Covid to add £20bn more to UK online home delivery market by 2025

Home delivery

UK retailers are bracing for an additional £19.6bn of online home deliveries by 2025 as a result of the impact of Covid-19, new data from ecommerce delivery technology firm Metapack and research consultancy Retail Economics suggests.

Metapack’s new Ecommerce Delivery Benchmark report shows that 27.3% of consumers expect to permanently shift more of their shopping online on the back of new behaviours formed since the pandemic.

Consumers permanently switching to shopping more online are expected to support an additional £22.4bn in online sales. This acceleration online is projected to lead to £19.6bn of additional sales going through home deliveries by 2025, compared to a scenario where the pandemic had no impact.

A consequence of the shift online means that 35.8% of consumers expect to visit physical stores less in the future.

In addition, the research shows 24.8% of consumers work from home more since the pandemic, of which 50.6% expect to shop more online permanently, compared to 27.1% of those whose place of work has not been impacted by the pandemic.

By 2025, home workers expect their proportion of online orders delivered to their home to rise by 11.5%, compared to an average of 7.5% among those that haven’t faced a change in their work.

The report also reveals that 37.5% of consumers permanently switching to more online shopping value speed ahead of convenience, cost, and carbon footprint of deliveries.

Richard Lim, Chief Executive of Retail Economics, said: “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.”