UK Home Delivery & Fulfilment 2010
Verdict Research Limited, December 2010, Pages: 185
The UK home delivery market suffered a decline in 2009, with the store based channel badly impacted by consumers avoiding big ticket purchases. However, in 2010 we estimate the market has returned to growth, boosted by the e-retail channel. UK Home Delivery & Fulfilment 2010, analyses which sectors have proven the most resilient through examining both market trends and detailed consumer data.
Scope
- Detailed analysis of the channels within home delivery including store based, e-retail, mail order and TV shopping
- Thorough examination of the key characteristics of home delivery shoppers including demographic profile and motivation for using home delivery service
- Analysis of nine retail sectors including books, clothing & footwear, food & grocery and music & video, and the leading home delivery retailers used
- Overview and competitive assessment of leading logistics and fulfilment operators
Highlights
We estimate that the home delivery market grew by 3.0% in 2010, after a dip in 2009. Recovery is due primarily to rapid growth in the emerging categories of food & grocery and clothing & footwear. These categories have more than made up for consumers cutting back on their spending in the home-related areas hit by the property market downturn.
Having overtaken store-based retailing in 2009, in 2010 e-retail has reinforced its role as the leading ordering channel. However, there is still more retailers can do to improve the experience to make it a more appealing and effective way of ordering, especially for home-related goods, for instance with better website design.
Clothing & footwear is the most popular type of purchase for home delivery, with 13.7m shoppers. The rise of this sector was driven by widening product offer from players including ASOS, John Lewis and Tesco and targeting by major non-specialists like Amazon and eBay.
Reasons to Purchase
- Tailor your offer to more accurately reflect customer needs through our detailed analysis of home delivery consumers
- Identify the key issues in the market and plan accordingly in order to reduce risk and maximise growth opportunities
- Understand which sectors offer the most growth opportunities through analysis of market trends
TABLE OF CONTENTS
Overview 1
Summary 1
Home delivery market up 3.0% in 2010 to £44.9bn; 1
E-retail storms on in lead; 1
Market penetration static at three-fifths of population; 1
Clothing & footwear top sector for number of home delivery shoppers; 1
Amazon leading home delivery retailer by a distance; 1
Cheaper goods main motivation; 1
Consumer satisfaction rises … 1
… but they still want greater slot flexibility; 1
Price sensitivity on delivery charges remains high … 1
… but pressing down too much on delivery costs could be counterproductive. 1
Methodology 1
Executive summary 2
Key findings 2
Home delivery market up 3.0% in 2010 to £44.9bn; 2
E-retail storms on in lead; 2
Market penetration static at three-fifths of population; 2
Clothing & footwear top sector for number of home delivery shoppers; 2
Amazon leading home delivery retailer by a distance; 2
Cheaper goods main motivation; 2
Consumer satisfaction rises … 2
… but they still want greater slot flexibility; 2
Price sensitivity on delivery charges remains high … 2
… but pressing down too much on delivery costs could be counterproductive. 2
Main conclusions 2
Home delivery market returns to growth in 2010 2
Market analysis 18
Outline 18
Food and clothing drive home delivery growth 18
Expenditure growth 21
Some signs of market recovery 21
Home delivery market by channel 23
E-retail booms while mail order collapses 23
Home delivery market by sector 29
Music & video and food grow fastest in 2010 29
Consumer research summary 33
Key findings 33
Introduction 34
Customer characteristics 35
Better off families the big home delivery spenders 35
Newspaper preferences 42
Broadsheet readers the main target audience 42
Delivery frequency 46
Groceries fall back on frequency 46
Retailers used 49
Amazon leads while all others are far behind 49
Motivations 52
Ordering media 53
Internet far ahead of phone and instore ordering 53
Satisfaction 56
Recovery in satisfaction levels 56
Barriers to more frequent usage 58
