Christmas proves costly as retailers fail to deliver

21st Dec 2016

While millions of people will have scrambled this week to make the last posting dates for Christmas, The Institute of Customer Service has revealed that UK retailers could be missing out on more than £3bn due to delivery failures over the festive period.

A survey undertaken by The Institute discovered that 16 million UK customers experienced delays with their deliveries last Christmas. The average delay facing frustrated shoppers was 5.3 days.

Almost three in four (73%) of those customers affected by the delays decided to avoid the offending retailers this year as a result. With consumers saying they spent an average of over £250 with retailers who failed to deliver on time, this represents a significant loss in takings for those retailers.

It also underlines the cost of failing to deliver at this time of year. “There is a real emotional cost to consumers when deliveries go awry – particularly around the Christmas period when customers are anxious to receive Christmas presents and festive purchases on time,” says Jo Causon, chief executive of The Institute of Customer Service. “This emotional cost can soon become a real cost to retailers when customers lose trust and take their business elsewhere.”

Causon urges retailers to take The Institute’s findings seriously, as failings arising from retailers’ own processes or chosen logistics suppliers could have serious implications for their own bottom line. “Our research shows online shoppers are prepared to vote with their wallets and take their custom elsewhere if deliveries – a crucial part of the retail customer service experience – are not up to scratch,” she says.

Reputational damage

The Institute’s survey also found that retailers delivering late face reputational damage as well as financial. Nearly three fifths (57%) actively discouraged family and friends from using the offending retailers, while more than half (52%) posted negatively about the retailer on social media.

“When it comes to online, shoppers have so much choice – they are no longer limited to what is on their high street,” says Causon. “This means the consumer is increasingly powerful and able to desert companies when service isn’t measuring up – and companies may only get one chance to show they can deliver. Best practice when it comes to online retail, therefore, needs to focus on getting it right first time.”

This year’s UK Customer Satisfaction Index (UKCSI) data shows a clear correlation between organisations that get it right first time and their overall UKCSI score. On average the UKCSI score is 82.7 for those organisations where customer service was right first time, but when this did not happen, the score drops to an average of 59.

“Indeed, our UKCSI also finds that most complaints result in overall customer satisfaction that is lower than the UK average,” adds Causon. “Key priorities for businesses, therefore, are to prevent problems occurring, conduct root cause analysis on types of complaint to avoid reoccurrence, and ensure the full customer journey is seamless, from landing page to aftercare.”

Click here to read The Institute’s press release about its survey.

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