The Cost of Failed Deliveries for eCommerce Businesses

The UK has, by a significant margin, the largest eCommerce market in Europe. According to IMRG’s Valuing Home Delivery Review 2014, the total cost of delivery failures for UK e-retailers was estimated to reach £771 million.

While this is a striking figure, there is encouraging progress. The overall cost of failed deliveries has fallen by around 50% over the past two years, largely driven by innovation from courier and delivery providers. Improvements such as more accurate delivery time-slot predictions, out-of-home delivery points, and weekend delivery options have all played a key role in reducing missed deliveries.

Why delivery failures still matter

Despite these advances, failed deliveries remain a major operational and financial challenge for eCommerce businesses.

Andrew Starkey, Head of Logistics at IMRG, highlights the scale of the issue:

“Delivery failures resulting from orders placed with retailers and online merchants each year amount to more than £1bn in avoidable costs. Recent innovations in B2C have reduced delivery costs, providing buyers with a wider range of carriers, collection services and more information about where and when they can expect their deliveries.”

In other words, while progress has been made, there is still significant opportunity for retailers to improve delivery performance and protect margins.

What counts as a ‘failed delivery’?

Within the IMRG study, delivery ‘costs’ are defined as a combination of operational inefficiencies and customer-facing issues, including:

• First delivery attempt failures, requiring a second delivery attempt

• First delivery attempt failures, resulting in customer collection

• Late deliveries, impacting customer satisfaction

• Lost orders, requiring a replacement shipment

• Undelivered orders returned to sender

• Refunds issued for defective or undelivered products

Each of these outcomes not only increases fulfilment costs, but can also damage brand trust and customer loyalty.

Reducing failed deliveries with the right strategy

For eCommerce retailers, reducing delivery failures isn’t just about cost control — it’s about delivering a better customer experience. Choosing the right carrier mix, offering flexible delivery options, and using data-driven insights can all make a measurable difference.

Whistl Parcels works with retailers to design smarter, more resilient delivery strategies that reduce failures, improve first-time delivery success, and keep customers informed every step of the way.

Find out how Whistl Parcels can help improve your delivery strategy by completing our callback form.