Cheaper delivery still a key customer incentive 58
Attitudes to home delivery charges 59
Delivery charges crucial to appeal 59
Alternative delivery preferences 61
Neighbours the best alternative 61
Sector research analysis 62
Books 62
Popularity falls back 62
Men overtake women 65
Cheaper prices the main home delivery draw 68
Clothing & footwear 71
Rise in clothing & footwear’s popularity continues 71
Women show keenness for fashion 74
Time saving the leading motivation 77
DIY & gardening 80
Recession forces consumers to cut back 80
Upmarket 35–44 consumers lead in DIY & gardening 83
Consumers forced to use home delivery 86
Electricals 89
Hit hard by recession 89
Wealthy midlifers important to electricals 92
Low price becomes top motivation 95
Food & grocery 98
Sector bounces back after 2008 downturn 98
Women shoulder burden of food shopping 101
Attraction of time saving increases 104
Furniture & floorcoverings 107
Continued recovery from 2007 dip 107
35–44s hold back on furniture & floorcoverings 110
Instore ordering makes comeback 113
Gifts 116
Boom in gift buying in 2009 116
Better off consumers like to save time buying gifts 119
Amazon and the internet reinforce their dominance 122
Health & beauty 125
Major improvement in 2009 125
Women increasingly important in health & beauty 128
Time and price motivations fall back 131
Homewares 134
Recession squeezes homewares market 134
Men stop buying homewares 137
Time saving takes the lead 140
Music & video 143
Recovery after recession decline 143
Men remain the keenest music & video buyers 146
Price takes lead in music & video 149
Home delivery & fulfilment operators 152
Key issues 152
Price pressures and consolidation 152
International delivery a growth area but poses danger for retailers 154
Retailer perspective 155
e-fulfilment specialists 159
GSI Commerce (formerly Zendor) 159
iForce 161
MetaPack 163
General parcel delivery 165
City Link 165
DPD (formerly Parceline) 167
Nightfreight 169
Royal Mail/Parcelforce 171
UK Mail Group (formerly Business Post Group) 173
Home delivery specialists 175
Hermes (formerly Parcelnet) 175
Sprint Deliveries GB 177
Yodel (formerly Home Delivery Network) 178
Logistics specialists 180
Clipper Logistics 180
Unipart Logistics 181
APPENDIX 184
Definitions 184
Use Heading 3s, if required, to add structure to sections in the Appendix 184
Methodology 184
Further reading 185
Ask the analyst 185
Global Retail FreeView 185
Verdict consulting 185
Disclaimer 185
TABLE OF FIGURES
Figure 1: Home delivery report structure 2010 18
Figure 2: Home delivery purchase process 2010 19
Figure 3: Home delivery process 2010 20
Figure 4: Home delivery market £bn and change % 2005–10e 21
Figure 5: Home delivery channels sales breakdown % 2000–10e 25
Figure 6: Home delivery market growth by channel 2010e on 2009 26
Figure 7: Reconciliation of mail order, e-retail, TV shopping and home delivery markets 2010 27
Figure 8: Sector shares of home delivery market 2005 and 2010e 29
Figure 9: Number and penetration of home delivery users 2006–09 34
Figure 10: % of each demographic group using home delivery in the past 12 months 2006–09 35
Figure 11: Demographic profile of home delivery customer 2009 36
Figure 12: Home delivery household penetration % by working status and income group 2009 37
Figure 13: Home delivery household penetration % by ACORN group 2009 38
Figure 14: Users of home delivery – penetration by size of household 2007–09 39
Figure 15: Users of home delivery – penetration by type of household 2007–09 40
Figure 16: % of daily newspaper readers using home delivery 2009 42
Figure 17: % of Sunday newspaper readers using home delivery 2009 44
Figure 18: Average number of home deliveries per year by sector 2007–09 46
Figure 19: Frequency of home deliveries by sector 2009 48
Figure 20: Top 20 retailers – % of home delivery users mentioning 2008 & 2009 49
Figure 21: Retailers used for home delivery – percentage point change 2009 on 2008 51
Figure 22: Top reasons for home delivery 2007–09 52
Figure 23: Ordering media for home delivery 2006–09 53
Figure 24: Level of consumer satisfaction/dissatisfaction across all delivery criteria 2006–09 56
Figure 25: Attitudes towards pricing and delivery 2009 60
Figure 26: If delivery could not be made to your home, where would you like it to go? 2006–09 61
