Retailers and delivery companies need to work together to remove a series of barriers to unlockthe huge potential of cross-border e-commerce, according to research on the UK, Germany and Russia
markets by Hermes UK, which plans to offer cross-border deliveries from next year.Hermes UK’s fourth annual ‘Parcel Deliveries Usage and Attitude Survey’, which for the firsttime included 1,000 responses from regular e-retail consumers in both Russia and Germany inaddition to 1,000 in the UK, revealed some strong differences in consumer attitudes across thethree countries with regard to parcel delivery, security, and payment. But it also found a numberof delivery-related barriers that were still blocking the full potential of cross-bordertransactions.
Just 2% of regular e-consumers in Germany and only 9% in the UK reported buying regularly onlinefrom foreign retailers, although the figure was higher in Russia at 24%. More than 50% were put offcross-border transactions by high delivery charges and the difficulty of returning faulty orunwanted deliveries.
There were also high levels of concern around potential credit card fraud, whether the goodswould actually arrive, and how long cross-border delivery would take. Over a third felt thatsorting out any issues or problems would be too difficult.
The study also highlighted the strong differences around payment methods in the countries, withmany respondents in Germany used to receiving an invoice after receipt of their purchase and over athird of all Russian respondents used to paying cash on delivery. PayPal was relatively popular inall three countries.
The majority of respondents agreed that e-commerce parcel delivery services overall wereimproving and as a result their service expectations have increased. The added-value services mostfavoured across the three countries included the ability to specify more time slots, regularcommunication from the driver and retailer, and parcel tracking. In addition nearly a third ofrespondents said they would like Sunday deliveries.
Another key finding relatively constant across all three regions was that if there were no costsattached to any delivery option, the respondents overwhelmingly chose ‘delivery to home’ over anyother option. In the UK 85% preferred home delivery, in Germany 87% and in Russia 68% and thefigures were almost identical regardless of the value of the item.
Less than 1% of UK consumers listed collection from the retailer as their preferred deliveryoption for low-value items, although this figure increased to 2% and 4% respectively for mid-value(€85) and high-value (€600) items. Among consumers in Germany, where ‘click and collect’delivery-to-store options are less common, 1% or fewer consumers stated this as a preferreddelivery option.
However, consumers in Russia were more open to this delivery method, with 4%-5% preferring itfor low- and mid-value items, and 10% listing it as a preferred option for high-value items.
Gary Winter, sales and marketing director at Hermes UK, said that although UK retailersincreasingly favoured in-store collections, offering free to-store delivery because of thepotential to make further sales, it was “a compromise, at the expense of the consumer”.
He added: “I was a little surprised by how high the figures were in favour of home delivery,especially since ‘click and collect’ has seen such strong growth, but it does suggest that thisservice is purely price driven. As always consumers want convenience and certainty when it comes togetting their parcels and if they can get that from a home delivery service it seems that there isno contest.”
Delivery to a consolidation point such as a ‘parcel shop’, locker box or post office wasfavoured by just 2-3% of UK regular online consumers and by just 1-2% of Russian e-retail regulars,although it was a preferred option for 7% of German customers for low to mid-value items and 5% forhigh-value items. Around 10% of German e-consumers had received a delivery to a locker box in thelast 12 months, compared with 1% in the UK and 3% in Russia.
Proof-of-delivery signatures and ID checks were increasingly preferred in all three countries asthe value of items increased, although it was demanded by a particularly high proportion (62%) ofRussian consumers for high-value items, compared with around 40% in Germany and the UK.
Roughly two thirds of Russian consumers expected delivery charges to be added to purchasesirrespective of their value, whereas only around a quarter of German consumers expected deliverycharges. In the UK, around one third expected delivery charges for low-priced items, and roughlyhalf expected charges for mid- and high-value goods. Within all three countries, those consumerswho expected additional delivery charges believed these would be higher for high-value items thanfor low-value items.
Almost 60% of regular e-consumers in the UK and Russia said they were shopping online more thanthey were 12 months ago compared with 44% of Germany consumers, with just a few per cent shoppingless often online. More than one third of UK (41%) and Russian (36%) consumers expected to increasetheir frequency of online shopping in the coming year and 21% of German e-shoppers.
In a reflection of the relative maturity of the markets, frequent online shoppers who requirehome delivery services account for 26% of the UK adult population, compared with 11% in Germany andjust 1% of Russia’s 120 million adult population.
Winter commented: “The research shows that there are phenomenal growth opportunities forretailers and delivery companies overseas, but they need to work together to get it right.Certainly one size does not fit all, and meeting the vastly different consumers’ requirements onall aspects of the service is key.”
He said more details of Hermes’ plans to offer cross-border delivery services would be revealedearly next year, but it would involve partnerships with Hermes’ other international operations “andother like-minded businesses”.
