Cost of Christmas: Online retailers lose £132.5m in missing parcels

Missed deliveries will cost online UK businesses £132.5m this Christmas, according to the latest ecommerce research.


The cost is attributed to the price of replacing and redirecting poorly addressed parcels, “not at home” delivery, and late packages which result in the loss of repeat business from disgruntled customers.
The findings have been drawn from studies carried out by Worcester-based address specialists Postcode Anywhere and Interactive Media in Retail Group (IMRG) earlier this year.
Postcode Anywhere’s MD Guy Mucklow said: “It is taken as a fact of life that goods go astray in the order and fulfilment process. But for the hundreds of thousands of consumers who lose their orders, this is simply unacceptable – and at Christmas, doubly so.
“Our studies show this will translate into direct costs for online businesses this festive season. By improving procedures across the whole ordering process, from sign-up to check-out, ecommerce vendors can save a considerable sum of money, while improving their online reputation and retaining the customers they already have.
“At one extreme of the fulfilment chain, processes could be improved by ensuring goods are delivered by a company offering guaranteed delivery slots. At the other, it could mean revising the online checkout so address details can be captured accurately, using tools such as address auto-fill.
“Despite our sophisticated postal system, incorrect addresses are still a huge problem in the UK. Consider that missing just one letter in a postcode could be the difference between, for example, a Manchester and a Milton Keynes address. That’s a wasted 300-mile round trip for the courier and over a week’s delay for the customer – annoying at the best of times, and unacceptable for a last-minute Christmas gift.
“Although mistyped data is often the ‘fault’ of the consumer, it is up to the e-commerce vendor to make sure they collect an accurate address, because they bear a responsibility to their customers along with the cost of replacement or redirection if things go wrong.
“By our estimations, UK ecommerce will lose £2m on Christmas day alone, simply because of missing postcodes or incorrectly captured addresses. Address auto-fill and validation tools from suppliers such as Postcode Anywhere nip these problems in the bud before the customer has even completed their order.”
Guy is a member of UK technology association Intellect and sits on Royal Mail’s Postcode Address File (PAF®) address database advisory board.
The scope and range of the data in the study, IMRG’s Valuing Home Delivery Survey 2009-10, represents 95 retailers, more than 12 million online consumers, over 3.5 million active online shoppers and over 14 million parcels dispatched. A summary of the report can be found at www.postcodeanywhere.com/imrg-survey. Estimates for the Christmas period assume online sales of £6.6bn during this time.
The unusual items Royal Mail looks after thanks to incorrect addresses
• IMRG estimated the annual cost of missed delivery to ecommerce at £1 billion
• Every week around 600,000 pieces of mail are cannot be delivered because of incorrect addresses and poor packaging
• 25,000 of these have no address on them at all, only the recipient’s name
• Lost mail goes to Royal Mail’s National Return Centre in Belfast – the only place in the country where it’s legal to open another person’s post
• Unusual items that have been lost include:
• Traffic lights – The post office ran a campaign to trace the owner of this bulky, unaddressed item, but as yet no one has come forward
• Dead animals – the centre receives many dead animals, some of which are stuffed
• Car parts – A car door once arrived at the centre with no clues where it came from or where it was supposed to go
• Film props – One particularly grisly package contained a bloodied prosthetic hand from Saving Private Ryan
• False teeth – Apparently Royal Mail ends up with a lot of misaddressed dentures, which, if traced, are returned to the relevant dentist
• False legs – Royal Mail also receive a lot of misaddressed limbs. Sadly, most are never reunited with their (presumably hopping-mad) owners
• If you have lost something in the post, try Royal Mail’s customer services helpline on: 08457 740 740
www.postcodeanywhere.com.
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