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Failed online deliveries will cost more than £¾ BILLION this year

Failed online deliveries will cost more than £¾ BILLION this year

Industry News – Market Research August 2014

Failed online deliveries will cost more than £¾ BILLION this year

The overall cost of online delivery failure to UK retailers is expected to be £473 million this year, according to the IMRG Valuing Home Delivery Review 2014. If Marketplace deliveries are added then this forecast rises to £771 million.

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

The review, supported by delivery solutions provider Blackbay, takes 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 £¾billion 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."

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.

"To rise to this challenge, and reduce the enormous costs highlighted in this report, carriers need to respond by finding ways to embrace a consumer relationship and enable consumer control as well as offering a range of alternative delivery services to them. Consumers are demanding that carriers and retailers do better, hopefully retailers and carriers can continue to challenge each other through technology improvements to close the gap between home delivery performance and consumer expectation."

The review considers the costs associated with six potential delivery failure scenarios:

– Failed 1st delivery – re-delivery required
– Failed 1st delivery – collection by customer
– Late delivery
– Order lost – replacement sent
– Order lost – loss of customer goodwill
– Order undelivered and returned to sender

About the IMRG Valuing Home Delivery Review 2014
This is the fifth in the series of IMRG UK Valuing Home Delivery Review following on from those published in 2006, 2008, 2010 and 2012.

The purpose of the UK Valuing Home Delivery Review is to help the UK e-retail industry understand the costs incurred when online delivery fails to meet the shoppers expectation, 1st time, on time, every time.

This information allows industry stakeholders to consider what can be done to improve delivery performance and maintain the momentum of service innovation for the ultimate benefit of online consumers.

ENDS

About IMRG
IMRG (Interactive Media in Retail Group) is the UK’s industry association for e-retail. Formed in 1990, IMRG is setting and maintaining pragmatic and robust e-retail standards to enable fast-track industry growth, and facilitates its community of members with practical help, information, tools, guidance and networking. The strength of IMRG is the collective and cooperative power of its members. For more information please visit www.imrg.org or email membership@imrg.org

About Blackbay

Blackbay is the leading provider of mobility enabled solutions for the transport and logistics industry. The company’s configurable end-to-end products ensure first time, on time, every time delivery by connecting the shipper, operations, management, drivers and crucially the customer with real-time information and flexible workflows to create smarter delivery companies. Blackbay, headquartered in London, operates across APAC, EMEA and the USA, supporting over 145,000 drivers delivering in excess of 6 million deliveries per day.

For more information visit: http://www.blackbay.com/ Or follow Blackbay on Twitter: http://twitter.com/#!/BlackbayLtd

Press enquiries
Please contact Richard Redman, PR and Communications Executive, at Richard.redman@imrg.org or on 020 3696 0992.