Are you spending excessive time managing suppliers when a customer complains about a lost parcel? You’re not alone. In fact, 1 in 8 Australians have experienced the frustration of a lost parcel. This means, up to 12% of your customers aren’t receiving their packages! The worst part? It’s costing your business money.
It’s not just a cost of goods issue either. Lost parcels also lead to lost time and impact customer satisfaction with more and more consumers taking their business to your competitors
In this article, I’ll be exploring the real impacts of unreliable freight companies.
The Financial Impact of Lost or Damaged Parcels on Retailers
You’re footing the bill
When a parcel is lost or damaged, retail brands face several financial implications.
When a parcel takes an unexpected detour or decides to play hide-and-seek, you may have to step up and replace the lost or damaged items. But, there’s a twist: it’s not just about replacing one item. You’ll have to foot the bill for the replacement and the original item. It’s like a buy-one-get-one-free deal you never advertised.
Refunds and re-delivery add to the cost
If the lost or damaged parcel is beyond replacement, you might find yourself in the land of refunds.
When parcels get lost during transit, retail brands must also bear the burden of additional shipping costs. The expenses start piling up! You may need to resend the order to your eagerly waiting customer using alternative methods that guarantee a prompt delivery. Extra fees, anyone?
Insurance doesn’t protect your margins
You might be thinking ‘I have insurance for that!’. But, even with insurance coverage, you’re not completely off the hook. Often you’re required to pay a certain amount before the insurance coverage takes effect.
Customer Trust Is at Risk When Parcels Go Missing
You’re losing customers
Being able to keep customer promises is a huge part of a successful online brand. If you claim “2 day delivery” you want to be able to rely on your delivery service to be able to achieve that.
Yet, delays or missed deliveries are more common than delivery companies care to admit. This can cause frustration and disappointment among customers who were expecting their items to arrive on time. This is especially problematic for customers who ordered products for time-sensitive events.
Damaged parcels erode future confidence
Or maybe, the customer is eagerly waiting for their package, but it arrives damaged and incomplete. The drama of lost or damaged parcels can put a dent in the confidence customers have in future orders.
Dealing with lost or damaged parcels also poses inconvenience and hassle for customers. We can all relate to the frustration of spending hours on the phone, desperately trying to explain to customer service what happened to your long-awaited package.
The repercussions go beyond mere inconvenience. Lost or damaged parcels can shake the very foundation of trust between customers and the brand. When promises are broken, doubts start to creep in. Customers question the brand’s reliability and they may actively seek out alternative brands that they perceive as more trustworthy. This loss of confidence can have a significant impact on the brand’s revenue and market share.
The Operational Burden of Delivery Issues on Your Team
Your team’s resources could be better allocated
As customer service reps investigate each delivery issue, they find themselves in a time-consuming dance of communication, tracking, and resolution. Dealing with inquiries, complaints, and requests related to delivery issues takes huge amounts of time. This diverts resources away from attending to other customer needs.
Often, retailers find that they must allocate extra resources to investigate, coordinate with shipping carriers, examine tracking information, and identify the cause of the problem.
Meanwhile, in the depths of the inventory room, a different kind of resourcing issue unfolds. The retailer must update their inventory records. They must identify any discrepancies resulting from the loss or damage, and replenish the affected items. This process can be time-consuming. It requires resources for inventory management tasks like stocktaking, reordering, and restocking.
Process improvement requires additional investment
When lost or damaged parcels become a frequent problem, retail brands must invest extra time and resources into improving the situation. This may include training their staff, refining processes, and implementing better practices.
Lost and Damaged Parcels Don’t Have to Be the Norm
If you add all of these additional costs together, what would it be costing your business per annum? $50,000? $60,000? Retail brands can turn these challenges into opportunities for growth and improvement on their shipping services. AMS eGroup is one of Australia’s leading ecommerce parcel distribution companies that can help you with your revenue loss due to lost and damaged parcels. With dedication and strategic approaches, the path to a seamless and reliable parcel experience lies ahead, ensuring a bright future for both retailers and their customers.
Ask us how: https://www.amsegroup.com.au/contact/
