Report raises the question: how much do delivery failures cost?

Posted by Catarina Fonseca

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The IMRG’s 2018 Valuing Home Delivery Review report attempted to find out the cost of not meeting customers’ expectations regarding parcel delivery in the UK. And the discovery is that it can be quite high.

The analysis took into account about 120 million orders and deliveries, more than 200 retailers and 1,200 consumers. The conclusion is that deliveries failures in the UK costs around 1.6 billion pounds, which exceeds 1.8 billion euros.

As Dan Symonds analyzed for Postal and Parcel Technology International, we need to assess the issue not only quantitatively but also qualitatively and pay attention to the importance of properly understanding what makes a delivery good.

Especially in more developed markets, such as the UK itself, it’s clear that the pressure for faster deliveries is increasing. However, other studies show that, at the end of the day, transparency of information may be more important than speed. The point is, yes, consumers tend to prefer same-day and next-day deliveries, if they are available. But better than that, they want control over their deliveries. In Spain, for example, although they expect the delivery time of a product to be small, resulting from the business model of big players like Amazon, most consumers still believe it is acceptable that their orders arrive within 3 and 4 days.

It is also important to remember that a failed delivery can be a waste of resources not only for online stores and carriers, but also for consumers. So, given the numbers raised by IMRG, the question is: is it worth it to offer faster deliveries that will put pressure on the entire chain, increase the risk of failure, and therefore, its cost?

Providing a good delivery service goes far beyond delivering something the next day. In the end, a good delivery is one that arrives as scheduled and not necessarily in the promise of being faster which, when not fulfilled, only generates customer frustration. And the spending of a few billion pounds, as the IMRG’s 2018 Valuing Home Delivery Review showed.

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