Online home deliveries will add £20bn to UK market by 2025

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The rapid increase in online home deliveries driven by the pandemic will add £19.6 billion to the UK economy by 2025, according to new research from Metapack in partnership with Retail Economics.

A new wave of ‘digital shifters’ is expected to drive an additional £22.4 billion in online sales, compared to a scenario where the pandemic had no impact on shopping behaviours. This acceleration is projected to lead to £19.6 billion of additional sales from home deliveries alone by 2025.

The report reveals that online spend is expected to account for 49.7% of total non-food sales by 2025 amid persistent home working. Some 27.3% of consumers expect to permanently shift more of their shopping online, a result of new lifestyle habits formed since the pandemic.

Apparel, homeware, health and beauty are the categories expected to see a greater permanent shift online.

This will mean that 35.8% of UK consumers expect to visit physical stores less in the future, a figure echoed by 28.7% of US consumers, 20.8% of German consumers and 17.2% of French consumers.

Some 50.6% of those who worked from home during the pandemic also expect to shop online more permanently, compared to 27.1% of those who did not. While 37.5% of ‘digital shifters’ value speed ahead of the convenience, cost and carbon footprint of deliveries.

READ MORE: Aldi ditches Deliveroo: have shoppers had enough of rapid grocery delivery?

“Driven by the pandemic, online consumer shopping expectations have changed significantly over the last few years, and a lot of these changes are here to stay,” said Metapack’s vice president of global product Duncan Licences.

“It is expected that, as home working becomes the norm for more and more people, their appetite for fast, convenient, and easy deliveries that fit their lifestyle will continue to increase.

“Retailers have reached a crossroads, they need to diversify their delivery options and invest in the right infrastructure and technology to meet the new needs of their consumers, or they will struggle to compete… The retail industry has evolved beyond bricks and mortar, it’s time to step into the age of ecommerce.”

Retail Economics chief executive Richard Lim added: “A permanent shift in consumer behaviour and vast investment across the ecommerce ecosystem has accelerated the shift to online. Structural changes in the labour market, with persistently higher levels of home working across households, has unlocked greater demand for home deliveries.

“Although the demand for speed will put pressure on supply chains, home workers have both a greater ability and greater willingness to pay for delivery and returns compared to average online shoppers, which is critical for profitability amid rising costs and elevated customer expectations.”

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