Could failed deliveries threaten to derail the global eCommerce boom?

By Matthew Furneaux, Director of Location Intelligence at Loqate, a GBG solution

The pandemic has prompted a global surge in consumers buying goods online, quickly accelerating a trend that was already well underway.

As a result, business is booming for retail businesses worldwide, with 54% of firms reporting an increase in international orders during the past 12 months. While this has clearly paid dividends for e-retailers, there is one issue that could threaten to disrupt this thriving sector: failed deliveries.

In our latest piece of global research, Fixing Failed Deliveries, we surveyed 3,000 online shoppers worldwide and 300 retail executives to find out just how prevalent and costly failed deliveries really are.

In total, 68% of the businesses we spoke to said that failed or late deliveries pose a significant cost to their operation. And as it transpires, higher order volumes over the last 12 months have indeed led to more failed deliveries.

76% of consumers reported at least one late delivery in the past year, with 55% believing that international orders are more likely to be delayed. In fact, in the UK, only 22% of shoppers said they received all of their orders on time in the last 12 months.

A staggering 99% of eCommerce companies admit that some deliveries go wrong, and 24% say more than 1 in 10 orders aren’t delivered first time.

The cost of failed deliveries can quickly add up too. In the UK alone, the cost per failed order is estimated to be around £11.60.

But it’s not just the financial impact that businesses have to contend with. Failed deliveries can also lead to damaged brand reputation. 57% of our consumer respondents said they would be reluctant to use a retailer again if fulfilment fails. And nearly a fifth (19%) said they would either leave a bad review online or complain on social media if a delivery went wrong. With 93% of consumers reading reviews before making a purchase, this is one issue retailers really can’t afford to ignore.

So, what’s contributing to this growing problem of failed deliveries? And how can retailers rectify the issue?

Complexity for customers often begins at the address entry stage, with 71% of businesses admitting that inaccurate delivery addresses are a primary cause of failed delivery. In fact, our research data tells us that when addresses are inaccurate or incomplete, 41% of deliveries are delayed and 39% simply fail.

Despite these eye-watering statistics, a third (33%) of retailers don’t verify address data at all or they leave it for the courier to check.

With cross-border commerce on the rise, language barriers and nuances in address formatting have made fulfilment challenging for some retailers. What’s more, the growth in shopping on mobile has made it easier for mistakes to occur: 38% of smartphone users complain that ordering this way is harder than shopping via a desktop because of problems entering their details.

The solution to the failed deliveries problem lies in collecting more accurate customer data in an easy, frictionless fashion. Implementing an address verification solution allows customers to provide data that is as accurate as possible and strips away checkout frustration.

And customers agree: 70% of consumers are more likely to shop online with vendors that offer a simple order completion form. Additionally, 42% believe retailers that offer an address autocomplete solution are more trustworthy than vendors who don’t.

The cost of failed and late deliveries is undeniably high, stretching from lost sales to damaged reputation. But it’s not all bad news. Address verification is a proven cost-effective solution to this problem and a critical component in offering a better checkout and delivery service. The benefits? More conversions and sales, a reduction in failed deliveries, delighted customers, and an operationally efficient business.

The full report can be downloaded here

By Matthew Furneaux, Director of Location Intelligence at Loqate, a GBG solution

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