Share of online retail orders going to EU at four-year high
Online retail delivery order volumes were up +16.5% year-on-year in July, according to the latest data from the IMRG MetaPack UK Delivery Index. The growth in volume of parcels outstripped online retail sales revenue growth in July (which was up +11%[1]), suggesting that discounting during the summer sales period may have accounted for a significant portion of those sales.
It was also around this time a year ago that the early impacts of the Brexit decision were starting to be recorded, in relation to the sudden drop in the value of sterling. From an online retail perspective, this drove a notable increase in the percentage of orders going to international destinations. In July 2015, for example, 24.4% of all Delivery Index volumes were going cross-border; in July 2016 it was 26.6% and July this year it reached 29.6%.
Of that volume going cross-border, the share going to EU destinations reached a four-year high in July 2017. Generally speaking, the split between EU and non-EU destinations has tended to be fairly even over the lifetime of the Delivery Index (which launched in 2011), but last month it reached 62.7%. In July last year, the percentage going to the EU was 55.3%.
Chris Hoskin, head of marketing, MetaPack, said:
“We can see a consistent rise in cross border orders which over the last three months have all been over 60% of the total. Whilst we could assume that this is to do with Sterling and the beneficial prices that overseas consumers are enjoying, we believe it is also part of a wider trend. As long as UK retailers can offer quality products with great delivery options at good prices, overseas customers are happy to make their purchases, and we have every reason to believe this will continue even once the UK is out of the EU.”
Andrew Starkey, head of e-Logistics, IMRG, said:
“The established trend up until 2015 was for a month-on-month rise between June and July in the Delivery index, but last year this line flattened out and in July 2017 we saw a monthly dip of -2.6%. Last year was an exceptional time of course, being the month directly following the Brexit referendum, and July this year followed an exceptionally warm June that brought heatwaves, but it may be that we are also starting to record some impact of the establishment of Amazon Prime Day as a major sales event – the Delivery Index does not include marketplace orders so some of the volume may be shifting over in connection with Prime Day.”