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Retailers should embrace delivery subscriptions to avoid losing market share

More retailers need to embrace the delivery subscription model if they are to avoid losing market share, according to new research from data and analytics specialist GlobalData.

In the company’s Delivery Saver Schemes in the UK- 2017 report, research showed that 22.2% of online shoppers are subscribed to a non-food delivery saver scheme and 29.0% are subscribed to a food and grocery delivery saver scheme. The most popular schemes offered by retailers are Amazon Prime and the Tesco delivery saver.

Although Amazon Prime leads the way a number of retailers have followed the leader with delivery schemes from other pureplays including ASOS and boohoo.com.

Online shoppers were asked who they would like to introduce a delivery saver scheme, with Argos, Marks & Spencer, John Lewis, Boots and Debenhams cited as the top five.

Charlotte Pearce, retail analyst at GlobalData, said such delivery schemes were particularly relevant for the department store and fashion sectors. “As department stores and leading clothing and footwear retailers in particular have such a wide range of products available online, a delivery saver scheme can offer consumers value for money as after a few orders, subscribers have effectively made their money back on the equivalent cost of deliveries.’’

But she said that retailers should trial such an offering first to ensure it works for them. “Retailers considering a scheme must trial this with a select shopper base to gauge customer reaction, uptake and order frequency before rolling this out on a wider scale. This way, retailers can weigh up whether the investment would be worthwhile and understand its long-term profitability.”

Retailers including Next and New Look have also introduced such schemes recently and Pearce said she expects more to follow their lead: ‘‘As other retailers start to trial and invest in these schemes, we expect to see a much higher uptake. These schemes offer retailers a way to harness shopper loyalty and drive online sales to protect market shares in a challenging retail environment. The benefits of these schemes are clear – they encourage subscribers to shop more frequently with the retailer, resulting in higher annual spend, thus leading to growth in online sales.”

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