UK consumers prefer free over fast delivery

1 August 2017

There is a mismatch between what retailers and consumers perceive as a preferred shipping option, according to a report.

Shipping platform firm Temando’s latest annual State of Shipping in Commerce report found that while retailers believed that free and fast delivery are equally valued by consumers, with retailers citing 43% and 57% respectively, the reality is that 86% of UK shoppers prefer free shipping.

The report, which surveyed 275 retailers and 1298 online shoppers in the UK, said 58% of shoppers would shop online more if free shipping was offered, while 54% would consider increasing their basket size to qualify for free fast delivery in one to three hours.

However, while some retailers (27%) indicated that they were responding to customer demands with free standard shipping every day, only 32% said they offered free shipping with a minimum spend and only 11% gave free shipping to new customers.

The report added that 58% of shoppers would desert their cart and buy from a competitor if a premium day service they were seeking was not provided.

Almost a quarter of retailers said they did not use free shipping as a promotional tool.

Carl Hartmann, co-founder and CEO of Temando, said UK consumers could be reacting to uncertainty after Britain’s decision to leave the European Union. 

“Recent upheavals in the local market such as the uncertainty of Brexit may have impacted the buying behaviour of consumers, who we see to be far more conservative than their American counterparts when it comes to how much they’re willing to part with for Prime-like shipping services,” he said. 

“Consumers are pushing for ultimate value with almost 60% indicating they’ll abandon their cart due to high shipping costs.

“Rather than offering a single, generic shipping option, retailers need to map their delivery experiences to the lifestyle of today’s customers.”

The report also found that although 60% of enterprise retailers are focused on expanding into new markets with international shipping, a third struggled with the complexity, while 56% of mid-market retailers struggled with the accuracy of international shipping costs. 

Hartmann said retailers needed to shake off old habits to compete and grow their market share in evolving times.

“The rise in international shipping reflects the borderless nature of e-commerce,” he said.

“No longer are shoppers tied to spending their dollars at a small selection of stores, they can easily access the endless aisles of global sites with a few clicks—with some offering a more superior shipping experience at a better price compared to what local retailers can offer.”

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