Fulfillment

StellaService Study: One In 10 Ecommerce Packages Arrives Damaged

You’re eagerly awaiting that new pair of boots to arrive on your doorstep, but when they finally do the cardboard shipping box looks like it’s been bashed like a piñata. Damaged packages have a lasting negative impression on customers, and StellaService data shows that it’s happening to one in 10 shipments.

From a customer experience perspective, the last mile of online orders are notoriously difficult to control whether you’re a small retailer, a mass merchant or somewhere in between. Regardless of whether it’s being delivered by white glove, carrier, courier or the Postal Service, that crucial moment of getting the package in the customer’s hands can secure a customer for life, or leave your shopper steaming mad.

In advance of the holidays, we examined more than 3,200 packages received by StellaService Analysts to see which carriers have the highest percentages of damaged packages and how many products were damaged as a result.

United Parcel Service (UPS) delivered the highest percentage of damaged packages of the three carriers evaluated at 11%. But it’s not all bad news — 19 companies had zero damaged packages in this study including behemoths like Rakuten.com, Target.com and Walmart.com.

Retailers negotiate an acceptable rate of damaged products with vendors, typically around 5%. But, damaged packaging service level agreements (SLAs) aren’t a common item in those contracts. And this study found that just 36% of the retailers evaluated had a damaged package rate of less than 5%.

Of the 313 damaged packages, 16 products were damaged, or 5%. If your customer isn’t already frustrated enough, now they’re dealing with a broken product that needs to be returned. Perhaps retailers should consider negotiating service level agreements for damaged packages.

Damaged Package Results By Carrier

  • UPS: 11%
  • USPS: 10%
  • FedEx: 7%

Retailers With Zero Damaged Packages

The following retailers had no damaged packages in this study. (Link jumps to the retailer’s StellaService profile page.)

Key Takeaways for Retailers

  1. Know your competition, including their approach to packaging. 
  2. Know your carriers, and the terms of your contract. Retailers must guard their brand experience by making sure carriers are meeting SLAs for damaged packages.
  3. Consider negotiating a damaged package SLA with your carriers.
  4. Thoroughly test your packaging. Art.com has dropped oversized boxes off its facility’s second story to determine reliability and employs 3rd party testing to ensure that packages arrive safely and in good condition.
  5. Re-evaluate your packaging options at least twice a year. Amazon has more than 40 types of boxes — take a step back to evaluate your options and whether they’re relevant for your most common orders — and have a plan for those uncommon order sizes as well.
  6. Use a 3rd party as a watchdog for SLAs in vendor contracts.

Methodology

StellaService Analysts ordered a total of 3,234 total packages from 121 retailers from January to September 2013.

Written by Adriana Dunn.

Photo: Tracey Adams/Creative Commons license.

Previously on Happy Customer:

Want more studies like this delivered straight to your inbox?
Sign up for the Happy Customer weekly newsletter.

Add A Comment

Your email address will not be published.