Published in "The Sunday Times" January 07, 2007Internet shopping hit by poor delivery
The sector has become a victim of its own success as 4m parcels fail to turn up. Report by Jenny Davey
ONLINE SALES may have gone through the roof this Christmas, but retailers failed to employ enough little helpers to make sure parcels were delivered to the right place at the right time.
A whopping 24m parcels from online retailers failed to get delivered first time and 4m failed to arrive at all, according to IMRG, the internet research company.
The shocking figure represents 12% of the estimated 200m parcels delivered to British homes this Christmas by internet retailers. Thousands of children are thought to have been left without presents.
Doing your Christmas shopping on the net used to be a civilised affair that allowed you to avoid hordes of shoppers on the high street. But as internet retailers have become overstretched, deliveries have suffered.
James Roper, chief executive of IMRG, said it was a “total nightmare” and said the failure rate was “completely unacceptable”. He added: “If you have a light-switch that works only most of the time, you think it is broken. But, unfortunately, it is regarded as acceptable by many retailers to have an internet delivery system that works only some of the time.”
IMRG is planning to name and shame online retailers that don’t perform by publishing league tables of delivery performance for the first time.
It has already begun a survey of 4m customers to find out how they believe the system could be improved. It also plans to champion online retailers that are performing well. Roper said most online retailers’ delivery services were “not good enough”, but highlighted Screwfix Direct, Comet, John Lewis and Home Delivery Network (which works for companies including Littlewoods and Tesco Direct) as the better performers.
IMRG has also created a fulfilment guide on its website which provides a list of delivery companies for retailers. In 2005, many internet shoppers had to be turned away by retailers who could not cope with demand.
Internet shopping has become a victim of its own success. Growing confidence in the web has prompted many consumers to leave orders to the last minute in the run-up to Christmas, which has put more pressure on their delivery services.
And the growth in internet shopping has led to thousands more lorries delivering parcels at a time when there is growing concern about traffic congestion and its impact on the environment.
Meanwhile, IMRG said that the record £183m spent in a single day online in Britain on December 4 was matched on December 11. It forecasts that online sales in the UK will rise by 40% to £42 billion in 2007, up from £30 billion last year.
Bumper online sales have contributed to a tough time for high-street retailers, which have already been hard hit by soaring rent, rates and wage bills.
But Verdict Research forecasts that retail sales growth will actually improve from 2.6% in 2006 to 2.9% in 2007. It also forecasts that cost growth will slow from 4% last year to 3.5% in 2007.
Richard Hyman, chairman of Verdict, said that boosting sales will be the key to success in 2007. “This really will sort the men from the boys and focus attention on who can sell and who is weak at selling,” he said.
Labels: delivery, internet shopping, parcel delivery