E-commerce sales dramatically increased in 2020 due to the pandemic — up nearly one-third from 2019 to reach an estimated $791.7 billion. Despite the challenging times, customer expectations for delivery remain higher than ever: they expect shipping to be fast, convenient, sustainable, and paired with real-time updates.
And there are real risks to not being able to meet (or exceed) today’s customer expectations. In fact, 84% of buyers who have a bad delivery experience won’t buy from the same retailer again. A poor delivery experience jeopardizes your business’s reputation and growth.
For example, take exercise equipment company Peloton. Its pandemic-induced popularity is threatened by 10+ week delivery timeframes, last-minute delays, and a payment upon sale requirement (before the product’s arrival). Customers expressed their dissatisfaction on social media, canceling purchases, and defecting to competitors.
Even after the world reopens, having an end-to-end supply chain strategy that provides excellent delivery will remain table stakes. To meet customer expectations, retailers need a last-mile delivery partner that can help scale and modernize their logistics.
The inefficiencies of last-mile delivery
Last-mile delivery is the movement of goods to their final destination, typically from a warehouse or retail location to the customer’s doorstep. While it seems simple enough, the last-mile is by far the most expensive part of the fulfillment chain and the area businesses struggle with the most. Over half of retailers consider last-mile delivery and fulfillment logistics to be a significant challenge.
The difficulty and expense come from the need for many stops with low drop sizes. Last-mile delivery accounts for over half the total cost of shipping in the supply chain. Same-day shipping is even more inefficient. Yet, 80% of consumers want same-day delivery and more than a quarter of shoppers will abandon a cart online if it isn’t available.
Higher delivery volumes and expectations for faster shipping create challenges for retailers of all sizes. Employing delivery drivers, managing vehicle operation costs, and licensing technology sap time and resources away from core business activities.
Partnering with a last-mile delivery company to supplement your existing fleet or completely outsource last-mile delivery can help cut costs, meet customer expectations, and grow your business.
5 things to look for in a last-mile delivery partner
When evaluating a last-mile delivery partner, there are a few key considerations you’ll want to keep in mind:
● Scalability: Regardless of whether or not you have your own fleet, order surges can happen at a moment’s notice. While some fluctuations can be expected — such as around the holidays or during a promotion — others can catch you off guard, creating delays and frustrating customers.
To meet last-minute orders, retailers need to have the appropriate fleet size on hand at all times. If you have your own fleet, this means you’ll either have too many trucks and drivers on the lot or not enough. A last-mile delivery partner that connects retailers with crowdsourced fleets and drivers via an online marketplace can help you scale as demand fluctuates — so you can provide goods to consumers on time and only pay for the delivery service you need.
● Transparency: Both you and your customers need visibility into delivery status. Look for a last-mile partner that allows you to monitor your deliveries at scale with real-time package tracking and proof of delivery. Real-time delivery ETAs help manage customer expectations, leading to a better delivery experience and less time spent on customer queries. Even when delays happen, visibility into the status of a delivery helps reduce frustration.
Many modern logistics platforms combine GPS tracking, algorithms, and automated processes. This visibility allows your team to pinpoint delays in real-time and take action. The technology also enables more in-depth reporting, providing greater predictability for logistics professionals.
● Predictability and reliability: When a customer chooses same-day (or even three-hour) shipping, you need a last-mile delivery partner you can count on. You need confidence in their fleet’s ability to accept your order and deliver within the requested time frame. Look for a delivery partner that can crowd-source fleets and drivers on demand to help ensure that limited capacity never prevents you from completing an order on time.
Predictability in pricing is important as well. Many delivery partners add fees to the final invoice that aren’t included in the original baseline price. Additionally, they’ll often charge extra for quick turnaround delivery. A partner with a clear pricing model will help you forecast delivery costs.
● Sustainability: A delivery partner with a strong sustainability plan can improve your brand’s reputation and bottom line. As consumer awareness grows about the impact and importance of sustainable business practices, more and more will want to buy from or align with businesses that have eco-friendly practices — research shows the majority are also willing to pay a higher price.
Considering that the logistics industry is a heavy carbon producer, a delivery partner with innovative partnerships and programs in place to convert its fleet to electric vehicles (EV’s) can help meet your company’s carbon goals. Electric vehicles are also less expensive to operate and maintain, meaning improved cost savings.
Also consider those overpacked boxes used in traditional carrier shipping. Excessive corrugate and void fill is both costly and wasteful — not to mention customers hate breaking down boxes on garbage day. Your local last mile delivery provider should have policies in place that avoid unnecessary packaging.
● Frictionless experiences: A logistics partner should make requesting deliveries easier, not more complicated. Some providers offer API integrations directly into your eCommerce, ERP, and POS, WMS, TMS or other third-party systems — making delivery management an automated and seamless process.
Beyond providing frictionless e-commerce experiences, your partner also needs to deliver a frictionless customer service experience. Look for companies that track customer satisfaction ratings, on-time delivery rates, and collect feedback from end-customers. Ask about their customer support options to ensure they have robust capabilities (such as an online portal, chatbot, and phone). Ensure that if something does go wrong you — and your customers — will have the support to get the issue resolved quickly and professionally.
Quick delivery provides a competitive edge
A convenient, fast and tech-savvy last-mile delivery experience is essential in our online world. Seventy-five percent of buyers and sellers now prefer digital shopping — and e-commerce is expected to grow 40% from 2019 to the end of 2021. Working with the right last-mile delivery partner helps your company scale to meet customer demand, boosting revenue and giving you a leg-up on competitors who can’t offer quick-turnaround delivery.
