Thousands of failed deliveries are plaguing the otherwise booming online and home-shopping sector every week. So what’s the solution? Alison Clements finds out more

Soaring demand for home delivery is not in dispute, but how to do it profitably still is – much to the frustration of consumers, retailers and carriers alike. With more than half of UK households elsewhere during the working day, too many packages are heading back to depots, causing fulfilment costs to multiply. 

The buoyant home-delivery sector is growing at twice the rate of total retail spend, according to Verdict Research. However, a study by Royal Mail last year found that 39 per cent of people who had given up on shopping remotely did so because of problems with delivery or having to take time off work to wait for a delivery. 

Delivery firm Amtrak has already acted to try to address the problem. Amtrak now offers its service between 8.30 am and 8.20 pm – an extension of hours directly prompted by the rising popularity of home shopping.

“Delivery will be the main challenge for the year,” predicts IMRG chief executive James Roper, who is urging online businesses and third-party carriers to work harder to solve the final drop dilemma. “Online sales are flying, but our data shows growth is coming from a small number of e-retail businesses that are getting it right. Elsewhere, there is a need to rethink the delivery end of customer service.” 

He adds that Whitehall and the media’s appetite for consumer protection could exacerbate the problem. “Add to this the Department of Transport’s growing alarm at fleets of delivery vans invading residential areas, and there are plenty of reasons why deliveries should be planned and co-ordinated better,” says Roper. 

Vague, week-long delivery windows are certainly no longer appropriate. Industry observers says the one-size-fits-all service will need to be replaced with a range of delivery options to suit different customer needs. 

Last year, online fulfilment specialist Metapack found that of 130 web sites investigated, 60 per cent provided nothing better than the single option of a three- to five-day delivery window. Chief executive Patrick Wall says his company provides clients, including Boots, Comet and Dixons, with the resources to manage a host of options to better meet shoppers’ needs. 

“We compile the best possible range of UK carriers, according to the attributes of the product – considering size, value, weight, the postcodes being delivered to, and the urgency of receipt,” says Wall. Urgently needed PC parts might best be delivered by Business Post, which offers evening delivery, for example.

“My belief is that if you can manage expectations from the outset by offering flexibility, you should achieve first-time deliveries,” says Wall. Rule-of-thumb calculations have it that taking a failed delivery back to the depot and carrying out a paper chase can bump up the carrier’s bill by 40 per cent. However, just a simple phone call would probably ensure the recipient’s presence.

Narrowing the chances of the customer being out is a sensible step, and back-up delivery locations might reduce the number of failed deliveries further. Giving a neighbour’s address can work, but not all neighbours are reliable 0r trustworthy.

Some secure-box schemes – wall-mounted letterboxes with a built-in delivery box – do exist, such as Giraffe Marketing and Bearbox, but widespread adoption seems a long way off.

“DRIVING 10 MILES TO A POSTAL DEPOT ON A SATURDAY MORNING TO RETRIEVE A MISSED DELIVERY JUST WON’T DO” ANDREW STARKEY, COLLECTPOINT

With Royal Mail’s LocalCollect service, customers can pick up from their nearest Post Office – although for many, Post Office opening hours are also an obstacle. 

Keith Jordan, fulfilment director at Zendor, which manages e-fulfilment for Woolworths, Early Learning Centre and River Island, says the company’s local couriers overcome the last-mile delivery problem by agreeing alternative arrangements – such as leaving goods in the greenhouse – on an individual basis. “Building up a rapport with regular home shoppers is great customer service, and it keeps re-delivery costs to a minimum,” says Jordan.

Collectpoint offers another solution. The company has set up a network of 1,600 location points – 24-hour garages and convenience stores – that home shoppers can use as their delivery address. The idea is that workers can stop at a Londis, Spar or Q8 garage at a time convenient to them, rather than being dictated to by the delivery company. 

“Today’s consumers use the internet because they want to save time, so driving 10 miles to a postal depot on a Saturday morning to retrieve a missed delivery just won’t do,” says Collectpoint sales and marketing director Andrew Starkey. “This solution is secure, convenient, and cuts down on deliveries into residential areas.”

He believes a charge of £2.50 for each pick-up, on top of the e-tailer’s delivery charge, would not dissuade customers who simply want to secure their shopping with minimum hassle. Once signed up on the Collectpoint web site, customers can use a Collectpoint address for any web or catalogue order. 

Retailers such as Maplin Electronics and The Gadget Shop offer the service through their web sites. With up to 8,000 locations being sought by Collectpoint, Starkey expects widespread take-up in future.

Jordan believes consumer demand and willingness to pay for convenience will also force carriers to offer weekend and evening deliveries, which were previously considered too costly. 
“This industry is 10 years old, so one way or another, it’s time to overcome the delivery issue,” concludes Roper.

NEED FOR CHANGE