Fashion retailers should introduce delivery subscriptions

Department stores and fashion retailers “must consider” delivery subscriptions to counter the threat of Amazon Prime, reveals a new report from GlobalData.

The report reveals that department stores and traditional clothing and footwear retailers are losing market share to online pureplay retailers, and that they must follow their lead into delivery saver schemes, such as Amazon Prime and Asos’ unlimited premier delivery, which it notes encourages customers to shop more frequently and keep the retailer at the forefront of their minds.

Currently, 22.2 percent of online shoppers are subscribed to a non-food delivery saver scheme and 29 percent are subscribed to a food and grocery delivery saver scheme, with Amazon Prime and the Tesco delivery saver being the most popular schemes offered by non-food and food and grocery retailers, the report reveals.

Amazon Prime is leading the way, the report notes, however, fellow pureplays Asos and Boohoo have also captured customer spend with their delivery schemes.

When online shoppers were asked which retailers they would like to introduce a delivery saver scheme, the top five retailers chosen were: Argos, Marks and Spencer, John Lewis, Boots and Debenhams.

Charlotte Pearce, Retail Analyst at GlobalData said: “As department stores and leading clothing and footwear retailers in particular have such a wide range of products available online, a delivery saver scheme can offer consumers value for money as after a few orders, subscribers have effectively made their money back on the equivalent cost of deliveries.’’

Delivery saver schemes to be introduced to counter Amazon Prime

By investing in a delivery subscription scheme, the report states that for retailers like John Lewis, Marks and Spencer or Debenhams it could bring some real benefits by encouraging subscribers to return to the retailer they are signed up to as their first port of call for purchases across different sectors, which will drive customer loyalty and spend per head with the retailer.

Pearce added: “Retailers considering a scheme must trial this with a select shopper base to gage customer reaction, uptake and order frequency before rolling this out on a wider scale. This way, retailers can weigh up whether the investment would be worthwhile and understand its long-term profitability.”

One in five UK online shoppers are currently signed up to a delivery scheme, and this is set to increase as retailers like Next and New Look continue to build their delivery schemes subscriber base through continued marketing support.

Pearce concludes: ‘‘As other retailers start to trial and invest in these schemes, we expect to see a much higher uptake. These schemes offer retailers a way to harness shopper loyalty and drive online sales to protect market shares in a challenging retail environment.

“This is important as limited growth is expected from physical stores but the online channel provides a beacon of hope for retailers with online sales forecast to grow by 17.7 billion pounds to 2022.’’

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