Every year, failed deliveries cost retailers billions of dollars, frustrating customers and putting brand loyalty at risk. Up to 20% of e-commerce packages don’t make it to the customer on the first attempt (Harvard Business Review), and each failed delivery costs retailers an average of $17.20. For businesses, that quickly adds up: 24% report that more than 1 in 10 deliveries fail on the first try (Loqate).
One major culprit? Address and geocode issues. According to Loqate, up to 25% of delivery issues are caused by incorrect address data.
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With 94% of shippers seeing last-mile delivery as a driver for growth, the need for precise address and delivery accuracy is obvious. Shippers who prioritize precision see impact: a 10.6% boost in average order value, an 8.9% rise in conversion rates, and a 15.3% jump in Net Promoter Score (NPS) thanks to happier, more loyal customers (Incisiv). To meet these high expectations, brands are choosing technology platforms built to deliver 100% on-time delivery (OTD), focusing on accuracy at every step.
When OTD is on track, every other business metric benefits.
The Cost of Failed Deliveries
Failed deliveries are common—but they’re also expensive and damaging to brand trust.
Failed deliveries lead to lost packages, frustrated customers, and added costs in time, labor, and resources. At Veho, we've identified that address issues cause up to one-third of all failed deliveries to occur.
In cases related to delivery failure, driver partners are often able to locate misdelivered packages and attempt redelivery.
But the damage is often done: customers may cancel future orders, especially for subscriptions. A brand or shipper must then cover the cost of the failed delivery, adding to expenses, fuel use, and delays—while increasing the risk of further complaints.
But why do failed deliveries happen?
Here are some common sources of address-related delivery issues:
- Inaccurate or unvalidated addresses from customers or shippers, often due to typos or misspellings. These errors can result in entirely incorrect addresses or, in some cases, a valid but wrong location that complicates delivery.
- Missing location-specific details (like apartment numbers) that make it difficult for drivers to find the correct delivery spot.
- Unmapped new developments, which may lack GPS recognition, creating additional delivery challenges.
Regardless of the reason, each failed delivery leaves a lasting impact, driving up costs and eroding customer trust.
The Power of Proactive Address Validation
At Veho, proactive address validation is a foundational step to reduce failed deliveries—an approach not commonly adopted by most delivery companies, which typically charge retailers for address errors.
Our address normalization process goes beyond basic validation to verify the address, standardize formatting, and geocode each location with precise latitude and longitude coordinates, ensuring accuracy from the start.
This proactive validation catches errors at the source, preventing delivery issues before they arise. Here’s how Veho’s process typically works:
- Validation: Confirms that the address exists within recognized databases.
- Normalization: Ensures consistency in address format (e.g., street name, city, postal code).
- Geocoding: Adds exact location data (latitude and longitude) for more precise navigation.
Address normalization is especially valuable for deliveries to new developments or hard-to-find addresses, where even small errors can lead to costly delays.
Customer-Driven Solutions: Leveraging Perfect Placement and Self-Service Corrections
Address normalization is important, but it’s not enough. Veho is setting the standard in the last-mile delivery space by inviting end customers to confirm and personalize their unique delivery details.
Veho recently implemented our Perfect Placement photo feature, which allows customers to upload photos of their preferred delivery location, and a geocode is automatically applied based on the location where the photo was taken. This proactive approach helps drivers navigate complex deliveries, such as those in large apartment buildings or newly developed neighborhoods, with a visual reference point that lowers the chance of failed deliveries.
A single Perfect Placement photo can be used repeatedly, eliminating the risk of missed deliveries and OTD misses over time, which builds loyalty, trust, and increases recurring revenue and retention.
The impact has been massive. While Veho has one of the industry’s lowest delivery failure rates, averaging below .11%, our new Perfect Placement feature has reduced this already diminutive rate by another 77% for those using the feature.
Our clients have also seen major successes with this feature. Through Perfect Placement, our sustainability-driven ecommerce client achieved a 94% reduction in delivery failures, nearly eliminating this common pain point in last-mile logistics. Their same day delivery misses also saw substantial improvement with a 39% reduction, helping maintain their premium brand reputation and customer trust.
Coming Soon: Map-Based Address Editing
Another innovative solution that is coming soon is map-based address editing. This feature will allow customers to view and correct their delivery location on a map. If the customer detects an issue, such as an incorrect geocode that might route a package to a neighboring property, they can make adjustments before the driver arrives.
For new builds, rural addresses, or large campuses, this feature will empower recipients to manually place their delivery pin at the precise spot they want their package to arrive.
Example: New residential developments often aren’t fully integrated into mapping systems, leaving delivery drivers to guess the correct location. With map-based editing, a customer can drop a pin on the map to pinpoint their exact delivery location, ensuring the driver knows precisely where to go.
Benefits of Map-Based Address Editing:
- Improves delivery location accuracy, especially for complex addresses
- Reduces the need for customer support interactions
- Ensures driver partners receive the most up-to-date and precise delivery information
This type of self-service tool benefits the end customer while simplifying the delivery process for driver partners, who can navigate directly to the specified location on the first attempt.
Scaling Address Accuracy Across the Industry
Given that failed deliveries affect profit margins and customer satisfaction, shippers should focus on implementing and scaling address accuracy solutions.
Here are some best practices to orient your team:
- Proactive and routine validation and formatting of address data upon order entry catches many potential errors early.
- When an address seems incomplete or potentially incorrect, proactive notifications can prompt customers to verify or correct it, reducing failed delivery rates.
- Regularly measuring key metrics like failed delivery rates, on-time delivery rates, and customer satisfaction scores (CSAT) helps companies identify problems related to address inaccuracies.
Veho Is Doing Technology Differently
Veho is changing last-mile delivery with smart technology like Perfect Placement photos and map-based address editing to improve accuracy and keep customers happy. Since adding Perfect Placement, Veho has cut failed deliveries by 77% and reduced OTD misses by 56%. By letting customers upload delivery photos and update address details, Veho puts accuracy and control at the heart of the customer experience.
For shippers, Veho’s proactive approach to address validation and customer-driven tools means fewer failed deliveries, lower costs, and a smoother, more reliable delivery experience.
