For retailers to be successful, it is critical to deliver the right product to the right customer on time and in good condition.
Any inaccuracies, delays, or misses in the last mile deliveries have a disastrous impact on customer satisfaction, brand image, and bottom lines.
Let us take a look at the top 10 impacts of missed deliveries and how last-mile delivery tracking software can help prevent them.
- Increased Penalty Costs:
- Following a missed delivery, consumers today expect either a discount as an apology or a refund of the delivery charges (shipping costs) from retailers.
- These penalties increase the overall logistics cost for retailers.
- Increased Operational Costs:
- For every missed delivery, retailers have to pay additional costs for redelivery, including:
- added fuel cost
- transportation cost
- lost space on the delivery van
- additional cost of manpower
- additional telephone calls to customers to get the information for scheduling redelivery
- increased customer support calls
- Customer Dissatisfaction:
- When faced with a negative delivery experience, unhappy customers will never trust the retailer again and will avoid shopping with it anytime again in the future. So, if delivery gets missed, it could mean be the last purchase made by the customer.
- Dissatisfied online customers will quickly turn to competitors if their last-mile delivery experience falters in any way.
- Damage to the Retailer’s Brand Reputation/Perception:
- Missed deliveries not only have cost implications, but they can also hurt a retailer’s brand reputation. Poor brand perception results in the loss of repeat customers and failure to attract new customers.
- Poor Online Reviews & Ratings:
- Online customers are very swift in voting or rating a company/retailer with their clicks based on their experiences.
- With a negative delivery experience, many customers end up posting negative reviews on social media and forums that dissuade potential buyers from buying from that retailer.
- So, when you lose existing customers due to missed deliveries, you can expect negative online reviews or negative word-of-mouth publicity, which will make it harder (and more expensive) for you to acquire new customers.
- Decreased Customer Retention Rate:
- Customer Retention Rate (CRR) measures the percentage of customers that still shop with a business during a specific period. Studies indicate that increasing your customer retention rate even by 5% could lead to increased profits by 25% to 95%
- However, late or missed deliveries drastically decrease the customer retention rate of a business because most customers who have a negative delivery experience tend to abandon a business rather than stay on.
- Increased Cost of New Customer Acquisition:
- Missed deliveries also increase your Customer Acquisition Cost (CAC). CAC is the cost of convincing a potential customer to purchase a company’s product or service. CAC includes the cost of marketing, advertising, and sales.
- For any retail business, acquiring a new customer costs anywhere from five to twenty-five times more than retaining an existing one. So, any loss of an existing customer would mean an increased cost of new customer acquisition.
- Lost Revenues:
- An existing customer will buy more from you and will also recommend your business more than a new customer. But when deliveries get missed or delayed, customers abandon shopping with that retailer altogether.
- The customer stops not only online but in-store shopping as well.
- So, loss of existing customers due to missed deliveries would result in loss of substantial revenues.
- Increased Reports of Frauds:
- Another major problem with missed deliveries is false reports of stolen or lost packages. As a result, retailers lose a significant percentage of their annual revenue to fraudulent activities attributed to stolen and lost merchandise.
- Increased Environmental Damage:
- Missed deliveries lead to increased greenhouse emissions occurring during redeliveries. Every time delivery gets missed at the first attempt, the additional redelivery attempt(s) or customer driving to the depot to retrieve the package contributes to carbon emissions.
- Environmental experts estimate that with one billion missed deliveries annually, the total amount of carbon emitted due to redelivery is 3,742 metric tons, which 9,050 trees would have cut off over 58 years.
How Technology Can Help Prevent Missed Deliveries?
Technology-based logistics solutions provide dynamic route plans, accurate ETAs with live track-link for customers, last-mile carrier tracking, and much more.
These features ensure time-definite deliveries on customer-preferred delivery windows, thereby preventing late or missed deliveries. These further help to reduce logistics costs, enhance the last-mile delivery experience, and increase brand loyalty.
For retailers, the only way to reduce logistics costs and offer a quality delivery experience is by ensuring in-time definite deliveries using technological solutions like the last-mile tracking software.
So, are you ready to implement a real-time last-mile delivery tracking software to prevent missed deliveries to customers in the first attempt?