailers are expected to send out 900m orders and 940m parcels to domestic and international customers over the course of 2014.

IMRG had previously predicted that 855 million orders would be fulfilled during the year.

The delivery index also found that as numbers of deliveries rose, punctuality was slipping. For the first time in a year, the study found the percentage of ‘on time’ deliveries (92.62%) falling below the level achieved at the same time last year. The IMRG said that might be down to unexpectedly high volumes combined with the first bank holiday of the year.

“Given that order volumes are high and that April was a ‘short’ month due to the Easter break, it is perhaps not surprising that quality of service fell back a little this month,” said Starkey.

“With the steady increase in carrier capacity and with Click and Collect acting as an additional outlet, we hope and expect that the positive trend for this measure will soon be restored.”

Angela O’Connell, marketing and strategy director at MetaPack, said: “This sudden surge in online retail has caught the industry by surprise. As retailers have worked extremely hard to deliver orders, there does seem to have been an impact on customer experience from a dip in on-time orders.

“This underlines the need for more innovation and flexibility in how retailers work with carriers and plan and manage their deliveries to customers. It’ll be exciting to see how the industry strikes the right balance between high retail volumes and a high quality of experience over the coming quarters as the economy improves.”

Commenting on the findings, Paul Doble, ecommerce expert at parcels and logistics network operator DX, said: “The forecast from the IMRG-Metapack report of 940 million parcels being dispatched this year is fantastic news for the industry and demonstrates the strength of the ecommerce arena, but it nevertheless heaps a lot of pressure on etailers and their logistics partners to adapt to the changing market.

“We are witnessing increasing challenges in the marketplace due to obstacles posed by road networks in rural locations and congestion in cities, availability of parking in urban locations and ongoing adverse weather conditions– whilst the industry itself is growing and maturing. The net result of this is that any issues, be they traffic, weather or distribution related, can have a far greater knock-on effect for etail deliveries than they may have done just one or two years ago. For retailers operating in the online space this is a serious concern, but one that must be addressed in order to continue carving out a share of the growth potential that the market offers.”

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