Asos has raised the delivery bar yet again by offering free returns, but what do online shoppers now expect and is it worth trying to keep up with the competition?

Are delivery charges now the biggest battle ground for online retailers?

Asos has broken the mould and introduced free returns for its customers as part of its growing delivery options.

In recent months Asos has been raising the bar with offers to its customers including same-day delivery for those inside the M25. Such options are becoming ever more important in the online
world, particularly for those without stores to deliver returns to or pick up goods from. Amazon’s recent acquisition, shoe etailer Zappos, made its name with outstanding customer service, including both free delivery and returns. 

Now that most retailers have mastered the basics of good looking sites with quality imagery, video and extensive offers, the next big battle ground is becoming delivery and the whole service experience.

How can retailers justify taking on the costs of delivery and returns?

Director of etail consultancy eCommera and Figleaves founder Michael Ross says that etailers such as Amazon and Zappos see returns and delivery as a marketing cost. Taking on the cost of delivery themselves lifts customer loyalty and pits them above the competition. “That is exactly the right way to look at it,” says Ross. “But this is not something traditional retailers get.”

He warns, though, that the economics of free returns are complicated. “The trade off for retailers means that they really need to understand where their profit is coming from.”

Ross says free delivery and returns could initially result in a capital hit, but the long-term benefits could outweigh the pain in terms of customer loyalty, larger basket sizes and traffic.

What other delivery options are being explored?

Premium services where customers pay for extra delivery options are becoming more popular, such as Amazon Prime and Ocado’s Deliver.

Food retailers began the trend of offering specific time slots for deliveries, which Asos and some electricals retailers now favour. Pick-up and drop-off points such as local pubs for those without stores are also increasing.

What next?

The delivery experience will continue to restrain some online growth so retailers are likely to keep raising the bar. Although free returns and delivery across the board is unlikely, choice will increase for customers.

Ross says the delivery battle shows just how dynamic ecommerce still is and this battle is likely to mark out the big winners in etail’s next stage.