How to Manage Failed Deliveries

A quarter of businesses see 10% of orders experience a first attempt failed delivery. That means the carrier tried to deliver an order, but the customer did not successfully receive it. Sometimes the carrier or the customer can be at fault for a failed delivery, but in any case, it’s the e-commerce retailer that pays the biggest price.  Not just on the sunk cost of the shipment and return, but also the effect on customer experience, which can negatively influence repurchase rates.

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The Impact of Failed Deliveries

The average cost of a failed delivery in the U.S. is about $17.2 and £11.6 in the UK. This can hugely impact margins, particularly in categories where the average order value is less than $200, such as apparel, accessories, automotive parts, office supplies, toys, and hobbies. This impact is even more dramatic for e-commerce retail brands whose orders average less than $100. This includes orders for flowers and gifts, food and beverage, and health and beauty.

What’s more difficult to measure is the cost of a lost customer, which depends on how much each brand spends to attract a new shopper. We know most brands typically lose money on the first buy. So, gaining trust during the first delivery experience is critical to driving repeat sales and profitability.

Why do packages fail to deliver?

There are many reasons that a delivery attempt might fail. Some of the most common reasons are:

• The delivery is recalled by the sender
• Not collected in time from a parcel locker or parcel shop
• Customer refused acceptance of the package
• Customer was unable or unwilling to pay cash on delivery (COD)
• Customs processing was unsuccessful
• The address was incomplete or inaccurate
• The delivery is damaged beyond repacking
• Force majeure, like significant weather events
• The recipient could not be met, and a signature was needed
• The driver could not find a secure spot to leave the package

How to manage failed deliveries

The key to managing a poor delivery experience is to try and prevent failure to deliver in the first place. Here are five steps e-commerce brands can take to reduce failed delivery rates:

• Give an accurate delivery date prediction on product pages and at check-out. Knowing when an important item will arrive can help customers plan for the best delivery time and location.
• Consider offering click & collect, otherwise known as “buy online & pick up in store” or curbside pickup. Customers don’t have to be available to receive a delivery and can collect it at a convenient time. Brands can create a communications flow to remind customers to pick up orders during the specified window.
• Real-time order tracking can help customers keep up with any changes to the delivery estimate, so an early or late delivery is not a surprise.
• Some carriers allow customers to change an address or reschedule a delivery while the package is en route. Add an easy-to-find link to the carrier’s website for in-flight rerouting options on the branded order tracking page.
• A well-thought-through post-purchase communications journey can prevent failed deliveries. Brands should include an order confirmation notice in the customer journey with full delivery details to help customers spot any address or delivery errors quickly. Out-for-delivery notices are also critical. Another option is to add an SMS alert sign-up to order tracking pages so customers can receive in-the-moment alerts.

How can retailers fix failed deliveries for customers?

Even with all the prevention efforts covered, there will still be times when failed deliveries can’t be avoided. Here are a few tips that can help retailers boost customer satisfaction:

• Retailers should add unsuccessful delivery alerts to the customer journey flow. These messages should communicate the next steps such as when the carrier will re-attempt delivery, if the customer can request a redirect, or if the package has been rerouted to a pick-up location. In the case of redirects and rerouting, make sure to build in pick-up reminders with extra details like opening hours and a map for easy directions.
• Set up a watchlist, alerts, or automatic ticket creation for customer service. When agents can view tracking information, they can be more proactive about problems such as incomplete addresses. For VIP experiences, they can reach out to customers to help reschedule or reroute deliveries or resend expedited orders.

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• Brands should also create customer journeys for any failed delivery that is caused by loss or damage. In these cases, retailers could send messages with offers for refunds or discounts to make up for the poor experience. Another option would be to alert customer service so they can send a replacement package and start any claims processes.

With these tips, e-commerce retail brands can prevent and fix failed deliveries, reduce costs, and improve customer experience. parcelLab can make it all possible with our Engage product suite that empowers personalized communication journeys and advanced analytics to find and act on any unsuccessful delivery attempts.