www.imrg.org IMRG MetaPack UK Delivery Index Report September 2012 The IMRG MetaPack UK Delivery Index has been designed to enable the e-retail industry to track a range of key benchmark metrics for the first time including parcel volumes, order values, delivery services employed and destinations served. The data is derived from dispatches from more than 220 retailers and represents more than 3.5 million orders in any single month. The September IMRG MetaPack UK Delivery Index covers the period to the end of August 2012
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IMRG MetaPack UK Delivery Index Report
September 2012
The IMRG MetaPack UK Delivery Index has been designed to enable the e-retail industry to track a range of key benchmark metrics for the first time including parcel volumes, order values, delivery services employed and destinations served. The data is derived from dispatches from more than 220 retailers and represents more than 3.5 million orders in any single month.
The September IMRG MetaPack UK Delivery Index covers the period to the end of August 2012
3. Volume Index ..................................................................................................................................................................................... 4
4. Service Analysis – Percentage of Total Volume ......................................................................................................... 6
5. Destination Analysis – Percentage of Total Volume ................................................................................................ 8
6. Quality of Service ............................................................................................................................................................................. 9
7. Order Value ........................................................................................................................................................................................ 12
About the Authors ......................................................................................................................................................................... 14
Andrew Starkey .............................................................................................................................................................................. 14
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1. Introduction
Welcome to the IMRG MetaPack UK Delivery Index produced in partnership with MetaPack, the delivery management specialist. The UK Delivery Index is designed to enable the e-retail industry to track a range of key benchmark metrics for the first time including parcel volumes, order values, delivery services employed and destinations served. We believe this will help retailers and carriers to monitor the development of e-logistics in the UK and identify areas for growth and improvement. The information presented is aggregated from MetaPack’s extensive dataset so all retailers, carriers and other suppliers remain completely anonymous. While it is not possible to confirm whether the data is entirely representative of all retail sectors, by covering more than 220 retailers and 3.5 million orders in any one month, we consider it to be a valid and highly reliable source. The analysis offered is derived from this data and can be referenced against other IMRG information sources, notably the IMRG Capgemini e-Retail Sales Index, IMRG’s e-Logistics reports and surveys and IMRG’s Knowledge Base, imrsmart, all of which are available to IMRG members at www.imrg.org. More detailed delivery data may be available from MetaPack at its discretion by contacting Richard Rangel, Business Intelligence Analyst – [email protected]. We hope you will find this a useful resource and aid to operational and strategic decision-making. Andrew Starkey, Head of e-Logistics, IMRG & Shiran Liyanage, Head of Marketing, MetaPack
2. Executive Summary The IMRG MetaPack Delivery Index now contains data covering in excess of 48 million orders and 50 million packets and parcels over a period of 11 months. The last 4 months have suggested a slow but steady rise in volumes and a similar trend in the AOV (average order value) of ‘packet and parcel’ orders dispatched by UK retailers. This contrasts with the overall AOV including Grocery and 2 Man orders, perhaps indicating that consumers are buying fewer big ticket items at the moment? The proportion of cross-border volumes fell away only slightly during August, most likely due to the general holiday period on mainland Europe and we expect the upward trend that we have witnessed over recent months, to resume through to this years’ Christmas peak when it will tail off briefly once more. An encouraging conclusion from this months Delivery Index data is that despite fears over transport disruption during the Olympic and Para-Olympic programme, the sector appears to have maintained delivery performance on a par with other months and the proportion of deliveries into the main Olympic areas, has not dropped. This may be in part due to the apparent rise in the use of Next Day and Day Specified delivery services but we will continue to monitor this to see if a trend develops in then run up to this years’ Christmas peak. However regardless of this the rolling average for on time delivery now stands at 91.7% which means that more than 8 deliveries in every 100 fail to be delivered (or attempted) within the time frame expected by the customer. Taking account of the additional orders that are attempted on time but cannot be delivered at the first attempt, this figure rises to over 12 in ever 100. IMRG is now publishing the 4th in the series of the Valuing Home Delivery Review which puts the cost of failed on time / 1st time delivery in excess of £850 million a year.
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3. Volume Index The IMRG MetaPack UK Delivery Index uses the aggregated volumes from a defined set of more than 220 retailers to track the change in parcel and order volumes over time. No specific figures are provided but the dataset used is in excess of 3.5 million parcels in any one month and cumulatively exceeds 50 million parcels. The ‘foundation’ month is October 2011, setting the Index at 100 and the table below shows the Index over a rolling 6 month period.
Commentary The Volume Index for August is 8 points down on July, perhaps coinciding with the peak annual holiday period, both in the UK and increasingly importantly for UK retailers; in Europe. However for the past 4 months and notably through a summer that has included the Jubilee, the Olympics and the wettest summer weather in 100 years; the Volume Index has tracked above the foundation month of October. We are now within 2 months of being able to look at year on year data to see if this suggests a sustainable upward trend in volumes.
Comparisons with the IMRG Capgemini Retail Sales Index continue to show that, although not exactly aligned, the trends in Value and Volume track one another.
