Fixing Failed
Deliveries
Stamping Out Faulty Fulfilment

Contents
1

Failed delivery: counting the cost

2

The business impact of fulfilment failure

3

The downsides of delivery disappointment

4

Reduce friction to reap rewards

5

Business benefits of better addressing

6

Fixing failed deliveries

7

Finding your perfect match

8

Fix your failed deliveries with Loqate

We’ve surveyed over 3,000 global consumers and 300 retail executives to bring you ourlatest insight report: Fixing Failed Deliveries.
Find out the true business cost of faulty fulfilment and discover our simple steps to help you
boost operational efficiency, enhance customer marketing, and stamp out failed deliveries
for good.

1. Failed delivery:
counting the cost
It’s an exciting time for eCommerce as the dramatic shift to online
shopping gathers pace. In 2022, online retail is expected to accountfor a fifth of all global retail sales.1
The Covid-19 pandemic has prompted many
more consumers to buy products and services
online, accelerating a trend that was alreadywell underway. People are relying more on
eCommerce and expect fast and seamlesspurchase journeys - from checkout to delivery.
Businesses are reaping the benefit of thesegreater online sales volumes. Nearly 7 in 10 ofthem (69%) say their average online order value
has increased since the outbreak of coronavirus.
Meanwhile, business is also brisk across

Nearly 7 in 10
businesses (69%)
say their average
online order value
has increased
since the outbreakof coronavirus.

borders. Some 54% of firms report an increase ininternational orders during the past 12 months, while 45% of consumers say they havebought from an overseas firm in the past year. However, 55% of eCommerce customers sayinternational orders are more likely to experience delivery delays.

And therein lies the major issue threatening to derail this online
shopping boom.
Faulty fulfilment can mean dire consequences for eCommerce companies - not least
financially. In total, 68% of businesses state that failed or late delivery is a “significant cost”
to their operation. This has increased from when we asked the same question in a poll we
conducted in 2017, suggesting the problem is getting worse.

1

https://www.smartinsights.com/digital-marketing-strategy/online-retail-sales-growth/

Fixing Failed Deliveries | Chapter 1

In late 2020 we surveyed more than 300

for redelivery or offering customer

retail executives and over 3,000 global

discounts as an apology, the costs

consumers to assess their opinions of theof failed deliveries can quickly add up.

current online shopping experience. We
discovered that fulfilment problems canhave a big impact on businesses andtheir customers. If businesses are to fully
capitalise on the eCommerce bonanza,
they must fix failed deliveries.
After a failed delivery, most consumers
expect compensation. And many firms
feel this is only fair: 53% try to redeliver

After a failed
delivery, mostconsumers expect
compensation.

with 36% paying any additional courier
charge; 41% offer a refund; and 34%

In the US, 8% of first-time deliveries fail, atapply a discount.

an average cost of $17.20. In Germany, 7%

It’s clear that the problem of failed
deliveries is widespread, with 99% of
eCommerce organisations admittingsome deliveries go wrong and 24%of deliveries go wrong in the first instance,
costing on average €14.69 apiece. In theUK, it’s a 6% failure rate at an average costof £11.60 each.

saying more than 1 in 10 orders aren’t

Chargebacks are also proving costly.

delivered at the first attempt. What’s

In the US, each failed delivery brings a

more, 76% of the consumers wechargeback cost of between $1 and $20

surveyed reported at least one lateaccording to 45% of businesses. In the UK,delivery in the past year.

the proportion citing a similar cost per
failed delivery chargeback climbs to 55%,

Whether it’s refunding the delivery

and in Germany, it’s 54%.

charges to the customer, paying

Fixing Failed Deliveries | Chapter 1

It’s clear that failed delivery impacts revenue - but there is also potential damage to brandreputation and customer satisfaction and retention.
To understand how to deliver optimal order fulfilment, it’s vital to know what is going wrong.
Complexity for customers often begins at the address entry stage, with 41% of businesses
admitting that poor physical address data causes problems. This is made worse by thevarious ways eCommerce companies verify addresses: a third (33%) don’t check the data orleave it to the courier.

