Understanding The Cost Of Missed Deliveries To Shippers

Melissa IN Team | Retail | , , ,

Today, anything from a set of spoons and forks to a car can be bought and sold online. Though the products may vary, one fact remains constant – the responsibility of having the order delivered to the customer on time rests squarely on the shoulders of the retailer. Irrespective of whether there’s a delay in delivery because of traffic or because the customer forgot to mention the street name, missed deliveries are a frustrating and expensive affair.

How Do Missed Deliveries Impact Customers?

Almost all of us have been at the receiving end of a missed delivery at some point of time or the other. You’ve waited all day for an important delivery only to be told that it will reach you tomorrow or you’ve been tracking an order and suddenly it seems to be going in the opposite direction! Missed deliveries are frustrating and inconvenient. When it comes to high-value orders, many people actually take the day off on the delivery date so that they can be home to receive the package.

So, when a delivery doesn’t arrive as scheduled, the frustration typically turns into complaints and a loss of goodwill towards the retailer. The customer may leave a negative review and may turn to competitors for future purchases.

How Do Missed Deliveries Impact Businesses?

Understanding the impact of missed deliveries on businesses is slightly more complicated. There are immediate and long-term effects to be considered.

• Increased shipping costs

When a delivery doesn’t go as scheduled, the shipper must instantly reschedule it. This means additional expenses such as fuel. Last-mile delivery within a supply chain costs around 28% of the total transportation costs! Even if the address entered by the customer is wrong, 32% of them expect the retailer to re-route the shipment on their behalf.

This may also have a knock-on effect on other deliveries. Delivery vehicles have a limited capacity and in the case of large, bulky items, the delivery of some other order may need to be rescheduled. This can have a domino effect.

• Lost revenue

According to the Indian Motorcycle Riders Group (IMRG), missed deliveries cost retailers, shippers, and consumers a collective $2 billion a year. In a bid to ease the customer’s frustration and apologize for the inconvenience, many retailers offer a discount on future purchases. This eats into their revenue.

There’s also the risk that the customer will not place an order with the seller again. According to a study, 69% of consumers will not make a second purchase with a retailer if their order is not delivered within 2 days of the promised date. 16% of respondents said that they wouldn’t shop with the retailer again after just a single incorrect delivery. Estimating this loss of revenue is nearly impossible.

• Fall in brand perception

E-commerce has risen to its current popular position because of the convenience it offers in terms of saved time and effort. It has led to a demand for instant gratification and lowered a willingness to compromise.

In an era where product differentiation is extremely difficult, customer experience is what builds a brand. That said, even the most loyal shopper will start looking for alternative service providers if they face missed deliveries on more than one occasion. Nobody wants to spend their time calling customer services.

Thus, missed deliveries affect the way your brand is perceived. Customers don’t really care about whose fault it is and cannot differentiate between the service offered by the retailer and the shipper. A survey reported that 73.6% of customers felt that delivery is the most important part of their overall shopping experience. They will be quick to leave a negative review and even if the product is excellent, when they talk of it, they will mention how the delivery was delayed. This drop in perception can keep other potential customers from shopping with your brand.

• Increased carbon footprint

Environmental concerns are an indirect effect of missed deliveries. Getting your delivery agents to drive down to a customer’s address again means extra fuel usage and higher greenhouse emissions. Estimating around 1 billion missed deliveries annually puts the amount of carbon released due to this at around 3,742 metric tons. This is the amount of carbon it would have taken 9000 trees 58-years to sequester.

Today, all brands big and small are talking about the steps they’re taking to reduce their carbon footprint. However, these greenhouse gas emissions negate their hard work and can once again affect how the brand is perceived.

How Can Shippers Minimize Missed Deliveries

It would be impractical to suggest that a brand can achieve 100% delivery success. Many causes of missed deliveries are out of your control. For example, you can’t fight storms and natural calamities. With advancements in GPS technology, traffic can be navigated and delivery routes can be optimized but only to an extent. That said, there’s still plenty that can be done to improve last-mile shipping.

One of the most important steps towards minimizing missed deliveries is to validate customer addresses and contact details when they are being collected. There are a number of data cleaning and enrichment software that can help do this.

When the customer enters his/her address, the address must be compared to data from reliable third-party databases to ensure that it is correct. Missed details such as pin codes can be added on to enrich the data and make last-mile delivery easier. There may be instances where the address entered is correct but elements are outdated. For example, the city may have changed a street name but the customer may have still entered the old street name. In such cases, you need to enrich the data with updated details.

The Bottom Line

Having a reliable database with correct, current addresses will show you instant results in terms of fewer missed deliveries. That’s not all, having reliable data also helps with your marketing ventures and helps make intelligent business decisions. The bottom line- don’t let missed deliveries become missed opportunities.

Schedule your demo today, to learn more about avoiding missed deliveries with Melissa.