The Re-delivery Conundrum

Volt Technology
Sep 5, 2018 · 7 min read

by David Levy

One of the biggest challenges facing the e-commerce and delivery industry in general is the package re-delivery. The huge surge in online retail over the last decade has meant that there is a vast amount more to be delivered now and to be delivered fast. Taking it a step further, even in the last 2–3 years with the rise of same day delivery there has been an added demand for home delivery with customers ready and willing to pay extra to get what they want as soon as possible.

How much of a problem is a missed delivery for the consumer?

A recent study in the UK showed that over two thirds of people had experienced a general issue with a delivery in the past, with 38% saying that a parcel had not been delivered on time. In the US, a UPS study found that in 2016, 60% of customers had missed a delivery and needed to make rearrangements to get their goods.

As a customer you have a few options when choosing your initial delivery slot and the more specific you want to be about exactly when you want to get the parcel, the more it will cost you. Most companies won’t give you a time slot for delivery on any given day and most of the ones that do, won’t give it until the day of the actual delivery.

So, while 15% of people may choose to take a day off work to ensure they are home for the delivery window, most people do not want to give up a whole day’s holiday and take their chances. A lot of parcels get missed.

Once missed, the consumer is left with a few options, depending on the courier. Arranging a redelivery is probably the most used option but this isn’t always an easy, seamless process. Some companies have tried to make it easier to arrange a redelivery but in reality that doesn’t really fix the problem. Redeliveries work the same as the initial delivery so there is a possibility it could be missed again.

Another option the consumer may have is to go pick up their goods from a local depot of the delivery company. A study back in 2011 looking into the impact of the ongoing closure of post offices in the US found that consumers lived an average distance of 9 miles away from their nearest post office, an inconvenient distance to travel for something you have sometimes even paid extra for to be delivered to your door. And that is just the post office. There is no telling how far away you may be from your nearest FedEx or UPS depot.

So while having the choice to pick up your own parcel might be an OK option when choosing an initial delivery type, like with a ‘click and collect’ scheme for example, it does not represent a viable redelivery method for most consumers and even more so for eco-minded ones.

How much of a problem is a missed delivery for the retailer?

Even though the retailer may outsource the delivery work to a third party, consumers are still likely to hold the retailer ultimately responsible for a poor delivery service. And while not every missed package will be the third party’s fault, the customer is always right, so it is up to the retailer to make certain they are equipped to handle delivery questions and complaints. This, alongside potential refunds for customers who have missed packages through no fault of their own, can prove to be costly.

What is potentially more costly however, is the damage to a company’s reputation caused by regular complaints online about their service. According to ParcelHero, at least £5,300 in lifetime value of a customer is lost when a customer defects to another online retailers due to delivery qualms.

A similar study by Ecommerce Nation also found that delivery problems will have a negative impact for retailers, finding that 37% of online shoppers wouldn’t use the same online retailer again if they were dissatisfied with the delivery service.

And while huge companies like Amazon might be able to take the hit of a few disgruntled customers, smaller, especially independent companies can be hugely affected by negative feedback. It’s clear that retailers need to ensure that they are providing the best delivery service to their clients or else risk losing them

How much of a problem is a missed delivery for the courier?

The courier is at the center of this entire system. The rise in online retail has caused a massive boom in the delivery market and the industry has still not worked out the best way to manage the ever growing demand. We wrote in a previous article about how the Japanese delivery market nearly collapsed in on itself, and how having to re-deliver so many parcels every day was a big factor but It’s not just in Japan that couriers are having to work extra hours because of so many redeliveries. its common place in many big cities around the world.

There is a much bigger cost to the courier firm than you would think too. PCA Predict polled over 300 retailers in the UK and found that the average cost to the courier per failed delivery was £12.89 ($17.78). Not every failed delivery this report refers to ends up being a redelivery, some packages get damaged and some are lost and never make it to their destination. Many packages however do need to be re-delivered and it comes at an expense to the companies and people on the ground in charge of handing off the good to the customer.

Let’s not forget the environment

All these redeliveries add up and not just to a monetary expense. The environment suffers from the sheer volume of deliveries taking place the first time, so a redelivery or a trip by the customer to the local courtier depot just adds more traffic and pollutants into the mix.

It’s clear that the redelivering of packages is stressful and costly for everyone involved. While some have looked at trying to make the redelivery easier, others have looked at ways to negate to need to deliver to people’s homes at all. Neither of these however, are a solution to the actual problem causing this waste of time and money.

The way goods are being delivered in the last mile needs to be re-thought and that’s exactly what VOLT have been doing.

How is VOLT’s delivery different?

Volt Technology have developed a delivery platform based on blockchain and using AI to ease the stress currently being felt by the delivery industry and to hopefully drive redelivery numbers down to a much less significant amount.

Think Uber but without the centralized company taking a huge amount of the profits.

Messengers are self employed and can choose when, how and where they want to work on any given day. Someone could potentially just be going on a trip to see friends at the next town over and could log on to the platform to see if any parcels need delivering en-route. Because the platform is decentralized, messengers can expect to see an increased amount of profit for their time and thanks to AI figuring out pricing and optimized routes, messengers time will be better managed.

Good service will be incentivized by a rating system so the individual messenger is more likely to take care of the package and make sure to follow the delivery instructions, meaning less missed deliveries and therefore less redeliveries.

Consumers will be able to choose exact times and destinations for their deliveries and will be able to track the package in real time. This will hugely decrease the amount of missed packages.

Finally retailers are able to use a service like VOLT for a fraction of the price and with the piece of mind that they are offering a reliable, eco-friendly service that will almost always get to its customers first time. With so many companies going online to sell their goods this makes offering a next or same day delivery for small and medium sized business a viable option and gives them the ability to compete with the big companies.

Conclusion

When you consider the effect redeliveries have on the environment it is obvious that it’s not just those involved in the delivery process that are affected. The more online retailers work to make the home shopping experience more like an in-store one, the more we will see an increase in home deliveries.

The aim of the game will be to get deliveries in the hands of the consumers the first time, everytime and with companies like VOLT using the latest technology to make that a reality, we are definitely moving in a right direction for a redelivery-less future.

Sources:

https://www.bmmagazine.co.uk/in-business/advice/poor-delivery-service-means-companies-losing-e-commerce-sales/

https://postandparcel.info/93399/news/e-commerce/true-cost-implications-failed-deliveries/

http://www.frontierscs.com/business-del-infographic-missed-deliveries

https://www.theguardian.com/money/2017/nov/12/couriers-fail-deliver-retailers-surge-online-shopping

https://www.statsjobs.com/e-commerce-parcel-delivery-problems-possible-solutions/#_ftn1

https://www.citizensadvice.org.uk/about-us/how-citizens-advice-works/media/press-releases/two-thirds-of-online-shoppers-suffer-problems-with-parcel-delivery/

Volt Technology

P2P Delivery Platform based on Blockchain

Volt Technology

Written by

P2P Delivery Platform based on Blockchain

Volt Technology

P2P Delivery Platform based on Blockchain

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