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Research by iForce finds online retailers need to offer a variety of delivery options

Online retailers have improved the delivery options they now offer to customers, according to a research update carried out by iForce, the UK’s leading outsourced multichannel specialist logistics operator.

Extensive market research carried out by iForce in October 2009 found the majority of online retailers had yet to embrace the need to offer a variety of delivery options to improve their customer proposition.

To gauge if there has been a change, on 1 April 2010 iForce repeated this research on the same online retailers it surveyed previously. "The survey results demonstrate a positive step forward in terms of the delivery options on offer to consumers," stated Geoff Taylor, Director of Client Services at iForce.

The key findings from the Update on Delivery Options survey include:

a higher percentage of retailers are now offering enhanced delivery options compared to 6 months ago – 8% more retailers now offer ‘Saturday’ and ‘Named Day’ options;

the average standard delivery charge has been reduced by 9% to £3.52, however ‘Next Day’ charges have increased by 9% to £6.48;

more online retailers are using free delivery as an incentive for customers to increase their order value but minimum order values are increasing by 18.5% when compared to October 2009;

cut off times for placing an order, especially for ‘Next Day’ deliveries are migrating to later in the day, which is positive news for consumers.

One result from the research that surprised Geoff Taylor was a fall in evening deliveries while all other types of deliveries are now offered by more online retailers (‘Saturday’ and ‘Named Day’ increased the most). "This is could be due to either to low consumer take up or prohibitive cost to serve," he said. "Neither of these issues should, however, deter retailers focused on consumer satisfaction from offering evening deliveries."

The number of retailers offering free carriage over an order value threshold has jumped from 10% to 35%. However, the average order value at which this threshold kicks in has risen from £66 to £81. "Imposing high qualifying criteria could have a negative impact in overall sales growth under this incentive," warned Geoff Taylor. This increase in the minimum order value for free delivery is coupled with a 9% increase in the average cost of ‘Next Day’ delivery. "This is surprising during a time of low inflation and poor retail sales," said Geoff. "Neither of these pricing decisions will contribute to the argument in favour of the expansion of on-line retailing.

The survey also reveals some ambiguity continues to surround delivery charges. "Online retailers can assist their consumers by making theses charges as clear as possible and certainly before the ‘Checkout’ process," said Geoff. However, several of the online retailers sampled in the latest survey did have dedicated pages with price matrixes clearly showing delivery options and charges.

With the research showing a positive step towards online retailers extending last order times, Geoff Taylor pointed out: "Online retailers should ensure that operational processes exist to react to large volumes of orders being received during the last moments before the daily cut off time, particularly during peak trading periods."

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