In the wake of the e-commerce boom, customers have been conditioned to receive their items quickly and in one piece; however, the rise in package theft has made this process fairly difficult with added customer frustration.
The number of customers who have reported stolen packages rose from 36 percent in 2019 to 43 percent in 2020. Of those 43 percent, 64 percent reported that they were not first-time victims of package theft. While many customers’ first line of defense is enhancing their existing third-party home security systems through motion-sensored lights, cameras, doorbells, and professional monitoring, these only serve as deterrents that have done little to shake off the porch pirate who is not looking to break into a home, but rather pillage the packages left outside.
Customers who have a regular stream of deliveries have invested in installing delivery lockboxes on their properties, such as Box Sentinel, DeliverySafe, Danby Parcel Guard, and Doorbox, among other third-party residential lockbox providers. However, data shows that most thefts occur when packages are delivered to homes during business hours when the customer is not available to take delivery. This indicates that the true key to loss prevention lies within third-party technologies that can surface real-time delivery optics, two-way communication between delivery drivers and customers, and the fundamental capability of providing the customer with choices of receiving their packages when they are available.
Below are some key takeaways about how this third-party technology benefits both customers and retailers.
Looking Beyond the Porch Pirate: How In-Store Retail Theft Affects Logistics
In addition to package theft, organized retail crime is at a high among physical retailers. Out of $3.1 trillion in brick-and-mortar sales, $49.6 billion was lost to organized retail crime. Because of this high shrink rate, retailers are keeping less and less inventory in their physical stores. However, the implications of low store inventory to same-day delivery and in-store pick-up are high and make it harder for customers to utilize these last-mile options to reduce their own loss.
In addition to theft, retailers are keeping less inventory in-store because they simply cannot receive it due to port congestion. While manufacturing is recovering from COVID-19, production has not returned to normal. Companies have begun sourcing materials from other countries but have run into disembarking bans and restrictions, so they physically cannot make and manufacture new product.
Third-Party Software Is the Solution
Third-party technologies work to not only aggregate same-day delivery in terms of the delivery itself but also facilitate the customer experience side of deliveries by programming the options for customers to choose delivery windows. These technology platforms provide customers the opportunity to choose same-day delivery and choose a delivery window as well, ensuring that they or someone in their family can be home to retrieve the package, minimizing any chance for theft.
This technology not only benefits the customer, because whenever there is customer confidence and satisfaction, the retailer will in turn benefit. Data shows that customers will not shop from a business again after one bad experience, with 72.5 percent of poor deliveries resulting in a customer no longer recommending that retailer. Customers and their close circles will move to retailers who do use retailers who provide delivery windows and real-time assurance.
Additionally, buy-online-pick-up-anywhere options facilitated through this same third-party technology are another way to reduce package theft. Customers have the option to have their products delivered to secure storage lockers at various convenient locations around their immediate area. For example if a customer has to run errands, they can choose a locker location that is on their way back home. This makes it both convenient and secure for customers as well.
Other technologies exist that allow customers to give delivery drivers access into their homes to avoid porch package theft. However, the use cases for this technology are significantly low due to the element of trust that is involved with letting a stranger into the home. Although these technologies can be a solution, they are not as practical as third-party solutions that allow customers to choose the delivery window.
Increased Adoption Rate Is in the Future
Looking ahead to the next few years, the adoption rate of these solutions will only increase as consumers choose the brands that give them the easiest post-purchase solution. Along with ease and convenience, the security that comes with these third-party solutions will eliminate the need for extra insurance policies. Insurance is a large cost factor for businesses. When businesses can pinpoint a delivery down to a few hours, the need for an additional insurance policy is eliminated because the customer becomes that insurance by agreeing to be available during that window.
The benefits of third-party technologies to both consumers and retailers is invaluable, and as retailers continue to evolve to consumer preferences and cut costs, they will see that investing in this technology will help retailers both create brand loyalty and reduce inventory loss as more customers continue to shop online and use shipping lockers and delivery window scheduling.
Nourhan Beyrouti is the senior director of corporate marketing and brand at Delivery Solutions, a provider of last-mile delivery and fulfillment software. With over 18 years of experience, Beyrouti has worked and lived in 15 countries around the world, giving him a global perspective on branding, corporate innovation, and real estate development.