Figure 27: Books home delivery shopper base 2006–09 62
Figure 28: Books home delivery penetration % of income groups 2009 63
Figure 29: Books home delivery penetration % of ACORN groups 2009 64
Figure 30: Books profile of home delivery customer base 2009 65
Figure 31: Books home delivery household profile by lifestage 2009 67
Figure 32: Books leading reasons for using home delivery 2009 68
Figure 33: Books ordering media used for home delivery 2009 69
Figure 34: Books leading retailers used for home delivery 2009 70
Figure 35: Clothing & footwear home delivery shopper base 2006–09 71
Figure 36: Clothing & footwear home delivery penetration % of income groups 2009 72
Figure 37: Clothing & footwear home delivery penetration % of ACORN groups 2009 73
Figure 38: Clothing & footwear profile of home delivery customer base 2009 74
Figure 39: Clothing & footwear home delivery household profile by lifestage 2009 76
Figure 40: Clothing & footwear leading reasons for using home delivery 2009 77
Figure 41: Clothing & footwear ordering media used for home delivery 2009 78
Figure 42: Clothing & footwear leading retailers used for home delivery 2009 79
Figure 43: DIY & gardening home delivery shopper base 2006–09 80
Figure 44: DIY & gardening home delivery penetration % of income groups 2009 81
Figure 45: DIY & gardening home delivery penetration % of ACORN groups 2009 82
Figure 46: DIY & gardening profile of home delivery customer base 2009 83
Figure 47: DIY & gardening home delivery household profile by lifestage 2009 85
Figure 48: DIY & gardening leading reasons for using home delivery 2009 86
Figure 49: DIY & gardening ordering media used for home delivery 2009 87
Figure 50: DIY & gardening leading retailers used for home delivery 2009 88
Figure 51: Electricals home delivery shopper base 2006–09 89
Figure 52: Electricals home delivery penetration % of income groups 2009 90
Figure 53: Electricals home delivery penetration % of ACORN groups 2009 91
Figure 54: Electricals profile of home delivery customer base 2009 92
Figure 55: Electricals home delivery household profile by lifestage 2009 94
Figure 56: Electricals leading reasons for using home delivery 2009 95
Figure 57: Electricals ordering media used for home delivery 2009 96
Figure 58: Electricals leading retailers used for home delivery 2009 97
Figure 59: Food & grocery home delivery shopper base 2006–09 98
Figure 60: Food & grocery home delivery penetration % of income groups 2009 99
Figure 61: Food & grocery home delivery penetration % of ACORN groups 2009 100
Figure 62: Food & grocery profile of home delivery customer base 2009 101
Figure 63: Food & grocery home delivery household profile by lifestage 2009 103
Figure 64: Food & grocery leading reasons for using home delivery 2009 104
Figure 65: Food & grocery ordering media used for home delivery 2009 105
Figure 66: Food & grocery leading retailers used for home delivery 2009 106
Figure 67: Furniture & floorcoverings home delivery shopper base 2006–09 107
Figure 68: Furniture & floorcoverings home delivery penetration % of income groups 2009 108
Figure 69: Furniture & floorcoverings home delivery penetration % of ACORN groups 2009 109
Figure 70: Furniture & floorcoverings profile of home delivery customer base 2009 110
Figure 71: Furniture & floorcoverings home delivery household profile by lifestage 2009 112
Figure 72: Furniture & floorcoverings leading reasons for using home delivery 2009 113
Figure 73: Furniture & floorcoverings ordering media used for home delivery 2009 114
Figure 74: Furniture & floorcoverings leading retailers used for home delivery 2009 115
Figure 75: Gifts home delivery shopper base 2006–09 116
Figure 76: Gifts home delivery penetration % of income groups 2009 117
Figure 77: Gifts home delivery penetration % of ACORN groups 2009 118
Figure 78: Gifts profile of home delivery customer base 2009 119
Figure 79: Gifts home delivery household profile by lifestage 2009 121
Figure 80: Gifts leading reasons for using home delivery 2009 122
Figure 81: Gifts ordering media used for home delivery 2009 123
Figure 82: Gifts leading retailers used for home delivery 2009 124
Figure 83: Health & beauty home delivery shopper base 2006–09 125
Figure 84: Health & beauty home delivery penetration % of income groups 2009 126
