Tuesday 25th Oct 2016 - Logistics Manager

Online delivery failures cost retailers £771m

The total cost of failed online deliveries is expected to be some £771 million, according to the IMRG Valuing Home Delivery Review 2014. And that is a fall of 50 per cent over the past two years.

The figure includes costs of £473m for online delivery failure combined with £298m for Marketplace deliveries.

However, IMRG estimates that costs associated with delivery failure may have fallen by almost 50 per cent in the last two years as a result of innovation in e-retail delivery.

The review, supported by Blackbay, examines the cost of a number of scenarios including failed delivery, late delivery, lost orders and returns.

“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,” said 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.

“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.”

And Nigel Doust, CEO at Blackbay, said: “Over the past two years we have seen significant improvements in the performance of home delivery, however this report highlights there still remains considerable cause for frustration with an inability for carriers and retailers to provide certainty for every delivery.”