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Failed deliveries are costing up to £780 million, says IMRG

Failed deliveries are costing up to £780 million according to Valuing Home Delivery 2016, the latest in the bi-annual IMRG review of the sector, first published in 2006.

Ten years on from the debut report this year’s review concludes that retailers have achieved considerable success in improving the online delivery experience of shoppers, as well as better managing costs. However, the report points out that whilst improvements have been made there is still much to do.

“The market has improved,” said Andrew Starkey, head of e-logistics for IMRG. “On time delivery is the best it’s been for three years and first attempt deliveries have also improved,” he said. But other cost increases – such as that of customer time – as well as the sheer rise in volume means the battle is not won yet, he said.

“The reasons for improvement are down to a number of things. Royal Mail now allows deliver to a neighbour and there are now improved safe place delivery options. Pre-delivery alerts meanwhile mean that customers can anticipate and divert delivery,” he said. “Tracking and communication have also improved and click and collect is also driving the benefits.”

Don’t get complacent

Starkey warned retailers not to get complacent however and to consider the value of a good delivery experience. “Consumers do highly rate a good delivery service so if a retailer is not using the services provided by the market then they risk upsetting the customer,” he said. “Service levels haven’t fallen but expectations have risen and retailers who are lagging behind will find that they are being compared with competitors who do more,” said Starkey.

“You have to pay constant attention to this but if you invest in the right delivery services that investment will pay back. The biggest cost to retailers per event is if you lose a customer [as a result of a failed or poor delivery]. It’s the smallest percentage of events but has the highest cost,” said Starkey.

The IMRG recommends that retailers use an online calculator, produced in association with mobile workforce management specialists Blackbay who supported the review, to input their own data to understand the impact of failed deliveries on their business, using scenario testing to work out where weak points may be, or where improvements could be made. Retailers can obtain the calculator from Katie.kinraid@blackbay.com


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