As the European cross-channel retail market matures, nuances in retailers’ approaches to deliveries and returns are emerging across different territories, reports Jonathan Wright
The UK is the most mature ecommerce and multichannel retail market in Europe. It’s hardly surprising then, that of the retailers that make up the Top100 within the IREU Operations & Logistics Dimension, 49 of these companies are based in Britain. Within a competitive environment, each, in their different ways has had to implement delivery and returns strategies that give them an edge over competitors, typically around services such as click and collect, and premium delivery.
However, it would be a mistake to assume that the UK is as far ahead in this Dimension as it may have been a few years ago. To take just one of our research findings, it’s retailers in Germany that offer the fastest standard deliveries at around four days (3.9). In comparison, the equivalent figure for the
UK is 4.8 days.
While it’s outside the direct scope of our research, one way to understand this kind of statistic may be to consider how retailers develop and roll out fulfilment operations. Typically, the biggest gains come in the early part of implementation when, for example, bricks-and-mortar retailers that want to become cross-channel retailers have to set up new systems. After this, gains tend to become incremental. You would therefore expect bigger European retailers to be matching and even exceeding the performance of retailers in the UK as the overall European market matures.
That said, our research reveals fascinating variations in performance across different countries within the EEA, variations that often reflect local factors and which we outline here:
UK consumers have the greatest choice when it comes to the number of delivery options, with an average of 2.6 choices per retailer. The performance of retailers operating in France (2.2), the Czech Republic (1.9) and Spain (1.9) is also strong, whereas German consumers are offered, on average, 1.8 delivery options. The UK’s lead here probably reflects early adoption of ecommerce, although the sophistication of UK supermarkets and other retailers offering timed deliveries within urban areas plays a big part too.
As already noted, German consumers get the best service here. However, those in the Netherlands can expect to receive goods in 4.1 days – perhaps because they come from nearby German warehouses? – while there’s a group of countries at around 4.5 days, including Switzerland (4.4), Portugal (4.6) and Belgium (4.6). It may be that German consumers, who have a reputation for being price-conscious, are reluctant to pay for premium services, which makes offering prompt standard delivery a priority for retailers operating in Germany.
At the other end of the scale, consumers in Norway (6.5), Sweden (6.3) and Finland (5.8) typically have to wait longest to receive their goods.
Within Germany, there’s long been a culture of returning goods. Accordingly, retailers compete to offer easy returns to consumers, with 50% of retailers operating in this market offering pre-paid returns. More widely, pre-paid returns seem to be most commonplace in Northern Europe, with Austria and the Netherlands also territories where this service is commonplace. In contrast, in the UK, only around one in five retailers offers pre-paid returns.
Here, the figures are interesting because they show UK-based retailers performing far more strongly than other European territories. In contrast, consumers in France, Bulgaria, Denmark, Spain, Finland, Greece, Italy, Norway, Romania, Sweden and Slovakia can’t request Sunday deliveries from IREU Top500 retailers. Similarly, the UK leads the way in next-day deliveries and nominated-day deliveries. We suspect this is evidence of the way consumers in the UK expect flexibility when it some to deliveries.
Our figures suggest there is still considerable scope for improvements within the Operations & Logistics Dimension across Europe. However, it may be that continental European retailers will soon start to pull ahead of UK counterparts here. That’s because the UK government is seemingly committed to a hard Brexit that will make it more difficult for UK retailers to operate within the EEA.
Alternatively, the initial difficulties of Brexit may give UK retailers an edge in the longer term as they set up logistics operations within the EEA and apply lessons learnt in the competitive UK market. Our research over the next few years will offer early insights as to which of these scenarios plays out.