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£146m – the cost of failed UK deliveries

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It’s obvious that having the right postcode on a parcel will help it to get there quicker. But now a new study has put a figure on the cost of failing to get the address right – and it makes for interesting reading.

Failed deliveries are costing the UK’s e-commerce businesses more than £146m a year because they don’t have the right addresses on their goods, according to the study, carried out by IT firm Postcode Anywhere and IMRG. The report calculates that that 5.8m items ordered online aren’t delivered first time because of an error in the address.

Postcode Anywhere managing director Guy Mucklow said: “It’s shocking that in this day and age we still can’t seem to fill our addresses accurately.”

But, he said, this wasn’t a customer fault – rather the blame lies with “poorly-put-together online forms and ill-conceived data capture”.

The research found that a delivery that fails because of an incorrect address costs an average of £25.50 to put right in terms of refunds, redeliveries and working hours spent. Averaged out, says Postcode Anywhere, the costs of delivery inefficiency add 70p to the cost of every single parcel dispatched in the UK and 75p for every delivery.

“Clearly,” said Mucklow, “there is a strong argument for e-tailers to take more care in how they collect customer information. It even affects customer service levels. As consumers we’ve probably all experienced the frustrating scenario of being forced to select a US state from a drop-down box or abbreviate words because they won’t fit in the fields.”

Our view: It’s obvious that an IT firm selling autofill address technology would argue that getting the address wrong costs money – but also interesting to see a figure put on the size of the problem. Efficiency in delivery grows ever more important as retailers look to drive down costs in order to compete in this area.

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