The total cost of delivery failures to UK retailers is predicted to be £473 million this year, according to a review conducted by IMRG (Interactive Media in Retail Group). If this figure is added to the cost of Marketplace deliveries then the total loss rises to a huge three quarters of a billion pounds.
Despite evidence that that delivery failures may have fallen by 50% in the last two years, the economic cost remains painfully high.
Andrew Starkey, Head of e-Logistics at IMRG, said: “Failed deliveries resulting from orders placed with retailers and marketplace traders each year create in excess of £3/4 billion of avoidable costs – we cannot afford to allow the pace of innovation to slow. 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.
“Giving the customer the ability to fully engage in the delivery process allows them to make more informed decisions 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.”
The calculation comes from considering the cost associated with six delivery failure scenarios: late delivery; failed first delivery that requires a redelivery; failed first delivery resolved when the customer collects; lost order with replacement sent; lost order that results in loss of customer goodwill; and undelivered order that’s returned to the sender.