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Retailers are underestimating the sway free shipping has on UK shoppers

Laura  Barnes
Retailers are underestimating the sway free shipping has on UK shoppers

According to a new report from Temando, there is a misalignment between cost-sensitive online shoppers and UK retailers.

The shipping and fulfilment technology company’s 2017 State of Shipping Report has found that 86% of shoppers prefer free to fast delivery, yet retailers assume the preference is more evenly split at 43% and 57% respectively.

At the same time, convenience plays a key factor in conversion with 54% of shoppers stating they would buy from a competitor when the delivery service they seek isn’t provided.

“Recent upheavals in the local market such as the uncertainty of Brexit may have impacted the buying behaviour of consumers, who we see to be far more conservative than their American counterparts when it comes to how much they’re willing to part with for Prime-like shipping services,” said Carl Hartmann, co-founder and CEO of Temando.
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The report indicates that while some retailers are responding to customer demands with free standard shipping every day (27%), free shipping with minimum spend (32%) and free shipping for new customers (11%), almost a quarter of retailers admitted that that they don't use free shipping as a promotional tool.

Yet 58% of shoppers stated that they would shop more online if free shipping was offered. 54% said they would consider increasing their basket size to qualify for free “hyperlocal” delivery (1-3 hours).

“Consumers are pushing for ultimate value, with almost 60% indicating that they’ll abandon cart due to high shipping costs. Local retailers are left scrambling to find the right balance between addressing shoppers’ demands and preventing rising carrier-related costs from cannibalising their bottom line,” said Hartmann.

While almost all retailers acknowledged the value of shipping to enhancing customer experience (CX), only 29% are planning to invest in it in the next 12 months, while 16% admitted that they struggle with it. 32% of retailers saw an uplift in CX when they introduced better shipping options.

“A positive or negative shipping experience has a larger impact in the UK compared to the U.S. as a higher share of shoppers here will decide if they’ll either be a repeat customer or never shop again with a retailer based on the quality of their delivery experience,” commented Hartmann.

The report found that convenience is a key conversion metric, with up to 58% of shoppers saying they would abandon their cart and buy from a competitor if a premium delivery service they are seek isn’t provided.

“Rather than offering a single, generic shipping option, retailers need to map their delivery experiences to the lifestyle of today’s customers. Dynamic choices such as hyperlocal or same-day delivery for those with inner city postcodes, or specified time-slot delivery for busy families based in suburban neighbourhoods are options that retailers may want to consider,” suggested Hartmann.

“This way shoppers will be less inclined to seek alternative ways to purchase products and will continue on the buying path as intended.”

Read the Temando’s 2017 State of Shipping in Commerce UK report in full here.

Tags: Retail , Online shopping , temando , free shipping

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