Failed Delivery Costs £750 Million this Year

Last Saturday afternoon I was playing Lego with my son in the front room and happened to see a shadow pass the window. It was a parcel delivery man, leaving…

I flew out the door and shouted: ‘I’m in!’

He replied ‘It’s alright, mate, I’ve left a parcel by your garage.’

‘Did you ring the bell?’ I asked, naively.

‘Didn’t look like anyone was in’ he replied. This despite the fact there was a car in the drive and the window was open.

He doesn’t know how lucky he was my wife wasn’t around…

Needless to say it wasn’t a delivery by one of ParcelHero’s partners! For more info on ParcelHero timed deliveries click here.

With this event in mind it didn’t come as that big a surprise to see that IMRG has issued a report about the number of missed and missing deliveries this year, and the amount this costs retailers and traders.

What did surprise me was the actual sum: £771 million. Ouch! Take a second to think about that, nigh on £3/4 billion. We all hate missing deliveries and sometimes it’s cost me money in terms of organising time off from work. I had no idea of the true cost to retailers however.

The IMRG Valuing Home Delivery Review 2014 forecasts that failed deliveries across marketplace and multichannel retailers will cost £771m this year. If marketplace deliveries are excluded, the total comes to £473m.

‘Failed deliveries resulting from orders placed with retailers and marketplace traders each year create in excess of £¾billion of avoidable costs – we cannot afford to allow the pace of innovation to slow,’ says Andrew Starkey, head of e-logistics at the IMRG.

IMRG calculated the cost associated with 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.

I’ve said before that the final delivery is the closest an online shopper actually physically gets to a representative of a brand or retailer. The experience should be akin to receiving a present if possible. Not all customers will differentiate between a brand or retailer and the quality of the delivery company they use. It’s a gamble with your customers’ loyalty if you continually plump for very low-cost delivery companies. In the courier market, as in much of the rest of life, you get what you pay for. And online customers will very quickly vote with their feet, or mouse. I can add here that ParcelHero pro-actively monitors your shipments – something not offered by most other online couriers – so if there is a delay, ParcelHero can resolve it.

The better news for the industry is that, despite this staggering number, the report estimates costs linked to delivery failure may have actually almost halved in the last two years following innovation in e-retail logistics. For example Apps routinely update us now on when a parcel is in transit and when it’s due to arrive.

Now if the guy can just take time to actually ring the doorbell, we can all start saving some time and money.

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