Saturday February 24, 2024

Omnichannel experiences will shape e-commerce in 2024, Auctane report finds

Consumers go omnichannel
Consumers go omnichannel

Consumers in different European markets, North America and Australia are embracing a true omnichannel approach to shopping online, forcing carriers to offer flexibility and choice to retailers to ensure all delivery needs are being met, according to a new report released yesterday (Feb 6) at The Delivery Conference in London.

The Ecommerce Delivery Benchmark Report 2024, which surveyed 8,000 consumers and 400 merchants across the UK, US, Germany, France, Spain, Italy, Canada and Australia, revealed how 75% of shoppers are using digital and physical touchpoints on the same customer journey.

Consumers are using everything from social media, e-commerce platforms, physical stores and retailer websites to shop, while choosing different delivery and returns speeds and methods, such as home, PUDO, lockers and in-store, to meet their changing requirements.

The report also found that physical interactions throughout the customer journey are contributing significantly to e-commerce sales. In the UK, for example, a staggering £52 billion – nearly half – of UK online non-food sales in 2023 interacted with physical touchpoints.

Overall, the report highlighted the growing importance of omnichannel strategies that seamlessly blend online and offline experiences.

“A major opportunity for brands”

The research was conducted by Auctane, a family of brands, including Metapack and ShipEngine, offering shipping and logistics technologies, and carried out in partnership with consultancy Retail Economics.

“The £52 billion figure reveals a fascinating evolution in consumer behaviour, and a major opportunity for brands,” said Al Ko, CEO of Auctane. “We’re moving beyond simply “online” or “offline” shopping. Today’s consumers seamlessly blend physical touchpoints, like stores, with social media discovery. They’re even showing openness to new innovations like AI for streamlining the most tedious parts of the shopping process, like delivery and returns.

“Retailers who excel at crafting this omnichannel experience – where browsing trends on social media inspire in-store visits and technology streamlines logistics – will be well-positioned for success in 2024. It’s not just about convenience, it’s about fostering a dynamic, personalised journey that builds lasting brand loyalty,” Ko added.

Delivery requirements

To help retailers meet the complex omnichannel needs of their consumers, carriers need to offer flexibility and choice, explained Richard Lim, CEO of Retail Economics, who spoke exclusively to CEP-Research at The Delivery Conference yesterday (February 6) in London.

“Carriers need to put themselves in the perspective of the retailer and provide a variety of options that can service their core needs and their consumers’ needs when it comes to delivery,” he said.

“This could include same-day, next-day, timed delivery slots, standard delivery, which is a bit more cost effective, and different last mile options, such as PUDOs, lockers, home, etc. Carriers also need to build deeper relationships with retailers so they can build trust.”

Fast deliveries

The Ecommerce Delivery Benchmark Report 2024 also asked people about their specific delivery habits and preferences. It found that 55% of consumers across all markets expect delivery to arrive within just 48 hours – a 5% increase compared to 2023, with Italy (54%), Canada (49%) and Australia (47%) showing the most demand for speedier delivery.

Meanwhile, 73% of international shoppers stated home delivery as their preferred go-to option. However, OOH delivery options, such as lockers, click-and-collect, and other pick-up points, are gaining momentum, forming a significant and rising share of consumer delivery preferences.

More out-of-home delivery

Adoption of OOH delivery is particularly pronounced in EU markets, where OOH delivery networks are widely accessible and well-integrated into courier systems. For instance, 94% of online sellers in Spain provide OOH delivery options to customers – the highest among the eight international markets.

Even in the US and UK, where free home delivery is commonplace, one in four consumers now opt for out-of-home delivery as their first choice, up from less than a fifth in our 2021 benchmark survey.

French exception

“One surprising finding for me from the report was that the proportion of people that bought online but then picked up in store in France was more than double the proportion in the UK,” said Lim.

“The click and collect culture and utilising stores in France are much more prevalent than in the UK, but I believe this will change. There is now a commercial drive for more retailers to start using PUDOs and lockers to help lower the cost of delivery and returns.”

Conversion factors

Delivery cost, meanwhile, remained the most important conversion factor for shoppers – 35% in 2024, compared to 32% in 2023, followed by speed of delivery, convenience, flexible returns, tracking and green delivery.

In the UK, 42% of consumers stated the cost of delivery as the most important factor to them when shopping online. 65% of surveyed UK consumers were less likely to shop with a brand due to high shipping costs, while 50% are unwilling to pay for premium deliveries.

And more than half (55%) of online shoppers across all markets now expect an order to arrive within two days as standard, but only a third of online merchants currently offer this. A free three-day or four-day shipping window is the slowest most consumers are willing to tolerate before they shop elsewhere.

Reverse logistics

While most consumers still expect free online returns, an increasing number are open to paying for a seamless returns experience. In 2024, 28% of shoppers expressed a willingness to pay for returns, up from 24% the previous year. Notably, over half of Gen Zs are willing to pay for a quick and hassle-free return, making them three times more likely than Boomers (aged 65+) to do so.

Out-of-home returns are also gaining momentum. 30% of surveyed UK consumers reported a preference for in-store returns and 25% favoured PUDO locations. The research also reveals a distinct generational divide in frequency of returns: across markets, Gen Z leads the pack, returning 19% of their apparel purchases on average.

Navigating challenges in 2024

Despite easing inflationary pressures, surveyed merchants cited a trio of concerns heading into 2024: rising overhead costs (37%), weak customer demand (31%), and intense competition (27%). In this dynamic landscape, outshining the competition will ultimately require brands to orchestrate this frictionless customer journey.

“In 2024 I believe we will see an intense focus on profitability due to the soft economic environment, with retailers and carriers focusing on trying to protect margins, driving efficiencies, and reducing costs. I believe we will also see deeper partnerships between retailers and carriers to help drive growth and meet consumers’ increasing demands for a true omnichannel e-commerce and delivery experience,” Lim concluded.

SourceAuctane, Retail Economics, The Delivery Conference, CEP-Research

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