2020
9
UK Online Retailing: Delivery, Collection and Returns Market Report 2020
2020-11-20T03:07:04+00:00
OX989970
2995
127794
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Report
en_GB
“Online retail has seen rapid growth in light of COVID-19 and this has placed a strain on logistics networks across the sector. The sector has reacted rapidly to meet demand…

UK Online Retailing: Delivery, Collection and Returns Market Report 2020

$ 2,995 (Excl.Tax)

Report Summary

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Online Retailing: Delivery, Collection and Returns – UK market including the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Covered in this report

One of the biggest threats to the market in 2020 has been the potential for logistics networks to be overrun by the additional demand caused by COVID-19. Significant investment has had to be made to ensure the demand for home delivery can be met, as well as that the safety of staff and customers is protected. This investment should mean disruption is minimised during the second lockdown in England, but the pressure on networks will be acute as retailers have to pivot to fulfil more demand online during the busiest time of year for the retail sector.

Expert analysis from a specialist in the field

Written by Nick Carroll, a leading analyst in the Retail sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Online retail has seen rapid growth in light of COVID-19 and this has placed a strain on logistics networks across the sector. The sector has reacted rapidly to meet demand and from consumers there is a new-found respect for the work done by delivery personnel. However, with online set to see a longer-term boost from the pandemic, the work to scale and find sustainable solutions to meet this demand is just beginning.
Nick Carroll
Associate Director of Retail Research

Table of Contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • COVID-19: Market Context
          • Products covered in this Report
          • Executive Summary

              • Impact of COVID-19 on online retailing
                • Figure 1: Short, medium and long-term impact of COVID-19 on online retailing, October 2020
              • The market
                • Online demand soars in light of COVID-19
                  • Figure 2: All online sales and forecast (including VAT), 2015-25
                • Collection accounts for just under a fifth of online demand
                  • Figure 3: Estimated share of online sales, by fulfilment method, 2019
                • Confidence takes a hit leading to customers holding back
                  • Figure 4: The financial confidence index, January 2015-October 2020
                • The COVID-19 recession has polarised consumer finances
                  • Figure 5: Current financial situation compared to a year ago, by household income, October 2020
                • Companies and brands
                  • Amazon the leading player online
                    • Figure 6: Leading retailers’ share of all online sales 2019
                  • Online is not immune to the demand for more sustainable business practices
                    • Figure 7: Loop reusable container delivery, 2020
                  • The consumer
                    • COVID-19 driving greater purchasing levels across all categories
                      • Figure 8: Products purchased in the past year, 2019-20
                    • Uptick in home deliveries as confidence in collection waivers
                      • Figure 9: Methods of delivery used in the past year, 2019 and 2020
                    • Half of online shoppers have made a return, which is set to grow with greater online penetration
                      • Figure 10: How goods were returned in the past year, August 2020
                    • Nearly half of online shoppers are Amazon Prime members
                      • Figure 11: Membership of leading retail delivery pass schemes, 2019 and 2020
                    • Same-day pricing is sensitive to order value
                      • Figure 12: Price-sensitivity for same-day delivery in non-foods, August 2020
                    • The Royal Mail brand in a strong position based on its heritage
                      • Figure 13: Correspondence Analysis, brand profiles of leading delivery companies, August 2020
                    • Customers recognise the effort of delivery personnel during COVID-19
                      • Figure 14: Attitudes towards online retail delivery, collection and returns, August 2020
                  • Issues and Insights

                    • Reshaping the logistics network to meet heightened demand caused by COVID-19
                      • Reinvigorating click-and-collect post-pandemic
                      • The Market – Key Takeaways

                        • Confidence and demand take a significant hit from COVID-19
                          • Online sales soar in 2020 and will be given a longer-term boost by the pandemic
                            • Collection takes a backseat for now but holds significant long-term potential
                            • Market Drivers

