The overall cost of online delivery failure to UK retailers is expected to be £473 million this year, a UK etail association has predicted.
If marketplace deliveries are added then this forecast rises to £771 million, according to latest Valuing Home Delivery Review from IMRG, which collects data from more than 100 retailers who sell online.
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.
IMRG head of logistics said: “Failed deliveries resulting from orders placed with retailers and marketplace traders each year create in excess of £250 million of avoidable costs – we cannot afford to allow the pace of innovation to slow."
But the situation is improving – the new report estimates 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.
Blackbay CEO Nigel Doust 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.”