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Preventing Failed Deliveries...

Soaring demand for home delivery is not in dispute, but doing it profitably still remains the elusive golden chalice - much to the frustration of consumers, retailers and carriers alike. The major reason of higher home delivery cost for retailers is the number of orders that are not delivered in first attempt. Failed deliveries have always been a cause for concern but recently it has become more significant due to the increase in the number of people shopping from home. According to IMRG press release, retailers in UK alone loose nearly GBP 1 billion due to failed home deliveries. Of the total number of home delivery orders, about 17% orders are not delivered successfully in the first attempt, simply because there is nobody at home to collect the delivery.

From retailers' perspective, failed deliveries don't just add up to the cost. Delivery experience and delivery offer could influence home shoppers' choice of retailer and poor delivery experience may stop them shopping again with a particular retailer. There is a green angle as well. Multiple attempts to deliver a single order increases CO2 emission. From customers' point of view, a failed delivery means they have to collect the order from depot, thus missing the whole convenience of home delivery.

So, how should retailers plan home deliveries that are cost-effective to operate, yet meet the recipient's needs as precisely as possible? Do they need to relook at delivery related SOPs or they need a better route scheduler and order management systems? The probable answer is both.

A lot of retailers provide nothing better than the single option of a three- to five-day delivery window to the customers. Vague, week-long delivery windows are certainly no longer appropriate. The one-size-fits-all service needs to be replaced with a range of delivery options to suit different customer needs. Offering 1 hour delivery time slot with specific date or providing options like early morning delivery or late evening delivery will narrow down the chances of customer being out. For this retailers need a carrier capacity management system which can offer narrow delivery window and can monitor capacity availability for the time-slot.

Change in Standard Operating Procedure of order taking (at POS) to capture mobile phone number can result in lesser number of failed deliveries. Sometime back, when I was implementing order management solution for one of the home delivery retailers, my colleague from client team informed me that only 56% of their orders have mobile number captured on them. Considering that over 80% of population (in US and Europe) has access to mobile phone, this was one of roots causes of failed deliveries. Later, when SOPs were amended to capture mobile number at the time of taking order, client saw increase in successful first attempt deliveries. Mobile phones are great for contacting busy customers who are on the move. Getting in touch with customer the day before or on the day of delivery means customers are more likely to be at home when delivery van arrives.

Retailers can also look at alternate delivery options in case customer is not available at the time of delivery. Locker banks, Drop-off & Collection Shops, Technology Drop boxes or even leaving delivery to neighbors' doorsteps with prior permission from customer can help in reducing number of failed deliveries. In case retailer is using multiple third part carriers, providing customer an option of selecting carrier can be helpful. Customer may prefer a specific carrier over others (usually because the depot is too far away or they know that the service is wanting).

Finally, the key of achieving first-time deliveries is an effective communication with the consumer and a flexible approach. what do you say?

Comments

Nice Article Pankaj!! IMO offering 1 or 2 hour Specific delivery slot (rather than the full day) right at POS or delivery date booking would help the cause. Retailers like ASDA-Direct that offer two hour delivery slot have better first-attempt delivery ratio. DCM / TMS systems that allow the retailer to offer more specific delivery slots are the need of the time.

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