                              • Financial confidence took a hit during lockdown but has seem some recovery
                                • Figure 15: The financial confidence index, January 2015-October 2020
                              • Uncertain outlook means consumers cut back
                                • Figure 16: COVID-19 Tracker: Impact on non-essential spending, 16 April-1 October 2020
                              • Retail took a significant hit during the first lockdown, but there are signs of some demand being released
                                  • Figure 17: Annual % change in retail sales, by category, H1 2020 and July-August 2020
                                • A polarising recession
                                  • Figure 18: Current financial situation compared to a year ago, by household income, October 2020
                                • Online penetration and delivery volumes set to break records in Q4 2020
                                    • Figure 19: Online sales as a proportion of all retailing and by broad category, January 2019-August 2020
                                • Online and Collection Market Size

                                  • The impact of COVID-19 on online retailing
                                    • Figure 20: Short, medium and long-term impact of COVID-19 on online retailing, October 2020
                                  • COVID-19 to drive significant growth in both the short and longer term for online retailing
                                    • Figure 20: All online sales and forecast (including VAT), 2015-25
                                    • Figure 21: All online sales and forecast, 2015-25
                                    • Figure 22: Estimated breakdown of all online sales, by product category, 2019
                                    • Figure 23: All online sales as a percentage of all retail sales, 2015-24
                                  • Collection to take a backseat in 2020 but holds longer-term potential
                                    • Figure 24: Estimated share of online sales, by fulfilment method, 2019
                                    • Figure 25: Estimated collection market size, 2015-20
                                  • Market drivers and assumptions
                                    • Figure 26: Key drivers affecting Mintel’s market forecast, 2015-24 (prepared on 21 October 2020)
                                  • Forecast methodology
                                  • The Consumer – Key Takeaways

                                    • Growth in purchasing levels across all categories in light of COVID-19
                                      • Delivery sees a boost whilst the collection picture is mixed
                                        • Long-term boost to online will also see online returns volumes jump
                                        • Online Retail Use and Products Purchased

                                          • The majority shop online
                                            • Online purchasing has grown significantly year-on-year
                                              • Figure 27: Products purchased in the past year, 2019-20
                                            • Online demand has remained heightened even as stores have reopened
                                                • Figure 28: COVID-19 Tracker: Impact on online shopping use, by age, 16 April-1 October 2020
                                              • The repertoire of products purchased online has grown
                                                • Figure 29: Repertoire of products purchased in the past year, by age, August 2020
                                            • How Purchases Are Received

                                              • Home delivery has become more dominant…
                                                • Figure 30: Methods of delivery used in the past year, 2019 and 2020
                                              • …as concerns around using click-and-collect rise…
                                                • Figure 31: Attitudes towards click-and-collect as a result of COVID-19, by age, August 2020
                                              • …but some have been utilising click-and-collect more during the pandemic
                                                • Figure 32: COVID-19 Tracker: Impact on online shopping use, 16 April-1 October 2020
                                            • Returns

                                              • Half of consumers have made a return in the past year
                                                • Figure 33: How goods were returned in the past year, August 2020
                                              • Younger consumers more likely to make a return
                                                • Figure 34: How goods were returned in the past year, by age, August 2020
                                              • COVID-19 will lead to a higher level of returns in the long term for retailers
                                                  • Figure 35: Attitudes towards returning online purchases, August 2020
                                              • Delivery Passes

                                                • Half are members of at least one delivery pass scheme
                                                  • Figure 36: Membership of leading retail delivery pass schemes, 2019 and 2020
                                                • Prime: more than just delivery
                                                  • Figure 37: Amazon Prime services regularly used, by access level to Amazon Prime, October 2019
                                                • Delivery pass ownership skews towards younger online shoppers
                                                    • Figure 38: Delivery pass ownership, by age and socio-economic group, July 2019
                                                • Price-sensitivity in Same-day Orders