Retail Sales Index and Delivery Index Retail Sales Index and Delivery Index Retail Sales Index and Delivery Index Retail Sales Index and Delivery Index ----Month on Month trend comparisonMonth on Month trend comparisonMonth on Month trend comparisonMonth on Month trend comparison
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4. Service Analysis – Percentage of Total Volume
The service analysis section of the Index tracks the percentage of parcels and orders distributed by particular services and service types. MetaPack has provided data from more than of 220 retailers, using all of the major carriers and covering all the mainstream services seen below. This dataset represents in excess of 3.5 million orders in any one month and more than 48 million orders over the life of the Index to date.
Where necessary we have defined each of the services as follows:
• AM – Delivery before 12:00 • Economy – No assured delivery lead time, no specific delivery day or time-slot • Evening – Delivery after 17:00
• PM – Delivery after 12:00 • School Run – Delivery between 09:30 and 14:30 • Click and collect services cannot be specifically identified but are usually included within the next day category
• A number of parcels for Ireland are sent on a next day service. For the reporting purposes we can only apply one classification for that service, so Irish parcels sent on next day services have been classified as ‘next day’
• Services suggesting delivery by a specific time (e.g. before 10) are considered in the main to be ‘assured’ services (not necessarily carrying a guarantee of compensation should the delivery be after the specified time)
Commentary
The charts below show a slight increase in the use of Next Day and Time Specified services as a proportion of overall volumes and in comparison to Economy services, for the first time since March. At this stage we cannot say whether this is the start of a sustainable upward trend or driven by ‘events’ and offers but there does seem to be slight but discernible increase in the use of AM and PM time slot deliveries from when we started the Index.
Service Analysis Service Analysis Service Analysis Service Analysis ---- Percentage of Total Volume Percentage of Total Volume Percentage of Total Volume Percentage of Total Volume rolling 6 months to August 2012rolling 6 months to August 2012rolling 6 months to August 2012rolling 6 months to August 2012
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
50.00%
Service Type TrackerService Type TrackerService Type TrackerService Type TrackerEconomy
5. Destination Analysis – Percentage of Total Volume The destination analysis section of the Index tracks the percentage of parcels and orders distributed to the various regions of the UK, but also confirms the level of cross-border orders sent by the retailers represented. MetaPack has provided data from more than 220 retailers. Using all of the major carriers, this dataset represents in excess of 3.5 million orders in any one month and more than 48 million orders over the life of the Index to date. The proportion of orders being sent to international destinations may not be entirely representative of all sales because this figure may be influenced by a number of major retailers with proactive international strategies. In addition although all deliveries were dispatched from the UK, some of the orders may have originated from sources other than UK-only (.co.uk) websites, for example a retailer’s ‘global’ (.com) or 'in-country websites’ (.de etc.).
Commentary The upward trend in cross-border delivery has arrested slightly during August but this is almost certainly due to the general holiday period on mainland Europe. We expect to see the volume of international e-retail orders grow once again in the run up to the Christmas peak, probably dropping off again in November as concerns over extended delivery lead times focus consumers attention on domestic web sites. Perhaps surprisingly, London and the South East have maintained their share of volumes despite forecasts of transport disruption as a result of the Olympics and Para- Olympics. There had been concerns that anticipated logistics problems could have reduced consumer demand but it appears that the forward planning and hard work of retailers and their supply chain partners has maintained the share of the market in these regions.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Destination AnalysisDestination AnalysisDestination AnalysisDestination AnalysisPercentage of Total VolumePercentage of Total VolumePercentage of Total VolumePercentage of Total Volume
rolling 6 months to August 2012 rolling 6 months to August 2012 rolling 6 months to August 2012 rolling 6 months to August 2012
Mar-12 Apr-12 May-12
Jun-12 Jul-12 Aug-12
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6. Quality of Service The table below shows the percentage of orders delivered within the timescale specified and in accordance with the service selected for a rolling 6 month period. This analysis only applies to ‘tracked’ services and therefore cannot claim to cover the full volume (of in excess of 3.5 million orders in any one month or the cumulative volume of more than 48 million orders). Some of the orders in question may be bound for international destinations. For the purpose of the UK Delivery Index, ‘on time’ includes the following delivery events:
• Delivered within the timeframe specified • Customer pre-arranged to collect from post office or carrier’s depot • Delivery attempted within the time specified but customer no longer at the address provided • Delivery attempted within the time specified but refused by customer • Delivery attempted within the time specified but subsequently returned to sender • Delivery attempted within the time specified but no access to the recipient’s address • Order cancelled • Delivery arranged with customer (as in the case of an SMS alert where the customer chooses a different delivery day)
• Inaccurate address (a separate figure is shown in section 7.1) • Delivery attempted within the specified time but no-one available to receive the item – card left
In the case of the last event we acknowledge that to the consumer, this is a delivery failure but at this time we are currently unable to isolate the level of carded delivery from the data available. We can however show the percentage of total deliveries where a card was left that were outside of the specified delivery time, i.e. ‘carded late’. These are doubly inconvenient to the consumer.