When addresses are inaccurate or incomplete, 41% of deliveries
are delayed, and 39% simply fail. The latter statistic alone iseye-watering: fulfilment failure is costly.
The solution lies in collecting more accurate data in an easy, frictionless fashion. Bestpractice involves implementation of address verification solutions that allow customers toprovide data that is as accurate as possible. The software strips away checkout frustration
and adds customer enjoyment.

Research methodology
The Fixing Failed Deliveries 2021 research was commissioned by Loqate andconducted in December 2020 by Censuswide, an independent research
consultancy headquartered in London.
We surveyed 304 retail executives – working across a number of categories
and based in the US, UK and Germany – about how they believe data quality
affects user experience. They are employed by companies with more than 50
employees selling products, services or subscriptions to consumers online, andhave responsibility for eCommerce, online transactions, CRM, marketing or
eCommerce platforms.
To support the research, 3,040 consumers who shop online regularly wereinterviewed in the same three markets to learn more about their online shoppingand order delivery experiences.

Fixing Failed Deliveries | Chapter 1

2. The business impactof fulfilment failure
Closer examination of failed deliveries reveals it is an international problem. eCommerceis on an incline, and shoppers around the world have become increasingly comfortablepurchasing from global brands.
But cross-border commerce comes with its fair share of challenges. Language barriers andnuances in address formatting can make fulfilment a nightmare for any global business.

The following table - displaying order volumes, failed deliveries and costs - shows the severe
financial effects of faulty fulfilment in each region.

Faulty fulfillment by region
Online orders per year

140,792

97,822

140,381% failed deliveries

8%

6%

7%

Cost per failed order$17.20£11.60€14.69Total failed delivery cost per year

$193,730£68,084€144,354

Based on similar research we published in 2017 – when the percentage of failed deliveries
stood at 5% in the US and Germany, and 6% in the UK – the latest results suggest a significant
increase in delivery problems.
Businesses are aware how vital data quality is for first-time delivery completion. Just under
half (47%) rate accuracy of physical address data “critical”. Tellingly, 74% of businesses statethat bad address data is the cause of up to a quarter of their deliveries failing.
Moreover, 71% agree that inaccurate delivery
addresses are a primary cause of failed
delivery. This becomes even more importantwhen you consider that many people enter
their details incorrectly, whether that’s due
to fat fingers on mobile devices ordifferences in address formatting whenbuying from overseas. The same proportionof businesses tend to agree that customers
often don’t realise a mistyped address can

71% of businesses agree
that inaccurate delivery
addresses are a primarycause of failed delivery.

cause a failed delivery. In those instances,address verification can provide avital failsafe.

Fixing Failed Deliveries | Chapter 2

If we consider the chart below, we can see the various ways inaccurate shipping data
affects businesses. There is obviously a great impact on delivery timelines, but it’s also
clear that retailers see lost sales and reputational damage directly resulting from poor
address data.
Business impact of inaccurate shipping addresses, according to retailers

Deliveries

Loss of Sales

Reputation

74%

Failed deliveries

73%

Late deliveries

69%

Cancelled orders

62%

Retailer must pay for redelivery

66%

Lost customers

67%

Online reviews

64%

Negative impact on brand image

74%

Poor customer satisfaction

There is widespread recognition that poor-quality address data and lack of verification
technology are primary causes of failed delivery with all the consequences they bring.
However, 34% of businesses across markets do not currently verify shipping address
information provided by the customer – which is concerning when the cost of failed delivery
is taken into account. Verification is poorest in the UK and Germany, where only 57%
and 58% respectively check a physical address during a customer’s online order completion.
This happens much more in the US (83%).

Fixing Failed Deliveries | Chapter 2

Techniques used by retailers to check addresses
Technique% of retailers

Internal address verification systems using thirdparty data e.g. Royal Mail/USPS/Deutsche Post

49%

Third-party address verification software

31%

Retailer checks address after order received

37%

While internal address verification systems

Third-party address verification data is also

may be a cheaper option, they don’t provide

built by aggregating multiple reference data

the accuracy and reliability of third-party

sources into a consistent and reliable single-

address verification software. Address

best-record, resulting in the most complete

verification software, on the other hand, canand accurate addresses.

capture, parse, standardise, verify, cleanse
and format global address data via a single
easy-to-integrate API, significantly reducing
late or failed deliveries.

To calculate how much your business could
save using address verification, visit Loqate’s
online delivery ROI calculator.

