Retailers are shouldering mounting costs of failed deliveries, with more than half of consumers saying they would not shop with a retailer again.

After speaking to more than 300 retailers in the US, UK and Germany, ecommerce data expert PCA Predict (a GBG company) found that 65% of respondents identified failed or late deliveries as a significant cost to their business.

Indeed, the research revealed that failed deliveries cost retailers in numerous ways.

Following a failed delivery, 54% will refund the delivery charges to the customer, 54% will pay additional costs for redelivery and 38% will offer the customer a discount as an apology.

With 5% of all online orders failing to reach the intended recipient the first time, the costs can quickly build up.

“With 5% of all online orders failing to reach the intended recipient the first time, the costs can quickly build up”

Deliveries that don’t arrive can also damage the retailer’s reputation. When PCA Predict asked consumers why they thought their orders arrived late, 43% place blame on the courier and 34% think the retailer was at fault.

However, customers ultimately feel the retailer is at fault if the courier fails to deliver, with only 36% saying they’d blame the courier rather than the retailer.

A significant 57% of customers would not shop again with a retailer if they use an unreliable courier.

While 80% of retailers say that customers often do not realise failed deliveries are due to the consumer inputting an incorrect address, only 9% of shoppers consider this to be a cause of failed deliveries, highlighting the importance of data quality.

Accurate data collection

Head of marketing at PCA Predict Chris Boaz says: “As our data shows, sadly retailers are not collecting accurate address data, which is the biggest reason as to why orders aren’t arriving on time.

“To put this problem into context, one in every 20 online orders is not delivered on the first attempt, which can have serious, negative implications for retailers.

“Sadly retailers are not collecting accurate address data, which is the biggest reason as to why orders aren’t arriving on time”

Chris Boaz, PCA Predict

“However, help is at hand to rectify this. Technology, such as verification solutions, eliminate incorrect address data to ensure customers provide data that is as accurate as possible.

“Yet, this technology alone won’t solve the issue. Retailers also must facilitate an excellent checkout experience, focused on speed, accessibility and security.

“Removing friction from the checkout process will fix failed deliveries, meaning a win-win situation for both retailers and customers.”

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PCA Predict’s address-verification service is used by more than 11,000 leading ecommerce brands including Asos, Tesco and House of Fraser. These insights are based on billions of online transactions that PCA Predict’s platform gathers each day and analyses with its Ecommerce Trends tool.