The number of parcels and packages generated through online shopping in the UK is likely toincrease by 70% by 2017, according to the British retail association IMRG (Interactive Media in
Retail Group).E-shopping parcel volumes in the UK will hit 2.2 billion by 2017, boosted by expected stronggrowth in international online sales, according to an IMRG report conducted in cooperation with thesupply chain management firm Manhattan Associates.
In 2012, the total volumes generated by UK e-retailers and consumers amounted to 1.3 billionparcels. This figure included items returned to retailers, based upon an industry average returnrate of 22%, according to the IMRG Metapack UK Delivery Index.
Andy Mulcahy, Head of Communications at IMRG, said: “The volumes of parcels and packages from UKonline retail are forecast to continue to grow rapidly over the next few years, and we furtheranticipate that by 2020 around one-third of online orders will be going cross-border in Europe.
“The UK’s online fulfilment infrastructure was initially set up to be very UK-centric, focusingon getting orders into the hands of domestic customers. As cross-border activity increases over thecoming decade, with it will come a big shift in how stock is stored, managed, controlled andmonitored to serve the requirements of the global consumer audience,” he pointed out.
With cross-border trade set to increase strongly in the coming years, the IMRG report looksat the challenges of coping with the rising order volumes from consumers across Europe and beyond.From the consumer’s perspective, the main issue is the reliability of the order fulfilment. As anexample, the report mentions the horsemeat scandal leading to a negative image of the internationalsupply chain.
From the retailer’s perspective, cross-border orders can be managed through the standard supplychain fairly well. But in case of volume growth or international expansion, retailers will have tostructure the supply chain in an efficient way to increase profit and customer experience whichrequires a strategic approach, the association explained.
Other challenges include perception of the brand and identifying the right market, reducingdouble shipping, streamlining quality control, in addition to managing both remote and local stockand returns.
Craig Sears-Black, Managing Director at Manhattan Associates, added: “The growth opportunityfrom selling products overseas and the ability to drive down supply chain cost through a moreflexible sourcing strategy are both very real for enlightened retailers. Introducing system-enabledbest practice to their international operations allows retailers to create an agile and efficientsupply chain that drives revenue and maximises margins for cross-border selling.”
