Solid Q1 growth for e-retail orders, but on-time issues persist
UK online retail delivery order volumes were up 9.6% year-on-year in March, according to the IMRG MetaPack UK Delivery Index. Total growth for the first quarter stood at 12.5% (versus a forecast of +13% for 2018 as a whole). Over the same period, online retail sales revenue growth came in at +15.4%.
The first week of March featured heavy snowfall across the UK, which created significant challenges. On-time delivery performance for March was seven percentage points below the rate recorded in March 2017. There is more to it than the weather, however – with the exception of January 2018, it has been below 90% since July 2017, with the rolling weighted average over the past 12 months standing at 88%.
The most likely driver of this over the longer-term is the greater use of next-day delivery, though there is some evidence that this shift may be reaching a plateau. The percentage of orders using next-day services has grown in March for the past five years. Yet in March 2018, next-day still accounted for a higher share of orders than economy, but by a lower share than that in the same period last year.
Andrew Starkey, Head of e-Logistics, IMRG, says: “Easter was early this year – falling in March, while it was in April in 2017 – so it may be that next month’s results record a bit of a slowdown but, if so, that would likely be a blip. The evidence is that retailers are increasing the rate at which they evolve their operations to cater for an ever-more demanding customer – such as in the opening of highly automated warehouses by some large retailers, including Shop Direct and Sports Direct. We can probably expect to hear more such announcements over the next 12 months.”
Sign up for our free retail technology newsletter here.