Business model

Changing retail delivery market: 1 in 4 UK couriers are pivoting their business model

Despite rising inflation, record fuel costs and growing demand for fast delivery, research finds half of courier companies are now delivering up to 50% more parcels than before Covid.

Couriers are adapting to the changing delivery market, with 27% of UK couriers pivoting their business model in 2022, a new survey has found.

According to the ONS, the proportion of UK retail sales made over the internet has increased by 51% over the past four years. A strong relationship between retailers and couriers is essential to meet customer demand, especially when dealing with challenges such as fluctuating operational and supply chain costs.

The study reveals that 24% of couriers say their delivery service has felt increased demand from the retail and fashion industry over the past two years. They subsequently call for increased collaboration to continue to thrive and meet customer needs.

Other sectors that couriers highlighted as needing increased collaboration include food and beverages (21%); building (21%); agriculture, forestry and fishing (18%); health/medical (16%); and hospitality, events and catering (15%).

The Courier Support Survey – conducted by return loads Platform Courier Exchange – includes feedback from 287 courier business owners and drivers from across the UK. It highlights the greatest pressures within the sector, as well as the impact on business viability and employee health. It also offers insight into how industry problems can be overcome.

Full survey results available here:

How couriers are pivoting their business model

In the survey, 72% of couriers cited skyrocketing operating costs as a major challenge. Demand, however, is not a problem: half of courier companies now deliver up to 50% more parcels than before Covid.

The study also revealed that courier business owners are determined to adapt to take advantage of high demand and avoid external economic factors. 59% of couriers are looking to increase their customer base in 2022. In addition, two-thirds (66%) have implemented a new measure to attract staff, such as increased salaries, sponsorship programs and increased presence on social networks.

Another encouraging sign is that more than one in eight couriers believe embracing technology can relieve everyday pressures.

But retailers and other businesses that use couriers can also help. For example, Boohoo has reintroduced its return fee to help cut costs, which could reduce the pressure on couriers as people think more about what they order. Increased communication and support between different sectors can help alleviate the economic problems and external pressures that couriers – and so many other businesses – face.

Almaz Cleary, Sales Manager at Mail exchangesaid:

“The problem with online shopping is that it’s an explosion of demand, rather than a sustainable development. This left the courier industry with some catching up to do, in terms of capacity. It’s great that couriers are turning to technology for answers, but there needs to be more collaboration with retailers – and other sectors – especially in the short term.

“Everyone is affected by supply chain issues because the logistics industry is so intertwined with day-to-day operations in all kinds of industries. It is essential that couriers and their customers maintain open lines of communication and support each other as much as possible, especially when external factors such as inflation are beyond anyone’s control.

“When all parties are on the same page, supply chain issues can be better managed. If this happens, everyone wins and can benefit from the strong demand we continue to see. »