UK retailers are still not doing enough to incorporate their stores into the online supply chain, a new peak season shipping survey suggests.

The research by retail consultants Kurt Salmon shows that while stores are starting to play a bigger role in helping retailers meet the demands of their online customers, there is still much more they should be doing to build their costliest asset into the fulfilment landscape.

"Even though UK retailers have embraced click and collect, very few are grabbing the opportunity to improve product availability and reduce delivery times by incorporating their stores into the online supply chain so that there is a single fulfilment option," confirms Judy Blackburn, director, Kurt Salmon.

Of the 50 UK retailers surveyed – including traditional big boxes, department stores, specialty retailers and online only e-tailers – only 5% offered 'ship from store', while 'reserve in store' was limited to just 10%.  This compares with figures from a similar survey conducted by Kurt Salmon among retailers in the US, which revealed 'ship from store' was 22%, and 50% offered a 'reserve in store' option.

Some retailers will still be counting the cost of lost sales over Christmas. Of those surveyed, 10% were unable to deliver in the last week before Christmas, with one retailer telling its customers they had to order two weeks before to guarantee delivery.

As more and more customers will only buy online if free shipping and returns are offered, it was not surprising to find this provided by the majority of retailers (90% and 68% respectively). However, servicing this proposition is costly, particularly as multiple orders were delivered in multiple packages.

"To minimise costs, orders need to be delivered in one package, yet 37% of retailers were unable to achieve this, with an average 2.8 parcels for multiple orders. One retailer delivered all six items in six separate packages, each incurring delivery costs and significant packaging waste," says Blackburn.

"But retailers are not just absorbing the cost of delivery, there are also the returns to be taken into consideration. Some 68% of retailers offered free returns and 33% refunded the delivery cost if customers returned the full order.

"After the delivery challenges resulting from Black Friday in 2014, retailers spent 12 months planning to meet expected growth in 2015. While the majority did a good job, realistically they now need to start building new strategies to manage the growing disruption of online rather than continuing to simply plan for growth.

"Many UK retailers were caught out by stock challenges and margin pressure at the end of the year as a result of the warm weather and as the customer spend was brought forward from pre-Christmas gifts to Black Friday purchases," Blackburn adds.

"Planning the range early will be key to ensure customers have the choice but also that retailers can make a profit after discounts and online cost to serve are taken into account.

"Collaboration with new partners to make investment in the last mile to drive omnichannel efficiencies will be an essential next step and as online sales grow the role of the offline store should be questioned: store, showroom, fulfilment hub?

"With some seven months before the next Black Friday, retailers have time to look at how they meet their profitability targets, taking into account their product ranges and promotions, labour cost pressures and their changing property portfolios."