UK retailers are set to boost investment in logistics by a third over the next five years, according to research published recently.
A survey by law firm TLT of 100 leading UK retailers found that logistics investment amongst leading retailers was set to grow from 9% to 12% of annual revenue.
This came as 46% of UK retailers said the future of their business depended on improving fulfilment and logistics, while 73% said more companies would need to offer free delivery to compete. One of the areas of pressure was returns, with 56% saying effective management of returns was key to the profitability of online sales.
The investment would lead to, amongst other things, faster delivery. The proportion of retailers offering next-day delivery or faster is set to grow from 62% to 83% in the future, while the proportion offering same-day would rise from 19% to 29%.
Perran Jervis, partner and head of retail and consumer goods at UK law firm TLT, said: “We’ve been surveying the UK’s top 100 retailers for several years now, and while adapting to an increase in online sales is not new, this year’s data suggests that retailers have reached a tipping point and business models need to change to become more agile.
“Consumers increasingly want fast, free and flexible delivery. That’s going to require fundamental changes to warehouse locations and technology, product visibility and commercial offerings, including offering customers a more personalised service.”
