Weather disrupts online delivery but not the forecast growth in online volume
Online retail delivery order volumes were up +7% year-on-year in February, according to the latest data from the IMRG MetaPack UK Delivery Index. A month-on-month drop from January in terms of volume is expected, though the rate of decline (-21%) was sharper than has been typical over recent years. This month-on-month drop is likely highlighted by the strong performance last month, when January online order volumes were at their highest since 2013.
There were two notable trends recorded in the February data. The first concerned the kind of delivery service options used; over the past two years, the number of retailers promoting next-day delivery prominently has risen, meaning more shoppers are using these fulfilment options. The split of economy (2-3 days and over) and next-day varies at different times of year, but February 2018 saw the largest percentage of orders using next-day for the month of February in six years.
The second, most probably related result was an unseasonal decline in the percentage of orders arriving on-time. While a dip over the Christmas trading peak is expected, as volumes are so much higher and the network comes under greater pressure, the index typically records a recovery in the on-time rate in January and February. However, in February it fell away again with just under 88% arriving on time versus 90% in January – which was certainly influenced by the heavy snow fall across the country.
Andrew Starkey, head of e-Logistics, IMRG, said:
“The huge surge in online retail orders placed in January, when online appeared to benefit from footfall to high streets hitting a five-year January low, appears to have flowed through to lower February volumes. The retail landscape was looking pretty bleak toward the end of 2018 due to the continuing squeeze on shopper spend, but inflation eased in February so people may start to feel a bit more confident in terms of how they use their discretionary spend. The extreme weather conditions experienced in February have clouded start of year performance trends so it is difficult to predict the outlook for online retail overall at the moment.”
Maria Dahlqvist Canton, global marketing director, MetaPack, said:
“The other significant finding from this month’s Index is that cross-border volumes and order values remain strong, especially for EU destinations. This reflects the volume increases that we saw throughout last year, and we fully expect it to continue unless there is a change in exchange rates, in which case experience tells us that cross-border orders will fluctuate.”