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E-Commerce/Logistics: Delivery costs

I’m in the process of launching a transactional website for a value clothing high street retailer. We have in excess of 200 stores in UK.

One of my apprehensions is would people like to spend £2-4 on delivery when the items they are buying cost £3-12 each. If I offer reduced delivery charges of £1-£1.50 (by paying for it partially myself), or offer free delivery on a minimum spend, would that act as much of an incentive?

Philip Bracken, Director, Professional Services TNT Fashion:
There are some important points when considering how suitable an internet-based sales channel might be for specific retail segments. Primary amongst these is the motivation of the potential consumer. Cost of home delivery is rarely prohibitive for a consumer who values the time saved not having to visit a high-street store location; (remember, there are many customers, particularly women, who prefer the shopping ‘experience’ itself).

Some tips that may help:
You could simply add the delivery cost to the merchandise price but this can lead to complications by effectively creating a two-tier price structure. Also, and perhaps more relevantly, if you do increase the article price to cater for delivery, your customers won’t benefit if they order more than one item. It is better to simply show “Delivery Charges”
and perhaps encourage potential customers to ‘get better value’ by increasing their purchase, gaining economy of scale on the delivery cost.

Secondly, given that the merchandise range is at the value end of the market, you will find that it probably doesn’t make sense to go for the more expensive distribution options that include gaining signed Proof of Delivery. The relatively very small number of instances where people will claim non-delivery will be more than offset by the far lower cost of a normal postal-style delivery.

Thirdly, again reflecting the end of the market which you are targeting, try to avoid the cost and hassle of dealing with returns; this can be done in a positive way by making it clear on the web-site that to ensure that you are able to offer best value and lowest costs etc. that , (obviously you need to conform to consumers’ statutory rights in this area).

Finally, if you select a delivery method that is in itself a strong ‘brand-name’ such as Royal Mail, be up-front about this on the web-site and show their cost structure (try to get it on a per parcel basis). Consumers won’t harbour resentment against your brand when they can see that there is transparency in how you are applying the cost.

Fadi Shuman, e-commerce director and founder of Pod1:
My simple answer is ‘yes’ they would buy from you. If it’s a product that they really want, they’ll spend money on the delivery for it. Obviously the cheaper the delivery charges, the better. Free delivery on minimum spend is also a great incentive for shoppers to spend more on your website.

I recently purchased an item from and spent almost a third of the total amount on delivery. But because it was convenient and it wasn’t a considered purchase, I went for it.

I think with 200 stores across the UK, you can also start looking at multi-channel retailing and providing your customers with options to buy online and pick-up in store. So do have a think about how else your customers could benefit by allowing them to browse and reserve products online.

Good luck!

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