As covered in section 5, it was feared that general transport disruption surrounding the Olympic programme would have a significant impact on the sectors ability to maintain delivery standards. However we can see from this months’ data that there has only been a slight fall in comparison with the peak performance achieved over the Christmas period.
Despite this relative good performance in August, concerns must remain that even allowing for ‘carded delivery’ and other possibly legitimate reasons for late delivery, over the period of the Index to date more than 8 deliveries in every 100 do not arrive when the consumer expects them (and this figure does not include those orders that could not be dispatched OTIF (On Time in Full)).
IMRG publishes this month, the 4th in the series of the Valuing Home Delivery Review which examines the cost of delivery failure for the three main stakeholders groups (Consumer, Retailers and Carriers), across six delivery scenarios. The overall conclusion is that the overall figure is in excess of £850 million each year and that for every 1% improvement in the quality of service figures shown in this index, the UK’s e-retail sector can recover £70 million of avoidable costs.
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6666.1 .1 .1 .1 AddressingAddressingAddressingAddressing As previously mentioned the UK Delivery Index provides specific data for the percentage of orders where delivery was affected because of a query on the address provided. The table below shows the detail for a rolling 6 month period.
Percentage On Time DeliveryPercentage On Time DeliveryPercentage On Time DeliveryPercentage On Time Delivery
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7.7.7.7. Average Average Average Average Order ValueOrder ValueOrder ValueOrder Value (AOV)(AOV)(AOV)(AOV) The tables below show the average value of orders included within the UK Delivery Index for a rolling 6 month period. This average value is lower than that shown in the IMRG Retail Sales Index (excluding travel and ticketing) because it has a lower proportion of ‘2 Man’ deliveries and no Grocery deliveries, both of which typically have a higher order value.
Average Order ValueAverage Order ValueAverage Order ValueAverage Order Value £47.04 £46.49 £48.16 £46.85 £48.61 £49.38
Commentary The rolling AOV average now stands at £48.14 and as the chart below indicates there appears to be a slow but steady rise in the AOV for packet and parcel orders.
Average Order ValueAverage Order ValueAverage Order ValueAverage Order Value
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In order to confirm the consistency of this data we have started to track the AOV trend for ‘packets and parcels’ against the AOV trend for orders including Grocery and ‘2Man’ deliveries1. We can see from the tables below that both the month on month trend and the AOV trend for each segment have been broadly consistent with the exception of the Christmas period where the AOV of ‘packet and parcel’ orders rose as the overall AOV, including Grocery and 2 Man orders fell – presumably reflecting on the focus on Christmas gift buying. This was the case perhaps until 3 months ago when we start to see a decline in the overall AOV against a slight increase in ‘packet and parcel’ order values. We will continue to monitor this trend but could speculate that this may be due to consumers purchasing fewer big ticket items such as furniture?
1 Derived from the IMRG Capgemini Retail Sales Index
Average OrderValue (includingGrocery and 2Man). Month onMonth
Average OrderValue (excluding 2Man and Grocery)Month on Month
RetailRetailRetailRetail Index and Delivery Index AOV Month Index and Delivery Index AOV Month Index and Delivery Index AOV Month Index and Delivery Index AOV Month
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About the AuthorsAbout the AuthorsAbout the AuthorsAbout the Authors IMRG IMRG (Interactive Media in Retail Group) is the UK’s industry association for e-retail. Formed in 1990, IMRG is setting and maintaining pragmatic and robust e-retail standards to enable fast-track industry growth, and facilitates its community of members with practical help, information, tools, guidance and networking. Consumers can be confident when dealing with IMRG Members because all interact in an environment where they are encouraged to operate using methods that are Honest, Decent, Legal, Truthful and Fair, and have undertaken to not bring the industry into disrepute. The strength of IMRG is the collective and cooperative power of its members. For more information please visit www.imrg.org or email [email protected].
MetaPack
MetaPack is arguably the leading provider globally of delivery management solutions with a worldwide reach providing e-retailers with a single point of integration to over 60 parcel carriers providing 1200 services. MetaPack enables cost reduction opportunities and the ability to offer comprehensive delivery options with a seamless tracking interface and email notification and SMS messaging for all shipments. MetaPack supports this service with extensive performance reporting. Customers include over 60 of the UK's top 100 retailers and hundreds of SMEs shipping over 85 million parcels a year. For more information please visit www.metapack.com or email [email protected]
Andrew Starkey Andrew is retained by IMRG as its Head of e-Logistics to run its e-retail Delivery and Logistics programme for the benefit of all IMRG members. He is also the founder of the strategic e-retail and postal consultancy Spiral4… and he has a unique background in the in the world of parcels, packets and postal logistics with over 30 years’ experience gained from the commercial sector and the regulatory environment. He is a member of the Chartered Institute of Logistics and Transport and the Institute of Direct Marketing and is a recognised expert on the UK postal and e-retail home delivery markets. He can be contacted at [email protected] or [email protected].
