eCommerce: Costs for faulty deliveries on the rise

The current Corona pandemic is reinforcing the pre-crisis trend of shifting from brick-and-mortar retail to online retail. Online orders are reaching record high levels. As a recently published study by Direct Link shows, in individual countries the volume of online orders among Internet users increased by up to 40% during the pandemic. The increase was greatest in Spain, followed by Belgium and Italy.

Sixty-nine percent of retailers also reported a massive increase in the average value of orders placed online. At the same time, customers are increasingly trusting purchases from global brands. Fifty-four percent of retailers report a trend toward international orders, according to a new Loquate study.
In Europe's three most populous countries alone, more than €150 billion worth of goods were ordered online in 2020. Across Europe, the value is likely to have been more than €300 billion in 2020.

Every failed delivery incurs additional costs
With higher order volumes and global movement of goods, poor delivery performance poses a major threat to a company's success. As the Loquate study now reveals, failed deliveries are a growing problem for retailers, with 99 percent of eCommerce businesses confirming that a proportion of their deliveries are not delivered or are delivered late.
24 percent of business owners admit that more than one in ten orders cannot be delivered on the first attempt. The cost of failed deliveries is extensive. About eight percent of first-time deliveries fail. This costs the retailer an average of 14.69 euros per order

Reliable delivery determines customer satisfaction
A failed delivery attempt is very annoying for both retailers and recipients. The reason for failed deliveries can be incorrect address data, for example, but more and more often the reason is that delivery staff do not find the recipients at home.
This is not surprising, because more and more often orders are triggered from somewhere on the road using a smartphone. At this moment, the possibility of delivery of the goods is thought of in the fewest cases. Nevertheless, successful delivery is enormously important for customer loyalty. As a study by the German Retailers Association showed, for 52% of shoppers, smooth delivery of the goods is one of the most important criteria for the retailer rating and thus also for the longer customer loyalty sought.

Goods left on the doorstep are often stolen
However, if customer complaints arise because the goods could not be properly delivered to the customer, the parcel service providers quickly come under pressure from online retailers. Many parcel service providers therefore reserve the right to "substitute delivery" in their general terms and conditions, which usually means dropping off the parcel at a neighbor's or leaving it on the doorstep. But what few people know: These clauses are usually legally invalid. This has been confirmed by various European courts in corresponding rulings. In addition, substitute services entail the risk that the parcel received by the neighbor is simply not handed over to the recipient or that the goods deposited outside the front door or garage are simply stolen.
It is therefore not without reason that the online industry is looking for solutions that increase delivery efficiency and prevent customer loss due to last-mile delivery problems as far as possible.

Many orders actually fit in the secure mailbox
In a specially commissioned study, the International Post Corporation (IPC) determined back in 2018 that more than 50% of all online orders weigh less than 500g. More than 40% of goods ordered online could be packed due to their size in such a way that they can then be safely delivered to the mailbox at home. Instead, oversized packaging is still used far too often, which is absolutely disadvantageous from an ecological point of view and also does not fit in the mailbox.

Direct mailbox delivery, however, would have the great advantage for the online retailer that the recipient does not necessarily have to be found at home for smooth delivery. Once the goods are deposited in the mailbox, they are safe from theft and damage.