Although Covid 19 caused a steep growth spike within the e-commerce sales globally, we believe that the trend of online shopping is here to stay. In this day and age, online retailors are able to capitalize on opportunities more than ever before, with the UK market being no exception. In fact, the UK market in particular has presented a plethora of opportunities for e-commerce sellers however, understanding how to take advantage of these opportunities can be fairly difficult. Exelot specifically has identified struggles surrounding exportation, specifically within new entities within the market.
How bright is the future for the UK e-commerce market? What should cross-border sellers do to prepare for the big VAT reform? In view of the new EU VAT rules, which came into effect on January 1, 2022, how will the UK market continue to operate?
This article focuses on UK consumers’ payment habits, logistics preferences, and mobile buying trends, helping to understand the UK’s market and how to operate effectively within it.
In 2019, PayPal was the most common online payment method in the UK. According to the results of Attest’s 2019 survey, 49% of shoppers used their PayPal accounts to pay for their online purchases, while 37% preferred to pay with a credit or debit card.
In terms of logistical options, UK consumers are more likely to have their parcels delivered to their homes, followed by postal delivery to their mailboxes or multi-person mailboxes and finally via delivery to their workplace. Having said this, among the innovative delivery methods, UK consumers have the most confidence in unattended delivery processes (where customers collect their packages from designated pickup points). This means that within the near future there could be a shift within the regular patterns.
Recent research carried out by Brightpearl, a UK-based e-commerce cloud software provider, and Parcelhub, a logistics platform, shows that UK consumers are more likely to shop with retailers that offer next-day delivery and free shipping. Indeed, 45% of British consumers choose sellers who offer next day delivery and 11% even specify that they want their orders delivered for free on the same or next day. In the absence of such a service, British citizens prefer to order items with the promise of free delivery or free two-day shipping, with more than one in five (22%) requesting the “two-day delivery and pickup” option.
In the Brightpearl and Parcelhub survey, 58% of British consumers said they would not only be willing to wait longer to receive their goods if the merchant offered free delivery, but they would also spend more money on their website. Not only that, but 40% of consumers would even be prepared to wait up to a week in order to benefit from free delivery.
Amazon UK recently introduced a new feature for sellers – “holiday settings” – whereby public holidays are not counted as working days and therefore not counted in the shipping and delivery times. In other words, if a delivery date coincides with a public holiday, sellers can postpone the shipment until the next business day.
When it comes to logistics and delivery, most UK consumers want to be kept updated on the entire delivery progress, from shipping and receiving items to returns. Furthermore, they have strict requirements for on-time delivery. If the shipping email says the item will be delivered at 9 a.m. and the buyer does not receive the item until 5 p.m., they are likely to complain about the merchant, weather this be publicly (twitter) or privately (customer service).
In the UK, most e-commerce consumers make purchases using their mobile devices. The year 2020 saw the biggest annual growth spurt by far in mobile shopping, with consumers spending a total of 82 billion hours on shopping apps, a 30% increase on 2019.
The popularity of online shopping applications in the UK skyrocketed including Amazon who were up 55% year-on-year, Tesco Groceries up 150% year-on-year, and SHEIN up 490% year-on-year. More and more shoppers are using their mobile devices to complete daily tasks, including checking emails and paying bills. Shopping with smartphones in the UK has become more convenient and the shopping experience today is more enjoyable and straightforward, especially when using the “buy now” button on shopping apps and social media platforms.
As many as 59% of consumers surveyed by Google said that the ability to use a mobile device for making online purchases is critical when deciding which brand to buy or which retailer to choose. According to Statista, mobile commerce will surpass other digital businesses by 2021.
The wealth of opportunities for cross-border e-commerce sellers stands out and it is clear from British consumer habits that they attach great importance to logistics and transport services. Especially in terms of speedy arrival and last-mile delivery. Thus, the choice of an efficient and professional logistics channel is also a key point in encouraging British consumers to repurchase.