Cost of failed deliveries in the UK: €971mn

Failing with online delivery comes with a price. For retailers and market place sellers in the United Kingdom this cost add up to almost 1 billion euros this year alone. Failed deliveries are in any case something online retailers would be better off without, but seeing the number of 1 billion euros per year makes you wonder why so much deliveries have to fail in the first place.

What has to happen to a delivery to be qualified as ‘failed’? According to the report there are these six delivery failure scenarios: failed first delivery that requires a redelivery; failed first delivery resolved when the customer collects; late delivery; lost order with replacement sent; lost order that results in loss of customer goodwill; and undelivered order that’s returned to the sender.

Costs have fallen 50% in the last 2 years
Of course, the mentioned 1 billion euros is not something that’s set in stone. It’s the cost IMRG’s Valuing Home Delivery Review 2014 suggests. And these costs have fallen by almost 50% in the last two years thanks to innovation in e-tail delivery methods, The Retail Bulletin writes.

“Failed deliveries resulting from orders placed with retailers and marketplace traders each year create in excess of €971 million of avoidable costs – we cannot afford to allow the pace of innovation to slow”, says Andrew Starkey, head of e-logistics at IMRG. “Recent innovations in e-retail delivery have already reduced this cost and provide shoppers with more choice, and more information about when and where they can expect their deliveries.”

He suggests giving customers the ability to fully engage in the delivery process allows them to make better decision about the service they want. “And then to help manage the ‘final mile’ – cooperating with the delivery company to be in the right place at the right time. The result is reduced costs to all stakeholders and a greater customer satisfaction.”

Retailers and carriers should challenge each other
Nigel Doust, chief executive of Blackbay who supported the review, is happy with the improvements in the performance of home delivery, but says carriers still need to respond by finding ways to embrace a consumer relationship and enable consumer controll as well as offering a range of alternative delivery services to them. “Consumers are demanding that carriers and retailers do better, hopefully retailers and carriers can continue to challenge each other through technology improvements to close the gap between home delivery performance and consumer expectation.”