                                                  • Most still think it is easiest to go in-store for urgent purchases
                                                    • Figure 39: Attitudes towards same-day delivery, by age, August 2020
                                                  • Sensitivity in paying for same-day delivery tied to basket size
                                                      • Figure 40: Price-sensitivity for same-day delivery in non-foods, August 2020
                                                    • Younger shoppers in general more receptive to paying for same-day delivery
                                                      • Figure 41: Percentage of online shoppers who would pay £5 or more for same-day delivery, by age and order size, August 2020
                                                  • Perceptions of Leading Delivery Companies

                                                      • Methodology
                                                        • The Royal Mail brand in a strong position
                                                          • Figure 42: Correspondence Analysis, brand profiles of leading delivery companies, August 2020
                                                          • Figure 43: Perceptions of leading delivery businesses, August 2020
                                                        • Positive perceptions strongest for Royal Mail among older shoppers
                                                            • Figure 44: Perceptions of leading delivery businesses, under-45s vs over-45s, August 2020
                                                            • Figure 45: Perceptions of leading delivery businesses, under-45s vs over-45s, August 2020
                                                        • The Impact of COVID-19 on Delivery, Collection and Returns

                                                          • COVID-19 drives greater online volumes, placing pressure on logistics
                                                              • Figure 46: COVID-19 Tracker: Impact on product availability, 16 April-1 October 2020
                                                            • A greater spotlight is being shone on the hygiene of online deliveries
                                                              • Figure 47: Attitudes towards the impact of COVID-19 on hygiene and deliveries, by age, August 2020
                                                              • Figure 48: Impact of COVID-19 on trying on fashion items, June-October 2020
                                                            • COVID-19 may mark a change in attitudes towards delivery personnel
                                                                • Figure 49: Attitudes towards the impact of COVID-19 on delivery services, by age, August 2020
                                                            • Leading Players – Key Takeaways

                                                              • Amazon the dominant player online
                                                                • Scaling of operations key to meeting the challenges of COVID-19
                                                                  • COVID-19 forces brands to engage with online like never before
                                                                  • Competitive Strategies – Leading Retailers

                                                                    • Amazon remains the dominant player
                                                                      • Figure 50: Leading retailers’ share of all online sales, 2019
                                                                    • Amazon
                                                                      • Grocery: complex and costly for retailers
                                                                          • Figure 51: Store-based retailers online grocery sales as a percentage of total sales, 2014-20
                                                                        • Fashion: online retailers weathering the 2020 storm
                                                                          • Electricals: online penetration particularly high
                                                                              • Figure 52: Online electrical goods sales as a percentage of all spending on electrical goods, 2015-19
                                                                          • Competitive Strategies – Leading Delivery/Collection Operators

                                                                              • Courier and express delivery
                                                                                • Royal Mail
                                                                                  • DPD
                                                                                    • UPS
                                                                                      • DHL
                                                                                        • Hermes Parcelnet
                                                                                          • Figure 53: Leading delivery operator’s turnover, 2018-20
                                                                                        • Third-party collection
                                                                                          • Collect+
                                                                                            • Figure 54: Leading third-party collection turnover, 2019
                                                                                          • New challengers: From foodservice to retail delivery
                                                                                            • Figure 55: Food delivery operator turnover, 2018-19
                                                                                        • Launch Activity and Innovation

                                                                                          • Retailers rush to provide more delivery slots
                                                                                            • Smaller players joining forces to compete
                                                                                              • Partnering to meet demand for deliveries
                                                                                                • Drone delivery dream edges closer
                                                                                                  • Figure 56: Co-op robot delivery service 2020
                                                                                                • Click-and-collect is helping retailers expand reach with lower costs
                                                                                                  • Royal Mail launches parcel collection service
                                                                                                    • Collection lockers rolled out nationwide in Singapore
                                                                                                      • Sustainability on the mind
                                                                                                        • Figure 57: Loop reusable container delivery 2020
                                                                                                    • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                      • Data sources
                                                                                                        • VAT
                                                                                                          • Abbreviations
                                                                                                            • Consumer research methodology

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