2022
9
UK Online Retailing: Delivery, Collection and Returns Market Report 2022
2022-11-02T03:08:08+00:00
OX1100549
2195
157117
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Report
en_GB
“The online channel has a strong value perception, which will continue to drive demand even though a majority of demand within the sector is discretionary. However, with consumers naturally highlighting…

UK Online Retailing: Delivery, Collection and Returns Market Report 2022

£ 2,195 (Excl.Tax)

Description

“The online channel has a strong value perception, which will continue to drive demand even though a majority of demand within the sector is discretionary. However, with consumers naturally highlighting price-sensitivity in the short-to-medium term, it is not just product prices that will be under scrutiny but the entire value equation of shopping online, including delivery, collection and return fees. While retailers are also under pressure they need to ensure any uptick in these areas do not create a barrier for customers to buy, and can use this period to drive shoppers towards delivery pass schemes which can create longer-term loyalty.”

– Nick Carroll, Analyst Category Director – Retail Insights, October 2022

Key issues covered in this Report

  • The impact that the cost-of-living crisis could have on delivery choice and online shopping intention
  • The size of the online retailing market and the collection market
  • Online purchasing by category
  • How purchases made online are received
  • Price sensitivity in same-day orders
  • Interest in future delivery, collection and returns innovations
  • Attitudes towards next-day delivery, returns charges, and sustainability in delivery methods.

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • Products covered in this Report
  2. Executive Summary

    • The five year outlook for online retailing
      • Figure 1: Category outlook, 2022-27
    • The market
    • Market size
      • Figure 2: Market size for online retailing (including VAT), 2017-22
    • Online penetration of sales hits record heights in 2021
      • Figure 3: Online sales as a percentage of all retail sales, 2017-27
    • Collection suffers during peak of the pandemic
      • Figure 4: Estimated share of online sales, by fulfilment method, 2021
    • Consumers’ financial wellbeing has fallen from the highs of 2021 …
      • Figure 5: Household financial wellbeing index, 2016-2022
    • … and most people are feeling the effects of price rises
      • Figure 6: Factors experienced in the past two months, 2022
    • Leading retailers
    • Top 10 players account for 72% of the market
      • Figure 7: Top 10 online retailers within the UK, by estimated market share (excluding VAT), 2021
    • The consumer
    • Shopping declines across all categories
      • Figure 8: Products purchased online over the last three years, 2020-22
    • Home delivery still king when it comes to online shopping
      • Figure 9: How purchases are received, 2022
    • Younger shoppers more keen on collection
      • Figure 10: Use of delivery and collection, by age, 2022
    • Majority of shoppers happy to pay for deliveries
      • Figure 11: Price sensitivity on same-day delivery for online orders (non-food), by order value, 2022
    • Basket value is key factor in how much consumers are willing to pay
      • Figure 12: Price sensitivity on same-day delivery for online orders (non-food), by order value and cost of delivery, 2022
    • Courier or postal collection is a particularly convenient option
      • Figure 13: How consumers return their online purchases, 2022
    • Almost half of consumers not willing to pay for courier returns
      • Figure 14: Consumer willingness to pay for returns, 2022
    • Sustainability is high in the minds of consumers
      • Figure 15: Attitudes towards delivery, 2022
    • Free returns hold strong appeal for shoppers despite ethical concerns
      • Figure 16: Attitudes towards returns, 2022
  3. Issues and Insights

    • Avoiding the subscription cull in the wake of the cost-of-living crisis
    • The returns question – is charging for returns right in the current climate?
  4. Market Size and Performance

    • Online market to rebalance but remains growth area in the medium term
      • Figure 17: Online Retailing, category outlook, 2022-27
    • Online sales to rebalance in 2022 following peak demand during 2020/21
      • Figure 18: Market size for online retailing (including VAT), 2017-22
      • Figure 19: All online retail sales, market size and forecast, at current and constant prices, 2017-27
    • Online penetration of sales hits record heights in 2021
      • Figure 20: Online sales as a percentage of all retail sales, 2017-27
      • Figure 21: Estimated breakdown of all online sales, by product category, 2021
    • Amazon the online market leader
      • Figure 22: Top 10 online retailers within the UK, by estimated market share (excluding VAT), 2021
    • Collection suffers during peak of the pandemic
      • Figure 23: Estimated share of online sales, by fulfilment method, 2021
  5. Market Drivers

