E-commerce Parcel Delivery: Problems and Possible Solutions

Europe Economics Blog
Jul 19, 2017

Online shopping and parcel delivery

The quality of parcel delivery has become extremely important as more and more people shop online. In the UK, 3 in every 4 adults made an online purchase in 2016, receiving in total over 1 billion parcels. By 2018, the e-commerce market is expected to grow by about one third, to reach 1.3 billion parcels annually. Cross-border shopping is also gaining pace as (in particular) younger consumers search and order goods online from other countries.

This growth in e-commerce means it’s not surprising that consumers are more likely to experience problems with the delivery of their order than before. The near-collapse of the parcel delivery market around Christmas 2014 may have faded from public memory but it definitely spoilt that festive season for many customers when parcel companies seemed to lack enough vans and drivers to deliver all items on time.

Typical problems with parcel delivery

Consumer surveys — including the latest study by Citizens Advice[1] — reveal that as many as two thirds of consumers are likely to have experienced at least one problem with their online shopping parcel delivery in the past year. The most common problem is not a late or lost parcel, as one might think, but the problem of the no-one-at-home slip. This is the situation when the consumer is at home, sometimes having taken a day off to receive the parcel, but all she receives is a slip through the mailbox saying that “the parcel could not be delivered as there was no-one at home”. As a result, the consumer either has to arrange re-delivery or travel to a parcel depot which is often at an inconvenient location and/or is open at inconvenient hours to collect the parcel. Another frequent problem is the parcel being left in an unsecure location (even if the parcel is not damaged, it has clearly been put at risk). Problems with late, missing or lost parcels trail these other two in frequency.

Unless the delivery problem leads to financial loss, e.g. a damaged or lost parcel, most customers are not inclined to report the issue to the seller or the courier company. Hence, most problems that adversely affect consumer welfare due to lost time and stress, such as the no-one-at-home slip or leaving a parcel in an unsecure location (without damage), remain unknown to the seller/courier and are not properly addressed.

Possible solutions

The e-commerce market is responding by developing alternative delivery methods such as click-and-collect option, delivery at specified hours or on Saturday, and placing pick-up boxes/parcel lockers at convenient locations, e.g. a local supermarket.

Is there something else that can be done to reduce problems and improve consumer experience with parcel deliveries from online shopping? There are several possible policy options to consider.

First, the Citizens Advice study shows that consumers that are confident in their knowledge of consumer rights are more likely to report the problem to the seller, even if their actual knowledge of consumer rights might not, in reality, be so good. Hence, a consumer awareness campaign might encourage consumers to report parcel delivery problems and so make these problems known to the sellers who, eventually, would have to address the issues in a systematic way.

Second, problems such as having to stay at home for parcel delivery or seeing the parcel left in an unsecure location can be effectively addressed by installing suitable parcel delivery boxes. These would eliminate the related problems by providing a safe and secure place to leave the parcel. While existing houses might need retrofitting to install such boxes, new houses could be mandated to have parcel boxes of a certain size.

Finally, Citizens Advice might aggregate data on delivery complaints from specific couriers so that market players, online retailers and consumers alike, have a better understanding about the quality of the delivery services employed. Publishing comparative data might, in turn, enable retailers to choose their couriers more carefully and enable consumers to complain more actively. Ultimately, delivery companies would be prompted to eventually improve the quality of their service, thereby increasing customer satisfaction.

[1]https://www.citizensadvice.org.uk/Global/CitizensAdvice/Post%20and%20Telecoms/Consumer%20Rights%20for%20Parcels%20Delivery%20-%20Final%20Report.pdf.



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