British e-retail customers are increasingly unwilling to pay forpremium parcel delivery services and more than half of customers now expect delivery to
be free for orders of £30 (€38) or less, according to a survey commissioned by Hermes UK publishedyesterday.The third annual Parcel Deliveries Usage and Attitudes Survey of 1,000regular internet shoppers found that delivery cost is even more important to customersthan two years ago, with 76% rating it as ‘very important’, compared with 63% in 2010 and 73% lastyear. Only 13% rated guaranteed next-day delivery as ‘very important’, while a further 30% regardit as ‘quite important – down from 16% and 35% in 2010 – and only 50% of customers would be willingto pay more than £1 (€1.25) for the privilege.
Specific-day delivery and real-time information remain of far greater importance to customers,stated as ‘very important’ by 44% and 43% of respondents, respectively. These two requirements haveremained broadly similar in importance over the last three years, with 80% describing specific-daydelivery as ‘very important’ or ‘important’ and 75% regarding real-time information as ‘veryimportant’ or ‘important’.
Nevertheless, few people are prepared to pay significantly extra for these services either, withonly 14% prepared to pay extra for real-time information and only 28% of respondents prepared topay more than £1 for specific-day delivery. And although the importance of SMS notification ofdeliveries is growing among customers, only 3% were prepared to pay more than £1 for it, with thevast majority unwilling to pay any premium for the service.
Gary Winter, Hermes UK’s sales and marketing director, commented: “Despite the demand forgreater choice and flexibility, there is little or no appetite from the consumer to pay for anypremium delivery options.”
Of the respondents that were prepared to pay more for next-day services, Winter observed thatonly a small fraction were prepared to cover the additional costs that such a service entailed. “One of our competitors charges £3.75 for next-day delivery, but that would lose the vast majorityof customers, who would not be prepared to pay that,” he said.
“Cost is the most important thing, and knowing when a shipment is coming is more important thanspeed, while tracking is becoming the norm. Keeping your promise is vital; for the vast majority ofpeople, it is about reliability and price, not speed.”
He expressed particular surprise that 17% of respondents expected online purchases costing lessthan £10 should be delivered free. “I am not sure that they have thought through the economics ofthat,” Winter observed.
A further 18% felt orders of between £10 and £20 should be delivered free and another 22%expected free delivery for orders of between £20 and £30. “That is quite staggering,”he added.
The research also showed that there is no longer a strong preference for the time or day thatpeople want to receive parcels, although there is “still a slight preference” for a Saturdaydelivery or early evening between 5-7pm on weekdays, Hermes observed. Indeed, 90% ofrespondents in full-time employment said they would find evening deliveries appealing if offered bya retailer, while 58% of those living in urban areas would find it appealing if aretailer offered to make deliveries to a ‘ParcelShop’– an option offered by Hermes UK sinceJune.
There has also been a significant rise in the number of people happy for deliveries to be leftwith a neighbour or in a safe place if they are not at home to receive it, compared with the firstsurvey in 2010. “That has become increasingly accepted,” commented Winter.
Hermes concluded from the survey that the online retail environment “increasingly has an ‘openall hours’ mentality, with savvy internet shoppers wanting to be in complete control and makebuying decisions based on flexible and convenient delivery solutions”. The company noted the surveyfinding that four in ten consumers were now significantly influenced when choosing a retaileronline by the availability of a broad range of delivery options – such as to home, safeplace, neighbour, ‘ParcelShop’, store or place of work.
Carole Woodhead, CEO of Hermes UK, commented: “The delivery expectations of the consumerare higher than ever and the findings of the survey underline the importance for carriers andretailers to work together to develop highly flexible, responsive and efficient solutions that meetthe precise needs of the Internet shopper. The consumer is shopping online because of theconvenience and savings that can be made, so the delivery needs to reflect these motives.”
