The Institute of Customer Service (ICS) estimates that during the last Christmas period in the UK over 16 million customers suffered delivery delays with items they had ordered and this was directly responsible for 73% of them avoiding the retailer that let them down last year. The average delivery delay was 5.3 days – an entire business week and long enough to ruin the festive season if a delivery really needed to be on time.
The average spend on delayed packages was £250. All this points to a combined set of major issues:
- Omnichannel; companies that want to offer an omnichannel experience where every channel is just as good as others cannot possibly tolerate delivery delays. If delays do occur then they need to be resolved in hours not weeks.
- Delivery is just part of the process; customers don’t see delivery as a separate process or detached from the retailer. When they click to order an item it is entirely the responsibility of the retailer to ensure that order arrives on time. Accountability cannot be outsourced to a delivery courier even if a courier is responsible for making the delivery.
- Retailers that want to excel may need to consider more expensive courier services or even owning some parts of the delivery process.
On this final point, Amazon is already investigating how they could build their own operation to rival Fedex and UPS. This may sound incredible – just imagine Amazon taking over the entire delivery process – but last year they spend almost $11bn with couriers. They are clearly trying to calculate if they could spend the same amount, or less, to deliver items without using a courier, but keeping complete control of the delivery process in-house.
As online retail becomes more popular and retailers strive to achieve the omnichannel target or letting customers shop for any item, anywhere, at anytime, delivery is becoming a genuine concern. Online retail requires a complex mix of delivery, returns, and an ability to plug into a supply chain so stock levels can be controlled even when outside the warehouse.
In the short term, retailers in the UK should worry first about the 73% defection figure highlighted by the ICS. If that’s correct then a lot of loyalty is destroyed over Christmas. Retailers need to manage customer expectations over deliveries to avoid disasters that ruin years of brand loyalty.
What do you think about the online shopping rush and how delivery disasters can ruin customer loyalty? Leave a comment here or get in touch via my LinkedIn.