Perspectives

The cost of customer experience: why “free” is quietly killing UK retail

Has “free” become the most expensive word in retail?

Over the last decade, the convenience economy and the push for faster, easier, frictionless experiences has reshaped UK retail, for better and for worse. But as margins tighten, many retailers are discovering they have drifted too far in one direction. The “Goldilocks 90 day audit” can help rebalance things.

A few months ago, I decided our house needed a refresh. New lamps, cushions, a few bits of furniture. I went onto a well-known homeware retailer’s website and placed one big order.

What followed was sixteen separate deliveries. Different couriers, different days, random time slots. By week two, we were on first-name terms with half the drivers in our postcode. My kids started building themselves a new house out of the cardboard mountains in the living room. And after all that, one of the lights arrived broken.

In the boardroom, this probably looked like a success. Everything shipped direct to consumer, job done. From my living room, it was chaos. The ridiculous part? I’d have been perfectly happy waiting for one or two consolidated deliveries. I didn’t need sixteen vans turning up over a fortnight. Nobody asked me. They just assumed faster and more frequent meant better.

That’s a problem I keep seeing across UK retail. We’ve become so obsessed with giving customers everything, instantly, for free, that we’ve stopped asking whether the business can actually afford it or if the customer even values it.

The Goldilocks Zone

I think about customer experience as sitting on a spectrum. On one end, you’ve got businesses that are too rigid. Think clunky websites, inflexible return policies, stores that haven’t had a lick of paint since 2005. They save money, but customers feel it. On the other end, you’ve got businesses that try to give everything away. Free delivery, free returns, every channel, every option, all the time. Customers love it. The finance team, does not.

The Goldilocks Zone, is the deliberate middle. Invest where it matters, protect your margin where it doesn’t. Profitable enough and loved enough. That’s the zone.

We don’t have to look far for cautionary tales.

Toys R Us and Wilko sat firmly on the rigidity side. One locked into huge, expensive stores it couldn’t escape. The other got stuck in a no-man’s-land between discounters and online giants, unable to compete on price or convenience. Different shapes of the same problem: when your operations can’t flex, the squeeze only goes one way.

Then look at traditional models like Debenhams and House of Fraser. They struggled under the weight of their unsustainable overheads. They didn’t neglect their customers. They gifted their customers everything, big stores and level of convenience and promotion their P&Ls couldn’t support.

Four household names, all reached a dead end. Two because they were too tight. Two because they were too generous.

Primark said “no” and made £9.4 billion

When I share this example, it always sparks some debate…

In 2024, Primark had over 94% brand awareness in the UK and it generated £9.4 billion in revenue. Without selling online.

They didn’t just “not get round to it.” They looked at the economics and said no. Research from the University of Portsmouth found that the cost of processing a return on a £5 item can reach £6.50, more than the product itself. The maths doesn’t work, and Primark had the nerve to say so. As John Bason, finance director of parent company Associated British Foods, confirmed: the cost of home delivery simply cannot be supported at their price points.

When COVID shut every store, they had zero online channels to fall back on. They still didn’t budge. When stores reopened, customers came straight back. Since then, they’ve introduced a limited Click & Collect model, starting the journey online but finishing it in-store, which dodges the expensive last-mile delivery and gets people through the doors where they invariably buy more.

Primark sits in its Goldilocks Zone by design. Not by accident, not by neglect, by choice.

Strategic friction is not a dirty word

Primark isn’t alone in this. There’s a quiet shift happening across the high street.

Zara now charges £2.95 for postal returns whilst keeping in-store returns free. That’s not punishing customers, it’s nudging behaviour towards the cheaper option, where people often buy something else on the way out. Next does something similar, charging for postal returns but keeping in-store free, whilst their stores double as warehouses and return hubs to bring down last-mile costs.

Then there’s Screwfix, now over 1,000 stores, built entirely around one customer: tradespeople who can’t afford downtime. Click & Collect ready in under a minute. Small, efficient counters rather than enormous showrooms. They’re not trying to be all things to all people. They know exactly who they serve and they’ve built everything around that.

What these retailers have in common is that none of them are trying to be the cheapest or the most generous. They all add friction where the economics demand it. And their customers aren’t up in arms about it, because the experience is built around what those customers actually care about.

The 90-Day Goldilocks Audit

Right, so what do you actually do with all of this? I’m not suggesting you redesign your entire CX strategy. But there are four things worth looking at over the next 90 days that might change how you think about where your money goes.

Pick one real customer journey and trace the true cost-to-serve from end to end. Delivery, returns, service, the lot. Not the optimistic number on the board slide. The proper one. Most people I work with are genuinely shocked when they see it.
Put a real pound sign next to everything you currently badge as “free” or “frictionless.” Someone is paying for it. This is where margin quietly disappears and nobody notices until it’s a problem.
Have an honest look at whether you’ve adopted any CX features simply because a competitor does it. Just because it works for them doesn’t mean the maths works for you.

And finally, try adding one small piece of strategic friction. A return fee, a minimum basket size, a delivery threshold. Try something small and measure it, see what it does to both behaviour and margin. You might surprise yourself.

The reality

Free is rarely free, and friction is not inherently bad.

The real challenge is identifying which parts of the customer experience are earning their keep. Are sixteen vans truly better than one?

Vikki Riches

14 April 2026

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