GFS (Credit image/Pixabay/romeosessions)A new report by Global Freight Solutions (GFS), a delivery management company and independent retail consultancy Retail Economics suggests online retailers need to sharpen up their delivery options. The report estimates that retailers are ‘losing’ £31.5bn in sales annually at the checkout due to delivery-related issues.
The report, Battling Basket Abandonment, has identified a number of consumer delivery issues impacting eCommerce businesses. This results in a huge financial ‘black hole’ for retailers.

The report, has been produced by GFS, a delivery management company, and independent retail consultancy Retail Economics. It found 24.8% of UK shoppers abandoned their purchases at the checkout. The research examines why consumers are failing to complete their purchases – and what retailers need to do to avoid this.

A breakdown of the £31.5bn reveals that £7.2bn is attributed to the lack of delivery options. £4.9bn is down to cost expectations, £4.5bn is down to delivery speed and £4.2bn because of the returns policy.

More than 100 senior eCommerce and supply chain professionals within the UK were surveyed for the report. More than 80% were confident in the delivery services they offered met consumer needs.

The discrepancy between customer expectations and reality

However, the report has revealed huge discrepancies between consumer expectations and retailer service. 83% of retailers believe they offer a wide range of delivery options, yet just 48% of consumers agree with this.

The survey also indicated that shoppers expect at least five delivery options when getting to the checkout. However, the research shows only a third of retailers offer this with the average being three options.

Retailers are also confident they are performing well when it comes to consumer confidence in delivery and returns policy (85%). Providing reasonable and transparent delivery costs was cited by 84% of respondents. In addition to offering an easy and frictionless checkout experience (88%) customers are also satisfied with the speed of delivery (88%). However, this confidence does not stretch to consumers, as their feedback ranged from just 54% to 64%.

However, the report debunks ‘consumer myths’ and offers some positive insight for the eCommerce and delivery providers. Online shoppers are increasingly prepared to pay for premium delivery and return services.

Paying extras for extras

Three in four consumers are willing to pay extra for same-day, next-day or nominated delivery. While a staggering 95% of millennials are open to paying for a premium delivery service.

This is replicated with returns. There is a discrepancy of attitudes amongst the age groups as 76% of under-45s will pay for hassle-free return options. By contrast, only 34% of over-45s will pay.

Serial online shoppers, those who purchase goods at least once a fortnight, are also willing to pay for ‘hassle-free’ returns more than those who buy once a month or less.
Retailers also acknowledge more could be done to enhance the customer experience including:

  • Expanding delivery options (45%)
  • Offering free shipping or reducing costs (44%)
  • Reducing delivery times (42%)

However, they also pointed to the two main barriers in being able to improve delivery options are high operational costs (61%) and working with multiple carriers (41%).

(Credit image/LinkedIn/Bobbie Ttooulis)
Bobbie Ttooulis, Global Freight Solutions Executive Board Member,

The report recommends five strategies eCommerce businesses could adopt to improve the customer experience and reduce sales lost at checkout. Global Freight Solutions Executive Board Member, Bobbie Ttooulis said, “The research validates, and more importantly puts a value on, what we’ve always known to be true. That lack of delivery options results in lost sales at the checkout.”

“In our experience, retailers are well aware of this. However, they struggle to overcome the internal costs and complexities of working with multiple carriers. That’s why we’re seeing a clear shift away from traditional approaches, with retailers seeking multi-carrier partners to resolve this.”

Enterprise Times: What this means for business.

In today’s competitive business environment attracting and retaining customers remains the key challenge for businesses. Particularly in the current macroeconomic situation of rising inflation, the Ukrainian war and global supply chain issues. Increasingly, consumers choose convenience and genuine value for money. They also expect a positive, quick, and hassle-free online shopping experience, including reliable delivery services and prompt returns. They reject intolerant of delays or unnecessary obstacles along the customer journey.

For many retailers, meeting these expectations will be the difference between success or failure. It is essential for enterprises to consistently offer positive shopping experiences to help differentiate themselves from the crowd. While many retailers focus on optimising their websites, product ranges and marketing strategies, they frequently overlook one of the most critical aspects of the customer journey – the delivery to customer doors.

This report is interesting because it explores the critical role of delivery. Particularly as brands strive to create outstanding shopper experiences within a frictionless customer journey. Many delivery organisations believe that current last-mile delivery models are not sustainable for full-scale implementation across all locations. Furthermore, free shipping costs cannot be maintained unless delivery costs are reduced through automation. Issues, unfortunately, not addressed in the report. But nonetheless an interesting report.

LEAVE A REPLY

Please enter your comment!
Please enter your name here