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  • Nariman Raouf

The Actual Cost of Delayed Deliveries

Unfortunately, one of the most time-consuming and irritating problems facing European e-commerce is late deliveries. It works both ways, benefiting both retailers and customers. Over 65% of businesses, according to a survey by Norma LIVE, incur significant costs due to late or unsuccessful deliveries.

Retailers who operate their own delivery fleet and work hard to meet next-day delivery targets without hurting their bottom lines will find this especially frustrating.

This article will go over the ways in which late deliveries can affect your business, in addition to some strategies you can use to fix the problem and keep your customers satisfied.

How are crucial metrics affected by late deliveries?

1. Acquiring new customers now costs more

The customer acquisition cost (CAC) in e-commerce businesses is the cost you pay to win over a new client. All marketing and sales expenses are considered together. A higher CAC means that you will need to charge your customers a higher price for your service or product. The cost of customer acquisition rises when goods are late and unsatisfied customers take their frustrations online. If this is the case, then your service will become unaffordable and out of reach for many people.

2. A decrease in consumer retention

By using the customer retention rate (CRR), you can determine what percentage of your first customer will keep buying from you after the trial period ends. Customers who have bad experiences with your company due to late deliveries will reduce your CRR.

3. Shipping delays demonstrate the company's disorganization

Deliveries that are late are a reflection of internal business issues. It can be a sign of supply chain inefficiency. Deliveries might be made more quickly if processes were streamlined and your resources were utilised more optimally.

4. Reputation harm leads to lose customers

Your company's image might be damaged in multiple ways. Social media can be useful for businesses, but customers can use it to harm them by leaving bad reviews. Zendesk reports that if a customer has a negative experience with a company, 50% of them will post about it on social media.

Tips to reduce late delivery costs and increase the lifetime value of your customers

  • Manage customer expectations: Plan and make modifications quickly to meet delivery deadlines and notify customers of delays in advance.

  • Make sure that your delivery partner is held responsible for being late. If your delivery partner is late, ask for a refund. Considering this won't stop customer reviews.

  • Use a route optimization solution: In order to ensure that deliveries are delivered efficiently, some route optimization solutions can help you map out your routes in real-time.

  • Use command and control features to track routes and deliveries. After you plan your route, delivery management software may execute it in real time.

  • Inform customers of the package status: Make sure they know if there's a chance of late deliveries, and then do everything you can to avoid any delays.

  • Analyze the reasons for any delays and monitor the shipping firm's productivity. Prevent another occurrence by implementing the appropriate modifications.

How can Norma assist you in establishing long-term client relationships?

Norma LIVE is an artificial intelligence (AI)-based delivery route planner that eliminates the need for time-consuming manual planning across multiple logistics sectors, including e-commerce. Using a combination of artificial intelligence and machine learning, Norma LIVE can plan the optimal route for you. The logistics distribution operations, delivery management, and daily plans can all be optimized with its help. By quickly analysing prior deliveries, you can draw useful conclusions and improve future deliveries.

Download the white paper "5 Tips to Scale Your Last-Mile Delivery Operations" to find out several tips for last-mile delivery options you can use to scale your business.


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