30 January 2018

The true cost of failed deliveries

It could be argued that, for consumers, the delivery of a product is the most important part of the online shopping experience, but it’s something that so many sellers still haven’t quite mastered. Recent research has shown, in fact, that failed deliveries are costing UK businesses hundreds of millions of pounds each year, with peak purchasing periods like Christmas and Black Friday proving particularly pricey for retailers.

The facts and figures

In its ‘Coming Together’ report, released towards the end of 2017, self-styled ‘delivery experience’ company Sorted estimated that there would be £2.3 billion worth of failed deliveries over the Christmas period. This, if realised, would have cost retailers nearly £465 million in returned goods alone. Luckily for ecommerce businesses, Sorted’s survey of 2,000 UK shoppers also looked into the reasons for failed deliveries. It found a lack of flexibility to be the biggest culprit, with one-in-four failed deliveries put down to customers not being able to change their delivery options after an item has been shipped.

Why it’s an issue

  The cost of returned items might be huge, but at least businesses will have a chance to recoup that by reselling the same products to new customers. The real issues lie with the impacts on productivity and customer loyalty. The study found that 39 per cent of shoppers lose faith in a company’s ability to meet their needs if an order isn’t delivered in time, and nearly half – 48 per cent - said a late delivery would make them less likely to buy from the same retailer again. As well as losing customers, businesses that regularly fail to deliver products risk creating huge amounts of unnecessary work for themselves, with returns taking up valuable time and warehouse space. This can slow operations down and negatively impact customers in other ways.

Preventing failed deliveries

Failed deliveries aren’t completely avoidable, but there are ways to minimise the risk and, therefore, keep your customers happier. Sorted’s CEO David Grimes offered his own words of wisdom after unveiling his company’s report, saying: " Simple functionality, such as letting customers choose from a range of the best available delivery options to define what the perfect delivery looks like to them, and then delivering on that promise, will greatly reduce delayed orders and, ultimately, returns during peak trading." On top of this flexibility, you should be working to keeping your delivery fleet running as smoothly as possible. It’s here that technologies like Electronic Proof of Delivery (EPOD) systems can help. Jobs can be organised and tracked effectively, allowing you to give customers up-to-date information that helps make that final exchange – the handing over of goods – much more likely.

In-house technologies like mobile handheld computers can also be used to track orders as they move through the distribution process, once again giving you the ability to be clear and helpful with expectant shoppers.

TouchStar specialises in helping businesses deliver. If you think our EPOD technologies could help you get products where they need to be, on time, get in touch today.