Retailers are losing nearly 20% of their online Christmas customers to rivals, JDA/Centiro study reveals

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Stock availability issues and unsuitable delivery times have resulted in nearly a fifth (19%) of online Christmas shoppers using an alternative retailer, according to the third annual JDA/Centiro Christmas Customer Pulse report (conducted online by YouGov). As many as 12% of UK adults online who did any shopping online said they used an alternative retailer because their preferred retailer did not have items available online. In addition, 7% stated they had shopped with an alternative retailer because delivery times failed to meet their requirements.

“Christmas shoppers have become increasingly savvy, as they look to use the channels that best suit their budget and lifestyle. This means retailers cannot afford to stand still if they are to meet customers’ growing online shopping expectations,” said Jason Shorrock, vice president of retail strategy EMEA at JDA. “Customers expect products to be available 24/7 and for retailers to offer convenient delivery and collection options. This is the added level of complexity that retailers must be able to cope with. Ultimately, a smarter and more effective supply chain shouldn’t just be for Christmas –  without one, retailers risk damaging customer loyalty and their profits throughout the year.”

Slight decrease in delivery and click & collect issues over the festive period

Overall the research revealed a slight decrease in the number of delivery and click & collect issues encountered by UK online Christmas shoppers as 32% of online Christmas shoppers stated they had experienced an issue with their online purchases (a decrease from 33% the previous year). Of those shoppers that encountered an issue, 31% experienced late deliveries, 23% never actually received the items that they ordered and 22% received damaged items. Nearly a third (32%) of Christmas click & collect shoppers encountered issues with their click & collect orders, which is a decrease from 36% the previous year. From the issues listed, long waiting times due to a lack of in-store staff (32%), and staff being unable to locate or taking a long time to locate items in-store (30%), were cited as the primary reasons that had a negative impact on the Christmas click & collect shopping experience by those that experienced any issues.

While such issues remain, it isn’t surprising that 78% of UK adults online said they would switch to an alternative retailer when shopping online, due to a poor experience with ordering an item online at Christmas. Specifically, 76% would switch to an alternative retailer because of a poor home delivery experience, 66% due to a poor click & collect experience, 74% as a result of a poor returns experience and 79% due to poor issue resolution.

“While it is encouraging to see a slight reduction in Christmas online delivery and click & collect issues, retailers shouldn’t be cracking open the champagne just yet. These findings must be tempered by the fact that Christmas online sales volumes continue to grow,” added Shorrock. “While many retailers focused on providing dedicated areas for click & collect this Christmas, long waiting times and staff being unable to locate items in-store continue to tarnish the customer experience. Even more worrying is the significant number of shoppers who either didn’t receive their online goods or found they were damaged. This is unacceptable at any time, but especially at Christmas. There will be little festive cheer for retailers next year if poor online customer experiences drive shoppers to the competition.”

Click & collect usage plateaus, but the gap narrows between cost and convenience

The research highlighted that 39% of online Christmas shoppers used click & collect services, compared to 41% (2015) and 39% (2014) the previous two years. However, of those respondents that used click & collect for online Christmas shopping, one in five (20%) said they would use click & collect more next Christmas. Interestingly, the while click & collect Christmas shoppers stated that avoiding delivery charges was their reason for using the service (53%), it was closely followed by it being more convenient than home delivery (50%). This 3% difference compares to one of 7% when the same question was asked last year (cost – 56%, convenience – 49%), indicating that convenience is becoming just as important as cost to online shoppers.

Impact of Christmas delivery deadlines

This year, many retailers again set Christmas ordering deadlines to try to ensure items were received in time; this shaped shopping behaviour in the lead up to Christmas. More than a quarter (27%) of Christmas online shoppers ordered items online earlier than planned (compared to 23% in 2015), while 21% shopped in store, instead of online (compared to 19% in 2015).

Niklas Hedin, CEO of Centiro, commented: “Christmas delivery deadlines have become a crucial necessity for many retailers as they look to keep order promises. However, as many online shoppers increasingly come to expect same- and next-day deliveries as the norm, the prospect of customer loyalty for promises kept brings with it significant potential gains. Those retailers that can effectively scale their delivery networks to offer flexible delivery options while at the same time guarantee order promises will be the winners in 2017.”

All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,070 adults and fieldwork was undertaken between 29th to 30th December 2016. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).

To download the JDA/Centiro Christmas Customer Pulse Report 2017, click here.