The estimated overall costs of failed ‘first time, on-time’ deliveries as part of UK’s onlinetrade amount to £851 million per year, according to the latest survey by the British online retail
association IMRG.The figure comes from the IMRG UK Valuing Home Delivery Review 2012, which was supported byBlackbay, a British provider of real-time enterprise mobility solutions, and which follows threeother editions published in 2006, 2008 and 2010.
IMRG explained that the review informs the UK e-retail sector about the costs emerging fromonline deliveries that cannot be made at the first delivery attempt and on time. In turn, this datacan be used to minimise failed deliveries.
The 2012 Review focuses on the costs arising from different delivery failure scenarios. Theseinclude failed first delivery which requires re-delivery or collection by customers, late delivery,lost orders requiring replacement and undelivered orders returned to sender.
The estimated cost of £851 million equals a 7.5% increase on the 2010 figure which is partly dueto an increase in online deliveries. Compared to 2011, the forecasted delivery failure costs areexpected to increase 12.7% by the end of 2012.
According to the latest review, the overall estimated volume of orders generated by UK retailersamounts to 656 million packets and parcels per year excluding grocery and 2-man deliveries. Inaddition, marketplace providers who support SMEs and individual online sellers reportedlycontribute at least another 375-400 million orders each year.
Andrew Starkey, Head of e-Logistics at IMRG, commented: “The actual fulfilment of an onlineorder represents the final hurdle for retailers and a negative experience at that point providesthe impression that lasts. As these figures demonstrate, for retailers it is not just brandreputation that is impacted when a delivery is missed but the associated costs of that failure canalso be significant. The Review reveals that all stakeholders involved in the process of onlinefulfilment (retailers, carriers and consumers) have a role to play to enable the attainment of theshopper’s expectation of 1st time, on-time, every time delivery.”
Blackbay CEO Nigel Doust added: “To meet the increasing demand for online deliveries, at thesame time as keeping existing customers and importantly winning new ones, retailers must make surethat they deliver the best possible home delivery experience.”
He urged retailers and their carriers to make full use of today’s technology to improvecommunication about the status of individual parcels throughout the entire delivery process soconsumers know where and when their parcels will be delivered. “It’s all about improvedcommunication between the retailer, the carrier and the consumer to ensure delivery occurs rightfirst time.”