Figure 85: Health & beauty home delivery penetration % of ACORN groups 2009 127
Figure 86: Health & beauty profile of home delivery customer base 2009 128
Figure 87: Health & beauty home delivery household profile by lifestage 2009 130
Figure 88: Health & beauty leading reasons for using home delivery 2009 131
Figure 89: Health & beauty ordering media used for home delivery 2009 132
Figure 90: Health & beauty leading retailers used for home delivery 2009 133
Figure 91: Homewares home delivery shopper base 2006–09 134
Figure 92: Homewares home delivery penetration % of income groups 2009 135
Figure 93: Homewares home delivery penetration % of ACORN groups 2009 136
Figure 94: Homewares profile of home delivery customer base 2009 137
Figure 95: Homewares home delivery household profile by lifestage 2009 139
Figure 96: Homewares leading reasons for using home delivery 2009 140
Figure 97: Homewares ordering media used for home delivery 2009 141
Figure 98: Homewares leading retailers used for home delivery 2009 142
Figure 99: Music & video home delivery shopper base 2006–09 143
Figure 100: Music & video home delivery penetration % of income groups 2009 144
Figure 101: Music & video home delivery penetration % of ACORN groups 2009 145
Figure 102: Music & video profile of home delivery customer base 2009 146
Figure 103: Music & video home delivery household profile by lifestage 2009 148
Figure 104: Music & video leading reasons for using home delivery 2009 149
Figure 105: Music & video ordering media used for home delivery 2009 150
Figure 106: Music & video leading retailers used for home delivery 2009 151
Figure 107: Key issues in the home delivery & fulfilment market 2011 152
Figure 108: Satisfaction with elements of the delivery process 2008 and 2009 153
TABLE OF TABLES
Table 1: Consumer spend on goods sent by home delivery 2000–10e 22
Table 2: Home delivery channels 2000–10e 23
Table 3: Home delivery market spending by sector 2005–10e 30
Table 4: Growth rates by sector 2005–10e 31
Table 5: Home delivery shares of sector spending 2005–10e 32
Table 6: Home delivery shopper base and penetration by sector 2009 41
Table 7: Daily newspapers read by home delivery customers 2009 43
Table 8: Sunday newspapers read by home delivery customers 2009 45
Table 9: Reasons for choosing order method 2009 54
Table 10: Popularity of ordering methods for home/work delivery by sector 2009 55
Table 11: Satisfaction with elements of delivery process 2009 on 2008 57
Table 12: Satisfaction by ordering method 2009 58
Table 13: What would make you more likely to use home delivery? 2009 59
Table 14: Books regional profile of home delivery shoppers 2009 66
Table 15: Clothing & footwear regional profile of home delivery shoppers 2009 75
Table 16: DIY & gardening regional profile of home delivery shoppers 2009 84
Table 17: Electricals regional profile of home delivery shoppers 2009 93
Table 18: Food & grocery regional profile of home delivery shoppers 2009 102
Table 19: Furniture & floorcoverings regional profile of home delivery shoppers 2009 111
Table 20: Gifts regional profile of home delivery shoppers 2009 120
Table 21: Health & beauty regional profile of home delivery shoppers 2009 129
Table 22: Homewares regional profile of home delivery shoppers 2009 138
Table 23: Music & video regional profile of home delivery shoppers 2009 147
Table 24: Fulfilment problems, solutions and implications 2010 156
Table 25: Fulfilment operator service proposition summary 2010 157
Table 26: Fulfilment operator service proposition summary 2010 (continued) 158
Table 27: GSI Commerce company overview 2010 159
Table 28: iForce company overview 2010 161
Table 29: MetaPack company overview 2010 163
Table 30: City Link company overview 2010 165
Table 31: DPD (GeoPost) company overview 2010 167
Table 32: Nightfreight company overview 2010 169
Table 33: Royal Mail/Parcelforce company overview 2010 171
Table 34: UK Mail Group company overview 2010 173
Table 35: Hermes company overview 2010 175
Table 36: Sprint Deliveries GB company overview 2010 177
Table 37: Yodel company overview 2010 178
Table 38: Clipper Logistics company overview 2010 180
Table 39: Unipart Logistics company overview 2010 181
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