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Ecommerce retailers lose a staggering £183,000 a year through lost deliveries

08-Feb-2018

Ecommerce retailers lose a staggering £183,000 a year through lost deliveries

  • UK shoppers suffer the most from lost or failed deliveries, with 73% admitting to parcels going missing, compared to US & Germany consumers
  • 19% of failed deliveries are due to inaccurate delivery address details
  • 65% of retailers said that failed or late deliveries are a significant cost to their business

Download the report below

A new report released this morning from ecommerce data experts PCA Predict (a GBG company) highlights the true cost implications of failed deliveries to online retailers and reveals that UK shoppers are more likely to experience lost or failed deliveries that those in the US or Germany.

PCA Predict polled over 300 retailers in the UK, US and Germany, and found that British ecommerce retailers lost out on a staggering £183,000 a year through lost or failed deliveries, compared with £155,816.06 ($216,171) in the US and £107,538.30 (€121,804) in Germany.

The report found that over the last year alone, the average cost of per failed delivery to a retailer was £12.89 ($17.78). UK businesses in particular suffer from this, with 5.6% of orders not arriving at their destination, and an average cost of failed delivery to the retailer of £14.35 ($19.23).

Meanwhile, UK shoppers also suffer disproportionately from late or failed deliveries, with 73% affected, compared to just 66% of shoppers from the US. German customers are comparatively better off with 48% of customers suffering a negative delivery experience, but that still amounts to nearly half of all shoppers. 78% of total consumers expect the retailer to resolve a delivery issue, whether it’s the retailer or the courier that’s at fault.

Retailers realise the risk, with 65% of respondents said that failed or late deliveries are a significant cost to their business. The report found that following a failed delivery, 54% of retailers will refund the delivery charges to the customer, 54% will pay additional costs for redelivery, and over a third (38%) will offer the customer a discount as an apology.

How consumers feel about failed deliveries:

While failure to collect accurate customer address data was identified as the primary reason for orders not arriving on time, PCA Predict’s report found that customers have such a low patience threshold for address entry that 61% would abandon their purchase if they encountered issues when entering their address details.

Cost of failed deliveries per region:

Average Total US UK Germany
Number of orders per year 227,834 278,109 228,524 176,345
% of failed deliveries 5% 4.7% 5.6% 4.6%
Cost per failed order £12.81
($17.78 / €14.51)
£11.95
($16.58)
£14.33 £13.13
(€14.87)
Total failed delivery costs / year £143,530.74
($199,127 / €162471.70)
£155,816.06
($216,171)

£183,132

£107,538.30
(€121,804)

 

Chris Boaz, ‎Head of Marketing of PCA Predict, (a GBG company) said: “If you consider that one in twenty of all online orders don’t make it to the intended recipient first time, these costs quickly build up. Failed deliveries not only carry cost implications, they can also cause significant damage to the retailer’s brand reputation, resulting in loss of repeat custom and failure to attract new customers.”

“To mitigate against the issues caused by incorrect address data, retailers need to implement verification solutions that allow customers to provide as accurate data as possible. It’s essential that online retailers facilitate a streamlined user experience that ensures customers can go through the checkout process with ease. Removing this friction from the checkout process will play a huge part in fixing failed deliveries, to the joy of both online retailers and customers.”

You can download the full Fixing Failed Deliveries Report below and hear the key findings in their Workshop at 10:30am on Day 2 of IRX 2018.


 

 

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