Delivery Is Now a Competitive Advantage in E-commerce

As customer expectations continue to evolve, delivery and returns are no longer operational back-end concerns - they are central to the customer experience and a critical driver of profitability in e-commerce.

Ahead of the Delivery & Logistics Leaders’ Summit in Berlin, Matthieu Erly, Founder of ColisConsult, and Richard Lim, CEO of Retail Economics, sat down to discuss the future of parcel delivery, consumer expectations, returns management and sustainability in e-commerce logistics.

Their conversation revealed a clear message for retailers and logistics leaders alike: delivery strategy is no longer just about fulfilment - it is a core part of brand experience, customer retention and margin protection.

Delivery Information Matters More Than Ever

One of the biggest mistakes many e-commerce retailers still make is treating delivery information as secondary.

According to Matthieu Erly, consumers want to understand delivery conditions almost immediately when visiting a website - particularly when shopping with a retailer for the first time.

“Customers want clarity,” Erly explained. “They want to know quickly: what are the delivery options, how much does it cost, when will it arrive, and can I return it easily?”

He recommends retailers prominently display delivery information on their homepage, using simple visual cues and accessible delivery pages that clearly explain:

• Delivery thresholds
• Available carriers
• Delivery speeds
• Return conditions
• Pickup point options

Richard Lim agreed, noting that delivery transparency has become increasingly important as retailers face rising operating costs and pass more delivery-related charges onto consumers.

“Consumers are evaluating delivery options much earlier in the customer journey than they did a few years ago,” Lim said. “What used to be a straightforward free-delivery proposition has become much more nuanced.”

Research from Retail Economics shows that around one in five non-food online purchases in the UK are abandoned because delivery expectations are not met.

Choice Matters More Than Speed

While rapid delivery often dominates industry headlines, both speakers challenged the assumption that faster is always better.

Erly argued that many retailers overestimate how much customers value express shipping compared to free or low-cost delivery.

“If customers are simply asked whether they want faster delivery, most will say yes,” he explained. “But as soon as there is a cost attached to express delivery, the vast majority prefer a slower free option.”

Instead of focusing exclusively on next-day delivery, Erly believes retailers should optimise their delivery mix by offering multiple fulfilment options that align with different customer needs and basket values.

This includes:

• Pickup point and locker delivery (PUDO)
• Standard home delivery
• Premium express delivery

Out-of-home delivery options are becoming particularly important across Europe, where pickup points and parcel lockers now account for a significant share of parcel volumes in countries such as France and Germany.

These solutions offer benefits on multiple fronts:

• Lower fulfilment costs for retailers
• Greater flexibility for consumers
• Reduced environmental impact
• Improved delivery efficiency during peak periods

Lim noted that delivery choice is often more important than delivery speed itself.

“A customer buying a gift may want timed delivery,” he explained. “Someone making a routine purchase may happily wait longer if delivery is free. The key is giving consumers the ability to choose.”

Managing Delivery Costs Without Damaging Margins

With transport costs accounting for an estimated 5-15% of e-commerce turnover, delivery economics are under increasing scrutiny.

Erly stressed that many retailers still underestimate their true shipping costs because they rely too heavily on carrier rate cards instead of analysing invoice-level data and surcharges.

“The first thing businesses need is visibility,” he said. “You must understand your real transport spend - including packaging, preparation costs, fuel surcharges and volumetric billing.”

Fuel surcharges, in particular, continue to create significant pressure across parcel networks, sometimes adding 10-40% on top of base transportation costs.

To manage these rising costs effectively, Erly recommends retailers:

• Regularly renegotiate carrier contracts
• Maintain flexibility across multiple carriers
• Use carrier-agnostic technology platforms
• Reduce packaging inefficiencies
• Optimise delivery channel mix

Both speakers also discussed the growing role of aggregators and multi-carrier platforms, particularly for retailers navigating peak trading periods or international shipping complexity.

These platforms allow businesses to:

• Switch carriers dynamically based on capacity
• Expand delivery choice
• Improve resilience during seasonal peaks
• Access economies of scale

Returns Remain One of E-commerce’s Biggest Challenges

Returns continue to represent one of the largest operational and financial burdens for online retailers. According to Retail Economics research, approximately 20% of non-food online purchases are returned in the UK, with apparel among the highest-return categories.

The discussion highlighted how returns behaviour is becoming increasingly segmented.

Lim pointed to the rise of:

• Serial returners, who intentionally over-order with plans to send items back
• Slow returners, who delay sending products back, disrupting inventory management
• Opportunistic shoppers, who exploit free delivery thresholds or short-term product usage

“These behaviours create significant costs throughout the supply chain,” Lim explained. “It’s not only about reverse logistics - it affects inventory availability, working capital and profitability.”

Erly added that retailers should avoid applying blanket returns policies across all customers. Instead, businesses should use data and customer segmentation to personalise returns experiences.

Potential strategies include:

• Tailored refund speeds
• Differential return policies
• Friction-based return journeys
• Improved product information and sizing tools
• Selective free returns for loyal customers

Even small amounts of “friction” in the returns process can significantly reduce unnecessary returns.

Some retailers, for example, no longer include return labels inside parcels, instead requiring customers to initiate returns online.

Others delay refunds for habitual returners while accelerating refunds for high-value customers.

Sustainability and Delivery Efficiency Go Hand in Hand

Many of the strategies that reduce transport costs also reduce carbon emissions, including:

• Smaller packaging formats
• Reduced empty parcel space
• Greater use of parcel lockers and pickup points
• Fewer express air shipments
• Lower return volumes

Erly believes retailers should rethink oversized “unboxing experiences” in favour of more minimalist and sustainable packaging approaches. “Consumers are becoming more conscious about waste,” he said. “A huge branded box may no longer create the positive experience brands think it does.”

He also highlighted the environmental impact of excessive returns and unnecessary express deliveries.

“Not every parcel needs to travel by air,” Erly explained. “If a product can arrive one or two days later through a more sustainable network, many customers are perfectly happy with that.”

The Future of E-commerce Delivery

The discussion between Matthieu Erly and Richard Lim reinforced how rapidly delivery strategy is evolving.

Delivery is no longer simply a logistics function operating behind the scenes. It now directly shapes:

• Customer acquisition
• Conversion rates
• Brand perception
• Profitability
• Sustainability performance

For logistics and retail leaders, the challenge moving forward will be balancing customer expectations with operational efficiency and environmental responsibility.

As the sector prepares for another period of rapid transformation, one thing is increasingly clear: the businesses that win in e-commerce will be the ones that treat delivery not as a cost centre - but as a strategic differentiator.

See both Matthieu and Richard speak at the Delivery & Logistics Leaders' Summit this May 11-12th in Berlin.