21 May 2019

What do failed deliveries really cost your business?

We’ve all been there, having stayed in all day eagerly awaiting a parcel, you’re greeted by a missed delivery notice instead. All it takes is popping out for a few minutes or being out of earshot of the doorbell and you’ve got a frustrating failed delivery to track down. Missing a delivery is irritating enough for consumers, but the knock-on effects for e-commerce, courier and delivery companies are more than just a nuisance.

At scale, failed deliveries can add up to a far bigger and more far-reaching problem for delivery businesses, with financial, reputational and administrative consequences. We’ve explored the impact of failed deliveries as well as how to minimise the damage.

A dent in your profits

According to the stats, one in 20 UK online orders fail to make it to their delivery destinations first time, and our delivery companies are losing out more financially than their international counterparts. A survey of 300 businesses in the UK, US and Germany found that UK-based e-commerce retailers suffered an average annual loss of £183,000 through lost or failed deliveries, nearly £30,000 more than US businesses, and £75,000 more than those in Germany.

Also surveying consumers, the report revealed that 78 per cent expect businesses to resolve delivery issues, regardless of who’s at fault. This only compounds the failed delivery financial burden for couriers and e-commerce companies, 54 per cent of which will refund delivery charges to customers and cover the cost of redelivery, while 38 per cent also offer a further discount by way of apology. Whether yours is a delivery company or an online retail business, all this adds up to a considerable hit to your profit margin, on top of the manhours spent tracking and resolving failed deliveries.

Damage to your brand reputation

Consumers are less forgiving than ever these days, thanks in part to the sheer abundance of choice they have access to. In most cases, if they experience a failed or lost delivery with one company, they can find a dozen more who may offer a more reliable service. In fact, 57 per cent of customers would choose not to shop again with a retailer if they use a poorly-performing delivery company, which is bad news for all parties.

Retailers will soon take a service contract elsewhere if too many failed deliveries are costing them customers, and it doesn’t take long for other retailers to follow suit when a courier is known to be unreliable. For consumer-facing businesses, loss of repeat custom can be even more damaging when negative word of mouth and publicly visible online criticism keeps even new customers away.

Time spent resolving failed deliveries

Even a simple redelivery takes time to organise for a delivery company’s office team, and if one in 20 online orders are failing, that’s a lot of admin time spent on a task that’s largely avoidable. Worse case, your staff have to spend considerable time tracking down lost deliveries or speaking to frustrated customers or clients unhappy with your service. Your delivery drivers must also fit redeliveries into their shifts, delaying other jobs and subsequently increasing the chances of further missed delivery slots. It’s all time your business pays for, not to mention the space that returns and undelivered stock take up in your warehouses.

EPOD solutions help reduce the impact of failed delivery  

With an Electronic Proof of Delivery solution supporting your operations, your business can give every parcel the best chance of reaching its recipient first time. Live map and vehicle tracking functionality on connected mobile computers or handheld devices enable drivers to find addresses quickly and easily, and your office team can send rerouting info in real-time if a problem on the road threatens delays. Fleet managers can see exactly where delivery drivers are at any point and can keep consumers and clients informed of changes to delivery windows as they happen. Drivers can log successful deliveries on handhelds, automatically sending digital proof of delivery directly to admin teams, as well as details and subsequent actions taken after a failed delivery.

EPOD software and connected devices create a trackable record of events, giving your staff the visibility to rapidly answer failed delivery queries and unite consumers with their goods as soon as possible.  Could EPOD software help your business minimise the cost of failed delivery? Contact us today to find out more.