Free delivery is predicted to increase as retailers compete for online sales – while spending on logistics will increase by a third over the next five years, according to a survey of retailers by law firm TLT.
The survey found that 73 per cent of retailers expect more companies to offer free delivery. Spending on logistics would increase from nine per cent of turnover to 12 per cent.
However, 33 per cent of retailers said free delivery is becoming increasingly difficult for them to offer. The report said that retailers that don’t charge for delivery would have to find efficiencies elsewhere, while those that do will need to offer consumers value in a different ways – such as branding or product quality.
The survey found that 62 per cent of retailers already offer next day delivery (or faster) and this is set to rise to 83 per cent in the near term.
Some 19 per cent currently offer same day delivery and this is expected to rise to 29 per cent in the coming years.
The increase in returns is a major driver of investment in logistics. The average proportion of returns is now 27 per cent, according to the retailers surveyed. However, in some sectors returns can be 58 per cent. For others, the proportion can be as low a two per cent.