The convenience dividend
Customer expectations of convenience and choice are driving the growth of new collection and delivery services
Firmly on the agenda in retailers’ boardrooms across Europe is offering customers convenience and choice when it comes to getting their online purchases. Data from our latest research shows that in many of Europe’s most developed ecommerce markets, delivery and collection is becoming an integral part of the customer offer. While providing convenience and offering choice could once have been dismissed as a fluffy nice-to-have, these days, a poor doorstep experience can ruin things for the customer. This is the point at which the retailer’s promise is either kept or broken, when relationships are established or ruined, and when reputations are either enhanced or tarnished.
Click and collect
It’s not particularly new, and it’s more widely offered by Top500 retailers in mature ecommerce markets, but click and collect is hugely important and still growing. The proportion of Top500 retailers surveyed in 2017 and 2018 and which were offering click and collect grew substantially in many key markets. In France, where it is available from 63% of retailers in the survey, its availability grew by 18 percentage points (pp) over the year. Two other countries with similarly high click and collect growth were Finland (+16pp) and Portugal (+15pp). The EEA-weighted average for click and collect availability is currently 61%, with the UK (65%), France (63%) and the Netherlands (61%) the three countries where it is most prevalent.
While the above looks at the rising popularity of click and collect generally, we are also now examining the progress of same-day collection services among the Top500. Since 2018 is the first IREU Top500 to include data on same-day collection, it won’t be until next year that we can offer like-for-like comparisons. As things currently stand, the EEA weighted average for same-day collection among Top500 retailers is 13%. In the Republic of Ireland, 18% of retailers already offering click and collect also make same-day collection available, making Ireland the leader in this category. Elsewhere in Europe, it is a small but significant presence: France (15%), Czech Republic (13%) and Slovakia (13%).
A greater proportion of Top500 retailers offer next-day delivery in the UK than any other country covered by the report. Currently that stands at 44% and is well ahead of its availability in other European markets: Benelux (LU: 19%, NL: 16%, BE: 13%), France (15%) and Germany (13%). It is on the rise, according to our year-on-year comparison. Looking at Top500 retailers in 2017 and again in 2018, we found next-day delivery up by 11pp in Luxembourg (from 6% to 17%), and growing more modestly in Hungary – growth of 2pp, from 2% to 4%. In Lithuania, it registered a zero in 2017, but now stands at 12%. In neighbouring Estonia it’s a similar story – up from 0% to 10%.
The doorstep is where promises are either kept or broken
While next-day delivery is fast becoming the default in many cases, same-day delivery is a much rarer beast. That’s mostly because of the tremendous logistical and strategic challenges involved. For businesses that have grown up offering delivery in between three and five days, the shift to next-day called for greater efficiency.
Moving to same-day, however, calls for a leap of faith – starting each day not knowing what’s to be delivered is not the same as simply doing things faster. It is only available from 6% of Top500 retailers in the UK and in Greece too – the two countries leading this category. Growth in same-day between 2017 and 2018 is encouraging: 2% in 2017 for Greece, and 3% in the UK. It’s a similar picture for Spain, where it grew from 1% to 5% between 2017 and 2018.
There’s more to convenience than speed alone. After all, what use is it being offered next-day delivery if you know you won’t be there to receive it? The real convenience winner in the delivery stakes is nominated-day delivery. Yes, it’s a premium service, but shoppers who see the value in it will pay for it. Currently, 17% of Top500 retailers in the UK allow shoppers to choose what day their order will be delivered. That’s up from 12% in 2017, making the UK the leader here. The weighted average for the EEA stands at 8% for this year, up from 4% last year, although it remains a minority offer in most countries: Hungary (5%, up from 4%), Italy, Portugal and Slovakia (all at 4%, up from 2%), Sweden (3%, up from zero in 2017). There was flat or even negative growth in some countries: Denmark (2% for both 2017 and 2018), Lithuania (5% for both 2017 and 2018), Latvia (3% in 2018, down from 6%).
Being able to pick a time your delivery arrives is nothing new in online grocery shopping but is still quite niche across the broader, non-food retail sector. Perhaps unsurprisingly, you’re more likely to come across it in the UK, with 7% of Top500 retailers there offering it. That’s an increase on 2017’s 5%. The EEA average stands at just 5% and the next-closest markets see only 4% of surveyed retailers allowing shoppers to pick the time they want: Luxembourg, Poland, and Portugal (all 4%). Even in Germany, the largest economy in Europe, only 3% of Top500 offer nominated-time services. In all of those cases, however, that’s an improvement on the 0% of 2017.