Delivering victory: Is growth sustainable?

David Jinks, head of consumer research at Parcel Hero

How many home deliveries are expected this Christmas and can the parcels network cope?

Let’s have a look at this extraordinary year. In May, at the peak of the first lockdown, online sales grabbed 33.4% of the entire UK retail market; 87.1% of all businesses were trading online. In September, as we enjoyed what turned out to be the calm before the second storm, e-commerce sales were still 53% up on the same month in 2019.

That’s a big increase, to put it mildly. To place it in context, last year parcel volumes reached a total of 2.4 billion items, an 11% increase on the previous year. As an industry, we patted ourselves on the back for coping with such a steep rise in deliveries. Now we are looking at a 53% boom in orders. Is that viable as we head into the Christmas peak? You can sense why, suddenly, deliveries are news.

Let’s look into the future, however, in a year or so, lockdowns are over, we’ve all had the jab and 2020 is beginning to seem a bit like a bizarre dream. Did that really happen? we’ll all be beginning to ask ourselves.

Do we think at this happy point in the future, home delivery volumes will have dropped back to pre-pandemic levels and 2020 will have proved to be an e-commerce bubble, to be followed by business as usual? I don’t think so. The genie is out of the bottle.

Everyone has had a taste of how easy, relaxed and swift ordering online is.

Younger shoppers have already grown used to more frequent food deliveries, freeing up time to do more interesting things.

Older people, who were once wary of using the internet, have grown far more comfortable with online shopping. The rise of the ‘silver surfer’ has been one of the phenomena of lockdown, and the convenience of home shopping means they are not about to give it up in a hurry.

Back in 2017 Parcel Hero issued a report called ‘2030: The Death of the High Street’. It was pretty apocalyptic and was even discussed in Parliament. The report predicted that, by the end of this decade, half of all existing retail stores will have vanished and 40% of all retail sales will be online.

Worst hit would be department stores and high street fashion and footwear shops. Look at the struggles of Debenhams and the fate of Laura Ashley, Oasis, Warehouse, and Kath Kidston this year, all of which fell into receivership, and our forecast is already coming true. 

The pandemic hasn’t created a completely unexpected and unforeseeable change in the shopping habits of the nation. It has simply hastened the inevitable.