£3.9 billion cost for UK retailers owing to delayed deliveries

20th Dec 2017

Bad experiences with Christmas deliveries can harm a retailer’s customer service reputation and hit finances, new figures released by The Institute of Customer Service have revealed.

More than a third of people surveyed suffered delayed deliveries in 2016, with more than half of their deliveries arriving five days later than expected. High-value products were significant in the results, with 42 per cent of people spending more than £300 with the retailer.

The estimated total cost of last year’s delivery mistakes is a £3.9 billion, according to a survey conducted by The Institute.

Jo Causon, CEO of The Institute of Customer Service, says: “Late deliveries are a recurring problem and it is getting worse year on year.”

Not delivering on time is particularly a problem over Christmas, and The Institute’s research highlights a correlation between punctuality and reliability of deliveries and customer retention. Nearly three-quarters of consumers are less likely to return to a retailer who doesn’t deliver on time.

UK public opinion suggests that a good delivery service is a basic expectation when buying online and 83 per cent do not expect to have to pay for a specific delivery time. “In an increasingly competitive market online – both throughout the festive season and beyond – retailers should prioritise providing customers with a consistent and reliable delivery service,” says Causon.

The effects of bad delivery service can continue long after Christmas, as Causon explains: “Failing to [deliver on time] could have a negative impact on a company’s reputation and sales the following year, with wider Institute research revealing that improvements in customer service could add £81.5 billion to the UK’s GDP in just 12 months.”

Problems with deliveries are costing companies every year. Both the retailer and the delivery company need to take responsibility, or face further financial losses the following year, says Causon. “There are several components involved in getting the customer’s delivery delivered on time and it should be a priority of the delivery service and retailer to ensure that this is done.”

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