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Lost or failed deliveries costing SME retailers £183,000 a year

UK small to medium ecommerce retailers are losing £183,000 a year to lost or failed deliveries, according to new research.

The findings are from a new report, Fixing Failed Deliveries, from PCA Predict which polled more than 300 retailers in the UK, US and Germany and more than 2000 consumers. It found that  UK retailers lost out on £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.

In 2017 the average cost of per failed delivery to a retailer was £12.89 ($17.78). For UK businesses 5.6% of orders failed to arrive with an average cost of failed delivery to the retailer of £14.35 ($19.23).

UK shoppers also suffered more from late or failed deliveries, with 73% affected, compared to 66% of shoppers from the US.

The research showed that 78% of total consumers expect the retailer to resolve a delivery issue, whether it’s the retailer or the courier that’s at fault, proving a significant cost to their business for 65% of respondents

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.

Chris Boaz, ‎head of marketing at PCA Predict, 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.”

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)

Image credit: Fotolia

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