Despite its relatively small size, the UK is one of the biggest e-commerce players in the world. In terms of annual online sales, we are in third place globally, behind giants China and US, and a long way ahead of the rest of the pack. At over thirty percent, the proportion of our total retail sales conducted online, is one of the highest.
Last month UKWA hosted a conference panel at the Multimodal exhibition, exploring this phenomenon. We asked Tienne Oates, Home Delivery Analyst at B&Q, Dionne Redpath, Chief Operating Officer at Europa Worldwide Group and Josh Arrowsmith, Head of Commercial & Innovation at The Finishing Line, to share their insights on how the UK has become an e-commerce leader.
All agreed that innovation is key. Brexit, Covid and other global challenges have forced retailers to look for new ways to reach customers and boost sales, turning to their supply chain partners to give them a competitive edge. By holding inventory, assembling to order, picking and packing, then shipping directly to doorsteps, fulfilment centres enable retailers to achieve fast and accurate delivery to end users.
To meet ever higher customer expectations, 3PLs like Europa have invested in technology and automation, to scale up, simplify and optimise performance. As Dionne said, ‘Supply chains are constantly under scrutiny.
If a warehouse fails, a sale could be lost. If you miss a beat, there’s a backlash’.
Although the online shopping boom has fallen back, retailers have continued to innovate, adding bricks and mortar stores – ‘real world’ retail – to the mix, to create hybrid solutions that drive sales.
B&Q, for example, has launched B&Q Local. These small high street stores enable customers to access everything held by the big B&Q sheds, and place orders either in-store or online for home delivery or to click & collect from store.
Tienne told us that customer loyalty has played a significant role in driving footfall too. B&Q’s TradePoint provides a dedicated service for its trade customers, who benefit from a loyalty discount scheme both in store and online. In FY22/23, TradePoint accounted for 22% of B&Q’s sales, growing 31.5% over the past three years.
Click & Collect is a crucial part of this hybrid model. Orders placed online are delivered to store, where customers can try on, touch or check before they buy. Unwanted items can be returned immediately, improving the customer experience and expediting the return to saleable stock. Meantime, the instore sales team have a chance to build relationships and upsell.
There are several reasons why the UK has become a leader in e-commerce. Partly it’s because we are good at getting products to customers; ours is a small island with a relatively small population and well connected infrastructure. We are early adopters of technology, at the forefront of delivering excellent user experience, whether from basket to doorstep – or to store. Above all, retailers and warehouse operators innovate together. As Josh put it, warehouse operators in the UK have made the transition from being simply service providers to retailers’ strategic partners – pooling ideas and sharing technology. That’s a world-beating success!
Clare Bottle
UKWA, CEO
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