The newly published RetailX UK Growth 1000 (G1K) 2023 report has found that delivery, collections and returns options make a very real difference in where shoppers decide to buy online.
25% of respondents to ConsumerX research carried out in August 2023 said that they subscribed to free or cheap delivery from at least one retailer. 50% of those with a subscription said they primarily did so to get value for money, with a further 30% looking for convenience. 53% say that convenient delivery is the primary reason that they continue to shop with the same retailer, followed by price (75%) and familiarity (55%).
RetailX research in the Operations Value Chain focuses on how the retailers, brands and marketplaces of the Growth 1000 add value to their businesses through the fulfilment choices they offer. The more choice that’s available, the more likely it is that an option will suit a shopper’s needs. This comes at a cost to the retailer, since offering free delivery on all orders will add less value than offering free delivery only when shoppers spend a certain minimum amount.
What delivery promises do Growth 1000 retailers make?
Shoppers prize free delivery, according to ConsumerX research, with 56% of shoppers buying during peak periods saying they’d choose a retailer that offered free delivery on all orders. However, this option is less cost effective for retailers. A minority of retailers (19%) now offer free delivery on all orders, although 48% offer a compromise, promising free delivery when shoppers spend above a minimum order value.
Speed of delivery is important for 90% of shoppers, ConsumerX finds, while 47% say next-day delivery is important for most or all of their deliveries. Retailers and brands have responded to this appetite for fast delivery, with an eight percentage point (pp) increase from 38% to 46% of Growth 1000 retailers offering next-day delivery.
The graphic shows how the proportion of Growth 1000 retailers offering next-day delivery has changed over time, with data from a smaller group of 685 retailers that have consistently appeared in the index over four years. It also shows variations in the proportion offering same-day delivery. Adoption of this super-fast service has varied between 2.3% and 3.4% over the last four years.
63% of Growth 1000 retailers offer collection. There are signs that collection is becoming less available, with an 8pp decrease from 65% to 57% among 394 multichannel retailers measured on this metric both this year and last. That, says RetailX research director Martin Shaw, is a continuation of a trend seen in larger UK Top500 companies, as well as across Europe.
What do Growth 1000 retailers promise on returns?
UK shoppers have, by law, 14 days after receiving an online order to notify the relevant retailer that they want to return the product – then another 14 days to send it back. Retailers must refund the original cost of the item within 14 days of receiving the return. Returns are a real point of differentiation for traders.
ConsumerX research finds that 43% prefer to shop with retailers that offer flexible return policies during busy or peak shopping periods. Shoppers buying from a Growth 1000 retailer are most likely to be able to return an item through the post, with 53% of the Growth 1000 advertising this option on their website. 57% say they will use a courier to pick up an order from the house, while 38% of multichannel retailers say they enable customers to return an item to one of their stores. This represents an increase of more than 50% among 350 retailers measured on this metric both years, with the proportion advertising return to store rising from 28% to 44%.
Very few (0.2%) advertise returns via a drop-off point operated by a third party, such as Collect+. 41% will refund the cost of the original shipping when shoppers return an order they made online. There was a 6pp increase from 25% to 31% on this metric, among 269 retailers measured on this metric both this year and the last.
How Charlotte Tilbury approaches fulfilment
Makeup specialist Charlotte Tilbury, a leader in the Operations Value Chain, uses free shipping effectively in order to encourage customers to first buy and then return to buy again. Customers get free shipping when they spend at least £49 on an order, or earn it through the Charlotte Tilbury loyalty club. Loyalty coins can be earned through actions such as downloading its mobile app or sharing information – by completing makeup and complexion profiles – that enables the brand to personalise its interactions with each customer. Those who sign up to its mailing list will also be notified of occasional free shipping promotions. The brand offers a 30-day return policy, with methods including third-party drop-off points.
This feature was authored by Chloe Rigby and originally appeared in the RetailX UK Growth 1000 (G1K) 2023 report. Download the full report which features the latest RetailX/ConsumerX research into UK shopper expectations – in areas from fulfilment to subscriptions, from loyalty to sustainability and more.
It illustrates how customers are constantly looking for ways to shop smarter – and even as they look for competitive prices, they also expect to buy in ways that are convenient for them.