The COVID-19 pandemic functioned as a “great accelerator” for e-commerce. It pushed forward an already ongoing transformation of the U.S. retail and food-service economy to a more e-commerce-focused model. According to a comprehensive report from Digital Commerce 360, U.S. e-commerce sales reached $839.02 billion in sales in 2020, a remarkable growth rate of 40.3 percent compared to 2019 numbers. This growth pattern underscores the importance of a smooth ordering and delivery experience for e-commerce merchants and shipping firms. But what happens when things don’t go according to plan? Unfortunately, e-commerce brands and carriers often encounter problems with a fundamental part of a delivery — the physical address of the recipient.
When an address isn’t easily located, the shipper incurs additional labor costs attempting to remedy the error. There’s the expense involved with returning undeliverable packages back to the merchant. For food delivery firms and other providers of perishable goods, there’s also the risk of spoilage and waste when they encounter a difficult-to-find address.
The Non-Visible and Improperly Pinned Address Problem
Issues related to addresses are unfortunately very common. This can happen for several reasons, including missing or ineligible markers such as curbside address numbers or house numbers that have faded or been damaged. It can also occur when an address pin on GPS services does not exactly match with the real-world location. In either case, the delivery driver still has issues finding the right house or apartment to complete the delivery. This situation costs companies an estimated $2.5 billion in wasted salaries and $611 million in unneeded miles traveled, according to data from logistics trade magazine Joc.com.
Consumers expect speedy and free (or at least very inexpensive) delivery. According to a study from RetailMeNot, 82 percent of survey respondents state they prefer free shipping to paying a fee for expedited shipments. Merchants should be particularly concerned about this because late or incomplete deliveries directly impact a consumer’s brand experience and loyalty, causing them to search for other brands that can fulfill their needs.
That’s because consumers expect deliveries to happen like clockwork. They’re frustrated when a brand and shipper do not deliver as promised. Unfortunately for brands and their shipping partners, some of these delivery problems are inevitable because of the lack of consistent physical address markers and misaligned GPS pins.
But how is residential delivery so inconsistent when shippers leverage the latest GPS programs and use sophisticated route management tools? What can merchants, shippers, and individuals do to improve the problem issues caused by non-visible or improperly pinned addresses? Answering these questions is vital for the entire e-commerce industry, as it continues to experience massive growth that will continue through 2021 and beyond.
An article from Fresno-area news station Fox 26 News highlighted the issue in an interview with Amazon driver Arman Kantarci, who says “The GPS doesn’t show exactly where it is, it just says ‘It’s on your right’ a house or two ahead of time. But houses on Van Ness or Fulkner, big houses that have big lots – you can’t tell which house it is.” He also highlighted the problem finding house numbers in the dark, “it may not matter for daytime drivers as much, but for nighttime drivers, we kind of depend on it.
Sites such as Nextdoor feature many comments from neighbors posting about packages they received at their home addressed for someone else. While these neighbors work together to get the packages to the right location, many deliveries are not completed, leaving shippers and delivery companies to incur additional costs, which then negatively impact consumers. All companies involved should leverage technology to ensure more consistent package delivery and not rely on a collective of well-intentioned Nextdoor users.
Improving Delivery Processes and Customer Experiences
The issues experienced by drivers like Mr. Kantarci are not just annoyances for drivers and recipients. They point to the continued challenges for merchants and shippers to complete the “last mile” of delivery. This means the final part of a package’s journey before it ends up in a consumer’s hands.
Within the context of fixing the problems associated with incorrectly pinned locations and missing or non-visible house numbers, it’s a question not of the last mile, but the last 200-feet or so of delivery. This is the phase of the delivery where value is lost because the driver spends too much time finding the right address. This can happen for a number of reasons. For one, houses in rural areas are often far away from the road and often on poorly marked roads. Even if the numbers are in plain view, drivers can struggle to locate the right house in the dark. Elsewhere, new construction projects often have misaligned GPS addresses that are not accounted for in mapping programs or residents are simply unaware their home does not appear accurately marked on the map, and they’ve never taken steps to request a manual remedy of the error.
The problems drivers experience delivering to poorly marked addresses or to those that are showing up on the wrong coordinates on GPS platforms are especially acute in high-density residential settings. For example, a new apartment complex consisting of four different 12-story buildings can pose a significant challenge for delivery drivers. A mapping platform might say the driver’s destination is coming up “on the right” but it would in fact be pointing the driver to the wrong building in the complex. It’s often difficult for drivers to enter these complexes or navigate to the right building. Many times, they don’t have an access key and need to follow residents through a gate or door to complete their delivery. If they’re unsuccessful, then they need to leave a note for the intended recipient or include a notation in the tracking log. In either case, the driver is taking up valuable time, and the consumer is not receiving their package on time. It’s possible a driver might need to take dozens of undelivered packages back to the delivery hub. This can also fray relationships with merchants, who then need to repair their brand image with dissatisfied customers.
Food delivery drivers also have a special interest in being able to find addresses quickly and accurately. The delivery itself is time sensitive, and drivers work hard to get food to a customer’s hands while it’s still warm. Searching fruitlessly for addresses cuts into their hourly wage and negatively impacts the customer experience. Drivers aren’t compensated for this extra time, and if they cannot locate an address (and the customer doesn’t respond to texts or calls), then the driver can receive a poor rating or be dropped from the service entirely. Drivers searching for addresses often resort to using flashlights to read curbside house numbers, which also elicits safety questions from concerned neighbors.
Tackling a Global Problem
Outside of the United States, the implications for improving the address problem are immense. In India, there are estimates that poor addresses cost the country between $10 billion and $14 billion annually because more than three quarters of addresses are tied to a nearby landmark that’s usually 50 to 1,500 meters from the actual address. It’s an antiquated addressing structure that presents extraordinary challenges for ecommerce companies and food delivery firms. A similar issue persists in other countries, where informal addresses need more structure in the modern e-commerce age.
Improving the issues with improperly marked address numbers and inaccurate mapping pins will require extended partnerships between Uber, Lyft, DoorDash, and e-commerce players, along with the various mapping services and logistics companies. And for individual consumers, they can help by using new smart devices that highlight their address numbers and function as accurate location beacons.
E-commerce retailers and food delivery firms both want a smooth customer experience, and reducing this issue is another way they can remove “friction” from the ordering process. It’s an opportunity for e-commerce firms and delivery companies to reduce their operational costs and improve customer experience as e-commerce further cements its status as the shopping method of the future.