Fixing Failed Deliveries | Chapter 2

3. The downsides ofdelivery disappointment
Across geographies, the vast majority of consumers have had a poor delivery experience inthe past year. Consumer demand is at an all-time high and letting down your customers canbe all it takes to lose their favor for good.

US online shoppers are the worst hit, with just 13% receiving all of
their orders on time and 12% suffering fulfilment fails more than fivetimes in 12 months.
The situation is a little better elsewhere, although only 22% of British and German consumers
say everything arrived as expected.
Consumers told us which retail categories are most likely to let them down. When asked toname a type of product delivered late in the past year, their top five culprits were:
Top five culprits of late deliveries
Retail category% of shoppers

Fashion, clothing and accessories

45%

Health & beauty

24%

Technology

23%

Books/CDs/other physical media

22%

Groceries (food and drink)

20%

Fixing Failed Deliveries | Chapter 3

To make matters worse, some of these items can be expensive or – in the case of groceries,
for example – perishable if they don’t arrive on time. Customer satisfaction hinges on
successful fulfilment and there is clearly huge room for improvement.
To add to the retail categories where delivery failure is most prevalent, customers also
told us which devices seem to cause completion problems when they try to place an order.
Below is a snapshot of devices people have used to shop online during a recent
three-month period:
Devices used by customers for online shopping by age group

DeviceAge 18-24

25-34

35-44

45-54

55+

Smartphone

72%

81%

77%

65%

38%

Laptop

45%

43%

47%

48%

44%

Tablet

30%

28%

29%

22%

24%

Desktop PC

25%

27%

26%

29%

35%

Use of smartphones to place orders has increased more than any other device in thepast year, with 46% of consumers shopping via their phone more than they did 12 months
ago. However, 38% of smartphone users complain that ordering this way is harder than
shopping via a computer.
Those who have used a smartphone or iPhone to shop online in the past three months
encounter a range of problems - and often abandon their purchase as a result.

Fixing Failed Deliveries | Chapter 3

Smartphone shopping issues experienced by shoppers
Common issues% of shoppers

Problems entering my payment details

23%

Problems entering my order accurately

20%

Checkout process took too long

17%

Screen too small to see what I’m buying

15%

Difficulty entering or finding my homeor delivery address

13%

These issues suggest that better checkout technology is required. As well as address
verification software, tools such as bank verification, email validation and geolocation canhelp streamline the customer journey.
A total of 27% of consumers who use a smartphone to order online and have abandoned apurchase during the past three months did so either because they struggled to enter theirdelivery address or simply got fed up with the checkout process.

Failed or late delivery is immensely frustrating for customers andhas serious consequences for business.
It certainly impacts how people feel about retailers. Worse still, many are finding new ways
to complain – and the indirect routes are potentially most damaging to eCommerce firms.

Fixing Failed Deliveries | Chapter 3

When we asked consumers about why they think their orders arrived late in the past year,
41% place blame on the retailer and 32% think the courier is at fault.
Compensation expected by shoppers
Type of compensation expected% of shoppers

Being contacted by the retailer to sort out the issue

39%

Having the delivery rescheduled for free35%

Being contacted by the courier to sort out the issue

32%

Receiving a discount from the retailer as
an apology

29%

Receiving a refund for the order from the retailer

25%

Nearly all of these remedies carry a financial penalty for the retailer. But complaints can be
costlier. More than 1 in 10 customers (12%) are prepared to leave a bad online review of theretailer and a further 9% would publicly complain via social media.

Fixing Failed Deliveries | Chapter 3

The effect of negative reviews and comments on brand reputation cannot be overstated.
Nearly all consumers (93%) read reviews before making a purchase2, while just threenegative reviews can drive away nearly 6 in 10 potential customers (59%)3. It’s important toremember that even customers who remain silent, without leaving a negative review, may
not return.
That said, 71% of businesses recognise failed orlate deliveries cause customer dissatisfaction,and two thirds (66%) believe customers are
more likely to complain about delivery than the
product they bought. In addition, 63% are awareof the growing number of public complaints
about fulfilment issues.
Getting to the root of customer frustration is a
key step in the right direction of fixing failed
delivery. In fact, businesses that offer better
delivery can use it as a differentiator against
eCommerce outfits that struggle to fulfil theirpromises. Address verification can be a criticalMore than 1 in 10
customers (12%)
are preparedto leave a bad
online review of
the retailer and afurther 9% would
publicly complain.

