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By
Reuters
Published
Dec 18, 2014
Reading time
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Stores fight back as Christmas delivery delays hit e-tailers

By
Reuters
Published
Dec 18, 2014

BERLIN/PARIS - The Christmas rush is exposing the limitations of internet-only retailers as surging orders cause delivery delays, allowing Europe's shops to fight back with "click and collect" services and more in-store theater.

Online retailers such as Amazon have been winning market share from store groups for years, and there are few signs that Europeans are tiring of shopping from their computers and mobile phones.


Researchers Mintel expect European online retail sales will rise 17 percent to 193 billion euros ($237 billion) this year, up from 15 percent in 2013 and far outpacing a sluggish broader industry.

However, there is mounting evidence that a greater proportion of this growth is being captured by shops offering customers the option of picking up online orders in store, rather than internet-only sellers.

Britain's biggest department store group John Lewis, which was early to integrate its store and e-commerce operations, saw online sales leap 42 percent in the so-called "Black Friday" week of pre-Christmas offers, helping it to record its highest ever sales week in its 150-year history.

And Media-Saturn, Europe's biggest consumer electricals chain which has been losing market share to internet rivals for years, says it is now making up lost ground, with online sales surging 30 percent in the year ended September.

"We do not see the peak for online sales, but stores are back," said Alexis Lecanuet, retail specialist at consultancy Accenture. "We are seeing that the pure online experience is sometimes not the easiest or most convenient way to shop for customers, either for advice reasons, or availability reasons."



DELIVERY WORRIES

Amazon is at the forefront of innovations by internet-only companies aimed at improving services, handling some deliveries itself and launching its own pick-up points, while working on expanding same-day delivery globally.

But most pure online retailers are reliant on other postal services, and high-profile problems have stoked concerns among shoppers about whether they will get internet orders on time.


British parcel carrier Yodel, which delivers some orders for Amazon as well as other chains such as Tesco, warned of delays last week after "Black Friday" and "Cyber Monday" deals resulted in volumes 26 percent higher than expected.

In Germany, trade union Verdi has said it cannot rule out delays to Amazon deliveries after it called strikes at warehouses this week -- although the U.S. retailer promised parcels would arrive on time for Christmas.

Concerns about delivery delays rank high among customers. An Accenture survey found that while 67 percent of Britons planned to do most of their Christmas shopping at online-only retailers, more than half were worried about receiving goods on time.

That could start to curb enthusiasm for online shopping. Another Accenture survey this year found that 48 percent of consumers in mature markets ranked online shopping for convenience, down from 56 percent last year.

Consultants PwC recorded a similar trend in France, with 43 percent of consumers saying they preferred to shop in stores, up from 35 percent in 2013.

"The French are still very attached to the experience of going to a store, to be able to touch the product and have it right away. Some consumers also return to stores after a bad experience online,” said PwC partner Sabine Durand-Hayes.


STORES STRIKE BACK

Meantime, many stores have made big improvements in handling online orders. Media-Saturn, owned by Metro, has just rolled out a same-day delivery service to 20 cities, allowing customers to pick up orders in store or use a courier. Up to 50 percent of its online orders are now collected in store.

"If somebody wants a television to watch the football this evening, they can reserve it online and pick it up in the store within the hour. Nobody else can do that," said Metro Chief Executive Olaf Koch.


Click-and-collect could make up 25 percent to 40 percent of UK online non-food sales this Christmas, according to Alex Smith-Bingham of consulting firm Capgemini.

Christmas also provides an opportunity for shops to win customers back with in-store theater, whether product demonstrations, tastings or visits to Santa's grotto.

"Usually I buy a lot of electronics online, but for Christmas I like to go into the shop, for the atmosphere, and to try things out," said 20-year-old student Dennis Staatz, shopping on Berlin's Alexanderplatz.

But there are still big challenges for store groups, not least in ensuring they get their own online businesses right.

Marks & Spencer, Britain's biggest clothing retailer by sales, said last week it had been forced to extend delivery times for online orders as a new distribution center has struggled to cope with heavy Christmas demand.

$1 = €0.81

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