    • Inflation is the key concern for consumers and brands…
      • Figure 24: Inflation: overall index (CPI) and core categories, 2022
    • …and despite Government support, energy prices are still a major concern
    • Rising interest rates mean that the pressure will move up to middle- and higher-income households
    • High inflation and rising interest rates will weigh down the post-COVID recovery
    • Consumer spending power will be curbed
    • Unemployment is at a near-50 year low
    • Consumers’ financial wellbeing has fallen from the highs of 2021…
      • Figure 25: Household financial wellbeing index, 2016-2022
    • …and most people are feeling the effects of price rises
      • Figure 26: Factors experienced in the past two months, 2022
  6. Launch Activity and Innovation

    • Sustainability in delivery
      • Figure 27: Amazon micromobility hub delivery, 2022
      • Figure 28: Tesco solar powered trailer, 2022
      • Figure 29: Boots completes first community pharmacy drone delivery of prescription medicines, 2022
      • Figure 30: DPD robot delivery in Milton Keynes, 2022
    • Rapid delivery: supermarket and non-food grow the list of partners
    • Click-and-collect diversifies
    • Walmart breaks down barriers
      • Figure 31: Walmart in-home delivery, 2022
    • Efforts to Minimise Returns
  7. Online Channel Usage and Products Purchased

    • Vast majority of consumers are online shoppers
    • Shopping declines across all categories
      • Figure 32: Products purchased over the last three years, 2020-22
    • Decline in share of older consumers shopping online
      • Figure 33: Online shoppers by age over the last three years, 2020-22
    • Repertoire of products purchased online peaks among those aged 25-44
      • Figure 34: Repertoire of products purchased in the past year, by age, 2022
  8. How Purchases are Received

    • Home delivery still king
      • Figure 35: How consumers received their online purchases, 2022
      • Figure 36: How consumers received their online purchases, by current working arrangement, 2022
    • Younger shoppers more keen on collection
      • Figure 37: Use of delivery and collection, by age, 2022
  9. Returns: Use and Willingness to Pay for Returns

    • The Post Office the most popular choice for returns
      • Figure 38: How consumers return their online purchases, 2022
    • Retailers need to highlight returns options at point of purchase
      • Figure 39: How consumers return their online purchases, 2022
    • Almost half of consumers not willing to pay for courier returns
      • Figure 40: Consumer willingness to pay for returns, 2022
    • Younger consumers are happy to pay for convenience
      • Figure 41: Consumer willingness to pay for returns, by age, 2022
  10. Price Sensitivity for Same-Day Delivery

    • Same-day back on the agenda as a majority are happy to pay for the service
    • Willingness to pay declines as basket value increases
      • Figure 42: Price sensitivity on same-day delivery for online orders (non-food), by order value, 2022
    • Basket value is key factor in how much consumers are willing to pay
      • Figure 43: Price sensitivity on same-day delivery for online orders (non-food), by order value and cost of delivery, 2022
    • Younger shoppers more willing to pay for deliveries
      • Figure 44: Shoppers who would be willing to pay £5 or more for same-day delivery, by order-size and age, 2022
  11. Attitudes towards Delivery, Collection and Returns

    • Sustainability is high on the agenda for consumers
      • Figure 45: Attitudes toward sustainable delivery methods, by age, 2022
    • So-called ‘porch pirates’ a concern for shoppers
    • Speed is important but so is value
      • Figure 46: Attitudes around delivery, 2022
    • Free returns hold strong appeal for shoppers despite ethical concerns
      • Figure 47: Attitudes towards returns, 2022
  12. Interest in Innovations

    • Shoppers have laser focus on convenience
      • Figure 48: Areas for improvement or innovation in the delivery, collection and returns process, 2022
    • Older shoppers much more interested in simplified returns
    • Drones and driverless vehicles remain niche interests
      • Figure 49: Areas for improvement or innovation in the delivery, collection and returns process, by age, 2022
  13. Appendix – Data Sources, Abbreviations and Supporting Information

    • Data sources
    • VAT
    • Abbreviations
    • Consumer research methodology

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

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Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

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Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.

Data

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*databooks not available with UK B2B Industry reports.

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