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Online shopping set to generate 1.35 billion deliveries a year by 2018

shop-onlineOnline retail is expected to see significant growth in deliveries over the next four years, according to a new report from Barclays, as people increasingly use smartphones and tablets to place orders and take advantage of new flexible and convenient delivery options.

 

The research, independently commissioned by Barclays’ Retail and Transport & Logistics banking sector teams, reveals that in 2013, products ordered online generated just over 1 billion deliveries; by 2018 this figure is expected to grow to over 1.35 billion, a 29% increase.

The Report shows that growth will largely be driven by clothing and footwear, but that the food and grocery market will also become increasingly important, overtaking books in the number of deliveries by 2018, as grocers introduce more convenient and flexible delivery and collection services.  Electricals is forecast to be the highest growth sector for deliveries, with the number of packages expected to increase by 61% over the next four years.

Volume of deliveries by product: 2013-18

Rank    Volume of deliveries by product in 2018 (number in brackets shows the number of deliveries in 2013)    % increase in delivery by product from 2013

1    Clothing & Footwear  – 256m (170m)    51%
2    Music & Film – 245m (159m)    54%
3    Food – 186m (134m)    20%
4    Books – 161m (134m)    39%
5    Health & Beauty – 150m (102m)    48%
6    Electricals – 105m (65m)    61%
7    Other – 61m1 (51m)    19%
8    Homeware – 31m (28m)    13%
9    Toys – 25m (20m)    22%
10    DIY & Gardening – 25m (20m)    27%
11    Sports – 11m (9m)    20%

Other includes: furniture, flooring, medical instruments, stationery, news items and other miscellaneous items  

Interestingly, the report shows that the number of people buying digital film and music downloads is expected to decline by 39%, falling from 160 million to 98 million, which is a natural evolution as a result of the increasing popularity of subscription-based services.

Richard Lowe, Head of Retail & Wholesale at Barclays, commented: “Not only is the online purchasing and delivery market growing, it is also having to evolve quicker and more radically than previously. Driven by the increasing use of tablet and mobile devices, almost seven in ten consumers say they are looking for more innovative and rapid delivery options such as Sunday delivery.  Although they seek more flexibility in delivery options, consumers are still very conscious of keeping prices low with cost influencing consumers preference more than any other factor including quality of service.

“Already, retailers are starting to introduce more convenient and flexible delivery services such as non- store based click and collect pick up points.  However, with the online sales momentum set to continue, our research shows that it is more important than ever for retailers to reassess their online strategy and boost investment in the online fulfillment process to maximise the benefits of this growing market place.”

Volume of deliveries by region: 2013-18

Rank     2013    2018    % increase
1    East Anglia – 97m     East Anglia – 131m    35%
2    Yorks/Humberside – 92m     Yorks/Humberside – 122m     33%
3    South West – 91m     South West – 121m     33%
4    Wales – 54m    Wales – 71m     31%
5    Scotland – 96m     Scotland – 125m     30%
6    North West – 104m     North West – 134m     29%
7    London – 131m     London – 167m     27%
8    East Midlands – 73m     East Midlands – 92m     26%
9    South East – 142m     South East – 178m     25%
10    West Midlands – 94m     West Midlands – 117m     24%
11    Northern Ireland – 33m     Northern Ireland – 41m     24%
12    North East – 45m     North East – 55m     22%