International growth will mean UK online parcels will hit 2.2 billion by 2017
LONDON, 01 May, 2013
The total number of parcels and packages created by online purchases (excluding 2-man and groceries) is forecast to reach almost 2.2 billion by 2017, according to a report by IMRG and Manhattan Associates.
- Parcel movements generated by online orders to rise 70% by 2017
- Much of the projected increase to be driven by international online sales growth
- Survey found 72% of retailers already shipping internationally
IMRG estimate that the total volume of order movements generated by UK retailers and consumers in 2012 was 1.3 billion . This includes parcels and packages returned to retailers, based upon an industry average return rate of 22%.
With cross-border trade set to greatly increase over the coming years, the joint report looks at the challenges of fulfilling this increasing volume of orders from consumers across Europe and the rest of the world.
From the consumer’s perspective, these challenges are largely around confidence in the fulfilment of their orders, particularly following the horsemeat scandal that has instilled a very negative image of the international supply chain in the mind of the public. From the retailer’s perspective, it is possible to fulfil cross-border orders through the standard supply chain without really knowing what sort of service they will be providing. This is fine up to a point, but if that retailer starts to see volumes increase or makes a conscious decision to expand into another region, then a real requirement emerges for taking a strategic approach to structuring the supply chain in order to reduce inefficiencies and increase profit and customer experience.
Once this decision has been reached, the challenges are around perception of the brand and identifying the right market, reducing double shipping, streamlining quality control, in addition to managing both remote and local stock and returns.
Cross-border is a growing market; in March 2013, IMRG surveyed 46 senior e-commerce professionals (heads of e-commerce, CEOs, managing directors and marketing directors) in order to get a snapshot of retailers’ expectations for growth this year. This found that whilst 72% already ship internationally, the majority currently ship less than 10% of their total online sales to overseas destinations.
Andy Mulcahy, Head of Communications at IMRG: “The volumes of parcels and packages from UK online retail is forecast to continue to grow rapidly over the next few years, and we further anticipate that by 2020 around one-third of online orders will be going cross-border in Europe. The UK’s online fulfilment infrastructure was initially set up to be very UK-centric, focusing on getting orders into the hands of domestic customers. As cross-border activity increases over the coming decade, with it will come a big shift in how stock is stored, managed, controlled and monitored to serve the requirements of the global consumer audience.”
Craig Sears-Black, Managing Director at Manhattan Associates:
“The growth opportunity from selling products overseas and the ability to drive down supply chain cost through a more flexible sourcing strategy are both very real for enlightened retailers.”
“Introducing system-enabled best practice to their international operations allows retailers to create an agile and efficient supply chain that drives revenue and maximises margins for cross-border selling.”
To find out more about this report, contact:
IMRG (Interactive Media in Retail Group) is the UK’s industry association for e-retail. Formed in 1990, IMRG is setting and maintaining pragmatic and robust e-retail standards to enable fast-track industry growth, and facilitates its community of members with practical help, information, tools, guidance and networking. The strength of IMRG is the collective and cooperative power of its members. For more information please visit http://www.imrg.org or email firstname.lastname@example.org.