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Latest research from market analyst Mintel reveals that the courier and express delivery market witnessed a steep £1 billion increase in sales in 2016, with the UK spending as much as £10.1 billion on these services.

Overall, 2.8 billion packages and parcels were delivered in 2016, with the number growing by 65 per cent in four years, up from 1.7 billion in 2012. And while the number of items delivered has soared, this has driven a boom in the value of the courier and express delivery market, increasing by 63 per cent from £6.2 billion in 2012 to £10.1 billion in 2016.

And while value sales grew by a speedy 11 per cent in the last year alone, in 2017 sales are expected to reach £10.8 billion. What is more, the market is forecast to grow by 22 per cent to reach £13.2 billion in 2021, with market volumes expected to increase by 33 per cent to reach four billion packages in the same time period.

British online retail sales are expected to grow by 55.3 per cent over this same five year period to reach £81.94 billion, enforcing the mutual dependence of these two trajectories.

Overall, almost nine in 10 (87 per cent) Brits have sent or received a parcel in the last 6 months.

“The crux of the recent surge in courier and express delivery services surrounds the ongoing digitalisation of all consumer behaviour, in which e-commerce is the apex. As online channels continue to increase their grip across retailing, the industry is only expected to grow further as supply strives to match surging demand,” says Marco Amasanti, business-to-business analyst at Mintel.

Convenience, in particular the importance of saving time, has become key to consumer demand.

He continues: “Money previously spent in retail stores is now increasingly spent online, boosting business-to-consumer delivery demand not only through the initial purchase, but also through the return of goods bought online. The business-to-consumer sector, underlined by the rise in e-commerce will be key to future growth.”

When it comes to delivery, growth has been also driven in the market due to consumers wanting their parcels and packages as soon as they have been ordered. The value of next day deliveries reached £5.5 billion in 2016, up from £3.1 billion in 2012. While same day deliveries have risen from £488 million in 2012 to £1 billion in 2016.

Furthermore, proving speed is of the essence, the number one issue for users of courier services is a long waiting time for parcels to be delivered. One in six (15 per cent) users have had to wait a long time for a parcel to be delivered in the past six months, rising to 30 per cent of those aged 16-24.

“Convenience, in particular the importance of saving time, has become key to consumer demand. It is clear that demand for convenient time windows is significantly more prevalent among younger Brits. Convenience has gradually pervaded these generations, and established itself as a norm and benchmark in the market. Operators that target a younger market must acknowledge these growing expectations, and shift focus onto customer service accordingly,” says Amasati.

Finally, while a long wait time tops consumer dissatisfaction with the courier market place, this is closely followed by a parcel being left in an unsafe place (13 per cent) and the parcel not being delivered in the agreed delivery slot (11 per cent). One in 10 users has experienced a parcel being lost in the post, while slightly less have suffered damage to the contents of the parcel.

Around six in 10 (59 per cent) users of couriers have not experienced issues with parcels and delivery services in the last 6 months.

This story first appeared on WWB online.

 


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