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Failed online deliveries will cost 771 million this year

Thursday August 28th 2014

A new report has predicted that the cost of online delivery failure to UK retailers and marketplace sellers is expected to be 771 million this year.

According to the IMRG Valuing Home Delivery Review 2014, the cost to retailers alone will be £473 million.

However, using like-for-like volumes IMRG also estimates that costs associated with delivery failure may have fallen by almost 50% in the last two years, mainly as a result of innovation in e-retail methods.

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The review, conducted in partnership with delivery solutions provider Blackbay, took into consideration the cost of a number of scenarios including failed delivery, late delivery, lost orders and returns.

Andrew Starkey, head of e-logistics at IMRG, said: “Failed deliveries resulting from orders placed with retailers and marketplace traders each year create in excess of £¾ billion of avoidable costs – we cannot afford to allow the pace of innovation to slow. 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.”