Online retail in the UK equated to around £120 Billion in 2021 which is a 307% increase since 2013 when the figure stood at £39 Billion. In only 8 years the scale of growth is staggering.

There are no signs this trend is slowing down and the effects of the Covid pandemic has been to accelerate the growth in online sales. According to research from Google, lockdown throughout 2020 and 2021 have caused consumers to buy online more than ever before and this buying behavior is set to continue growing.

The pandemic also ‘forced’ many more retailers to sell online which has resulted in many more products being delivered to UK consumers by the mail network.

Items of all shapes, sizes and types can be dispatched to customers including furniture, food and drink, liquids, gifts, home appliances and nearly new cars. Consumers are surprised when there is an option to buy online without the ability for it to be delivered direct to their door.

At Select Automotive our business is suppling quality, in demand car parts for the vehicle aftermarket and we have seen rapid growth in demand for our products and we believe this will continue.

Consumers want convenience and the ability to search, review and order product and services online from the comfort of their own home. There is no doubt Amazon have raised the bar in terms of customer expectation as their unrivalled delivery network operates 7 days a week, including bank holidays, from sunrise to sunset.

Consumers who have experienced this level of service find it hard to accept anything less when purchasing products and services online from other retailers.

UK couriers, in particular Royal Mail, the biggest one, are being left behind.

The cost of fuel has a huge impact on the cost to send a product via the delivery network.  Since January the average diesel price per litre at the pumps have gone from 148.75p to 188.05p so an increase of 26% in 5 months, petrol has seen a similar increase of 25% from 145.55p to 182.31p. There are daily price rises and the price to fill the tank of an average family car is likely to reach

£100 in the next few days (https://www.rac.co.uk/drive/advice/fuel-watch/)

There are a number of factors causing this increase - the cost of crude oil, inflation, the Russian-Ukraine war, a supply squeeze in the market and oil producing nations unwilling to increase output to cater for the demand.

Whatever the reason for the fuel price continuing to rise, it’s not good news for online retailers or consumers alike.

Many logistic companies have tried to absorb these increases but eventually the costs have to be passed on, which has led to Royal Mail increasing its fuel surcharge from 4% in March to 8% from July and this applies to all parcel and special delivery services. This is the third increase in 6 months and looking at the current situation it probably won’t be the last.

As a business owner its difficult to absorb the costs and whilst we have attempted to absorb them we run the risk of running at a loss. This is more acute for online retailers where profit per item may be low.

Royal Mail aren’t the only company increasing fuel surcharges. DPD, UPS and Parcel Force have or are increasing their fuel surcharges to adapt to the rise in fuel costs.

Ultimately this means consumers buying goods which are delivered by the big UK couriers will have to pay more for what is perceived as a poorer level of service when compared to Amazon’s Prime service.

Looking to the future the hope is that logistics and delivery companies embrace changes in technology and start using electric vehicles in their delivery fleet. If this happens on a major scale we are hopeful it will have a positive impact on delivery costs.

Learn more about Select Automotive here - https://www.selectautomotive.co.uk