Supply chain · 15 December 2017

Delivery delays see online retailers lose out on £3.9bn in Christmas sales

Right on time
20 million online shoppers encountered delivery delays last Christmas

Some 20 million shoppers encountered delivery delays during the online Christmas shopping period last year, new research has found.

These delivery delays translated into possible costs amounting to as much as £3.9m in total for UK retailers – a 13 per cent increase on the same figure from the year before.

According to a survey, in 2016 over a third (38 per cent) of UK online shoppers received Christmas deliveries later than expected, with more than half (52 per cent) of deliveries arriving up to five days late.

A significant proportion of customers experiencing delivery delays miss out on high-value items. Some 42 per cent of online shoppers spent more than £300 with a retailer who failed to deliver their items on time.

Read more: High street retailers urged to meet consumer demand with same-day delivery options

The data, published by the Institute of Customer Service, suggests that these experiences influence the perception customers have of retailers.

The more delivery delays shoppers encounter, the less likely they are to return for their Christmas shopping the following year. There is therefore a direct correlation between retailer punctuality and reliability of deliveries, and customer retention.

In a clear indication that delivery delays result in lost customers, the research found that almost three quarters (71 per cent) of online shoppers admit they’re less likely to buy again from a retailer that fails to deliver on time.

The Institute of Customer Service’s CEO, Jo Causon, said: “In an increasingly competitive market online – both throughout the festive season and beyond – retailers should prioritise providing customers with a consistent and reliable delivery service. Failing to do so could negatively impact their reputation and sales the following year.”

The research emphasised that among consumers, a consensus had grown that a quality delivery service is a basic expectation when buying online. As many as 83 per cent of online shoppers said they wouldn’t expect to have to pay for a specified delivery time.

Another study from the Institute of Customer Service found that improving customer services, including those to do with delivery delays, could add as much as £81.5bn to the UK economy in just one year.

“Late deliveries are a recurring problem, and it is getting worse year on year,” added Causon.

“There are several components involved in getting the customer’s delivery delivered on time and it should be a priority of the delivery service and the retailer to ensure that this is done. Both businesses need to take responsibility, or face further financial losses.”

Read more: Amazon brings in local London shops to Prime Now delivery service

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Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.