component in delivering the highest level ofcustomer satisfaction achievable: customer delight.
2

https://www.qualtrics.com/blog/online-review-stats/3

https://cmglocalsolutions.com/blog/yes-negative-reviews-can-impact-your-business-but-you-can-overcome

Fixing Failed Deliveries | Chapter 3

4. Reduce friction toreap rewards
Half of consumers voice frustration at the process of filling in their address for an online
order, no matter the device they use. This increases to 56% of US consumers who find it achore. The figure is 52% in the UK but 40% in Germany.

It’s a big issue: 41% state they would abandon an order if they
couldn’t easily enter their address.
Issues faced by customers when inputting addresses

Common issues% of shoppers

Address not in dropdown list

21%

Address format changed post confirmation

19%

Address format unrecognised

18%

No international address option

13%

Address won’t fit field

12%

Almost 4 in 10 respondents (39%) claim they would abandon their online cart and seek thesame item from a rival retailer if they face address entry issues.
But it’s not all bad news. Retailers that get it right earn respect and loyalty. A total of 70%
of consumers say they’re more likely to shop online with vendors that offer a simple ordercompletion form.
Furthermore, 61% overall state they have more confidence in retailers who have their delivery
address details already stored, making ordering easier. In fact, this element builds trust;
42% of consumers believe retailers that offer an address autocomplete solution are moretrustworthy than vendors not offering this feature.
As 72% of consumers prefer to make repeat purchases with the same retailer, having address
data stored and ready to display during checkout is a powerful option.

Fixing Failed Deliveries | Chapter 4

5. Business benefitsof better addressing
In view of the challenges of failed delivery and the problems posed by disgruntled
consumers, perhaps it’s time for businesses to reassess whether their existing address
verification method meets current and future needs.
For any firms remaining unconvinced, consider the multiple benefits of improved data andbetter verification technology.

The illustration below shows that address checking helps retailers mitigate the cost of
failed deliveries.
Beyond that, however, there are crucial improvements to the customer experience, leading
to increased loyalty, reduced cart abandonment and fewer bad reviews:
Benefits of address verification, according to retailers

Cost

Marketing

Sales

33%

Reduction of failed deliveries

30%

Fewer fraudulent orders

26%

Reduced wastage/better cost management

33%

Increased genuine website registrations

30%

Greater brand loyalty

27%

More effective content personalisation

23%

Fewer negative online/social media reviews

32%

More repeat purchases

27%

Better customer onboarding experience

20%

Increased conversions

Broadly speaking, retailers attribute four main business benefits to their ability to ensure
accurate on-time delivery, arising from better address verification:
1.

Customer loyalty (84%)

2.

Staying competitive against rivals (81%)

3.

Serving domestic customers (81%)

4.

Serving international customers (68%)

At a time when online orders are reaching higher volumes than ever, with internationalpurchases and deliveries accounting for a substantial proportion of customer sales, accessto accurate data and proven address verification technology is crucial to business success.

Fixing Failed Deliveries | Chapter 5

6. Fixing failed deliveries
The cost of failed and late deliveries of customer orders placed online is undeniably
high, stretching from lost sales to damaged reputation.

We’ve seen that many businesses are built on shaky fulfilment
foundations, with a third (33%) using no address verification
software or processes, and more than 4 in 10 (41%) bemoaningpoor delivery address data occasionally or more often.
Online businesses want to deliver to their customers first time, every time. And address
verification is a proven solution to this problem, offering:• Data quality• Reduced costs• Great user experience• Global capabilities

Data quality
Get accurate address data at the point of entry, reducing the need to clean the data once
it’s in your database. More than half of firms (55%) admit they face challenges around theconsistency of address format in their databases.
Other customer data deemed critical to retailers
Customer data

% of retailers

Email address

40%

Phone number

35%

Payment details

55%

Currently however, consumers have some frustration filling in these details: 39% say entering
their email address is annoying; 40% for phone number; and 38% for payment details.

