Will environmental consciousness change the direction of travel for delivery services in the UK?

3rd April 2019 16:24

Written by Rebecca Harris, Associate Director. Contact Rebecca here

Millennials have only ever known a society whereby convenience is King, and have never really had to wait for anything when it comes to goods and services. They ‘see it, want it, get it’ in so many aspects of their lives…

If they want to buy a pair of jeans at midnight, they go online and it’s delivered the next day – no waiting until they can get to the high street at the weekend.  If they want to watch a movie, they log on to their Netflix account and watch one there and then – no waiting for it to come on at the cinema or out on DVD. If they want to call a friend, they grab their mobile phone and ask Siri to “call Sam” – no waiting for other people in the house to get off the landline.

In response to this consumer trend and in conjunction with the continued growth in online shopping, retailers are constantly striving to reduce their delivery times. A survey conducted recently by DJS Research of 1,000 nationally representative UK adults showed that 10% of consumers across the UK tend to choose ‘same day delivery’ when purchasing non-grocery items online. This figure rises to 15% amongst millennials and 22% amongst Gen Z. Considering that ‘same day delivery’ is not a widely available delivery option, this figure is relatively high demonstrating the potential demand for this method.

 

Some of the major players - notably in groceries and fashion - are even trialling delivery within an hour of ordering services. Amazon led the way with this phenomenon with Prime Now, which was launched in 2015. This service offers delivery of all sorts of items – from toilet rolls to toy boxes - within an hour. More recently, Ocado announced that it was set to launch a new delivery service, Ocado Zoom. This is being trialed in West London, and offers delivery of groceries to the value of up to £60, within an hour.

However, as we become more environmentally conscious as a nation, will our priorities when it comes to the delivery of physical goods start to change?

There’s a whole debate to be had over what’s better for the environment in terms of online shopping or high street shopping, with online shopping often coming up as the greener option. But as retailers’ delivery (and let’s not forget returns!) offerings evolve and e-commerce continues to grow, at some point, could the balance tip in favour of high street shopping?

Last year, the number of parcels delivered in the UK increased by 11% taking the annual volume to 2.4 billion items, according to Ofcom’s Annual monitoring update on the postal market (2017-18).  It also revealed that Next Day delivery made up the majority of domestic parcel volumes (56%) as well as 65% of revenues.

Indeed, the number of delivery vans (many running on environmentally un-friendly diesel), has reportedly increased by 71% over the last decade. And if the prediction made in Mintel’s most recent Courier and Express Delivery report is correct, that the number of parcels shipped will rise to 4 billion by 2021, the number of delivery vans on UK roads look set to increase further still.

Online or high street shopping – which is better for the environment?

Of course, it’s much more complicated than simply weighing up the congestion and pollution caused by road traffic to make deliveries (high street shops are not completely green in their existence!), but surely if everybody made one shopping trip to the high street per week it would be better for the environment than everybody receiving several deliveries per week?

Bricks and mortar stores could respond to this potential change in priorities by opening for longer hours to better meet the needs of those who ‘see it, want it, get it’. Or perhaps we’ll simply see retailers taking more action to reduce their carbon footprint when it comes to delivery options, offering a ‘greener’ solution.  IKEA’s newest store in Greenwich has done just that – they offer delivery by electric bikes within a 3-mile radius. Others offer consumers the opportunity to choose a time when a delivery van is already in their area – meaning a cut-back in harmful emissions.

Either way, as caring for the environment moves up on the agenda for consumers, it’s certain that we’ll be hearing more from retailers on the topic in the context of their delivery and returns options.

Watch this space.

To find out more, or to conduct your own research within the retail sector get in touch with one of our retail specialists: Gill RedfernRebecca Harris or Sharon Nichols.

 

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