Failed Delivery Costs The e-Retail Industry £1 Billion a Year!

Failed Delivery
The Interactive Media in Retail Group (IMRG) has recently released the next from their  ‘Valuing Home Delivery Review’ series following on from those released in 2006 and 2008.

This years report, generated in cooperation with Postcode Anywhere Ltd, serves to highlight the progress the e-Retail industry is making to eliminate inefficient cost for its stakeholders and to keep it focused on the business opportunities that remain. It specifically takes into account:

  • The cost of late delivery
  • The cost of attempted delivery
  • The cost of failed delivery
  • The environmental cost of failed delivery
  • The impact of address quality and data management

The scope and range of the data analysed covers cost, quality and volume data representing nearly 100 major retailers and considers:

  • Databases containing more than 12 million online consumers and over 3.5 million active online shoppers
  • In excess of 13 million orders
  • Purchases to the value of £1 billion
  • Over 14 million parcels dispatched

IMRG has in parallel also examined further volume, cost and quality data from the carrier community representing nearly 800 million home deliveries.

So here’s the facts

Delivery Failure

It’s estimated that the UK online and catalogue retail industry now serves 26.9 million active online customers with a growing number from overseas markets. This number is expected to increase to 30 million by 2013 . These consumers are currently responsible for annually:

  • Purchasing around £49.8 billion of products and services
  • Requiring the delivery of an estimated 1.1 billion parcels and packets annually comprising of more than 1bn home deliveries
  • Generating in the region of £4 billion per annum in delivery charges.

Across 6 different ‘delivery failure’ scenarios IMRG have been able to calculate the cost of inefficient delivery to the three main stakeholder groups to be between £790 million and £1 billion per annum – that’s a failed delivery cost of at least £0.70 for EVERY parcel dispatched.

In order to help the industry address this problem, the IMRG have recently launched the IDIS Gold Standard which is designed to enable retailers to offer all consumers the probability of 1st time delivery success under any circumstances.

To find out more and access the full report please visit the IMRG website.

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