Fixing Failed Deliveries | Chapter 6

Reduced costs
Increase business efficiency by speeding up data entry, avoiding typos and the cost of failed
deliveries. With 60% of companies stating customers tend to blame them rather than thecourier for delivery issues, costs can soon mount up. This can be mitigated by having theright tools in place.

Great user experience
A simple, intuitive and quick way for customers
to enter address details at checkout to improveusability across web and mobile, will reduce
cart abandonment rates. Nearly two-thirdsof businesses (62%) believe address accuracy
will become a bigger challenge as more
people shop using their mobile phone.

Global capabilities
The ability to understand international address

More than half ofconsumers (56%) say
they would increase
their level of online
shopping if theyfelt more confident
about deliveries.

formats and capture that data correctly, in order
to meet the needs of customers everywhere, iscrucial. 55% of consumers say they aren’t particularly worried about entering their details,
indicating a belief that any mistakes will be corrected by the retailer. The onus is on
eCommerce companies to get it right.
More than half of consumers (56%) say they would increase their level of online shopping if
they felt more confident about deliveries - but 57% would be reluctant to use a retailer again
if fulfilment fails. These are powerful truths that highlight the need for address verification toride to the rescue of eCommerce firms’ delivery issues.

Fixing Failed Deliveries | Chapter 6

7. Finding yourperfect match
Between human error, the nuances of global address formatting, and a high rate of data
decay, getting a correct address can be an arduous task. These problems are compounded
when dealing with international, hard-to-address cities or rural areas with little to nosystematic address system.
Address verification software is the only way to overcome these factors and obtain verified
address data across the digital landscape, from online forms and checkouts to CRM andthird-party logistics databases.
So, how do you go about finding the perfect address verification provider to match yourbusiness requirements?

To help narrow your search, we’ve compiled 10 questions you
should be asking when talking to a potential provider.
1.

How often do you update your data?
If they’re not updating their data daily, you could be missing out on thousandsof addresses.

2.

Will your data and website be protected if something
goes wrong?
Ensure your provider has a published privacy and security policy.

3.

What is your uptime?
If one your supplier’s servers goes down, make sure your service won’t
be interrupted.

4.

Does your technology have fuzzy matching?
Fuzzy matching recognises common typos and auto-suggests the correct address.

5.

Where do you get your data from?
Look for a supplier with legitimate relationships with reputable data sources.

6.

Do you operate globally?
Find a supplier who can offer data coverage for the areas you cater for.

7.

How long will the software take to integrate?
Can they offer a sample code to test its functionality with your existing system?

8.

Do you offer back-end address verification?
A good supplier should offer this cleansing and enhancing solution.

9.

What other services do you offer?
Can they offer geolocation, or email, phone and bank verification?

10.

How robust is your platform?
Find out how global, resilient, and secure the provider’s platform is.
Fixing Failed Deliveries | Chapter 7

8. Fix your failed
deliveries with Loqate
We are the world’s most trusted location intelligence specialist.
Our purpose? To help every business in the world reach every customer in the world.

Combining leading technology with the richest global data, wegive organisations across the globe the precision and reliability
they need to give their customers the best possible experiences.
With an easy-to-integrate product portfolio – including address verification, email andphone validation, and data cleanse – we’ve helped over 19,000 businesses boost sales,maximise operational efficiency and grow their customer base.
Our global API is available in 130 different address formats, 3,000+ languages, and 245
countries and territories. To provide global coverage, our address data is sourced fromsuppliers including United States Postal Service, Canada Post, Australia Post, the UK’s
Royal Mail and a host of other best-in-class and official providers.
Interested in finding out how address verification could transform your business?
Contact us today to chat to one of our friendly advisers or sign up for a no-obligation
free trial.

“Since using Loqate, we have definitely seen a decrease in failed postal deliveries due toinaccurate address data. Its deployment also has an impact on improving customer user
experience by cutting down key strokes and speeding up the order process.”“As the wholesale eCommerce side of the business grew, failed deliveries caused us a big
headache. Using Loqate has helped us to reduce these failed deliveries and improve thecustomer journey significantly, which is exactly what we set out to achieve.”“We know that address verification from Loqate has helped to improve the customer
journey and data quality which has had a positive impact on conversion anddelivery rates.”

Fixing Failed Deliveries | Chapter 8

loqate.com@loqate