Consumers’ expectations for retail rose as a result of the pandemic.
Delivery must be cheap or better yet, free, and most importantly, fast.
To remain competitive, retailers have found ways to improve efficiency and reduce costs so that they can invest in shipping logistics. This is all about the last mile delivery process. When retailers get it right, the results can be incredible, but getting it wrong can lead to a significant decline in sales.
But what exactly is last mile delivery?
What Is Last Mile Delivery?
Last Mile delivery, also known as final mile delivery or final mile logistics, is the final and most important stage of the delivery process when a parcel is moved from a transportation hub to its final destination. Typically, this is a retail store or a customer’s home.
The purpose of last-mile delivery logistics is to get goods to their destinations as cheaply, quickly, and accurately as possible. While crucial for customer satisfaction, it can be costly and time consuming for retailers.
What is the last mile problem?
The Amazon effect has set unrivalled standards and expectations.
Consumers expect their orders to arrive when, where, and how they want. If retailers want to establish consumer loyalty and achieve a competitive advantage, they must provide these options. A recent study found that 56 percent of American shoppers won’t return to a store if they’re unhappy with the shipping services.
The irony is that, while customers expect free and fast shipping, it’s the most costly and time-consuming aspect of the shipping process for retailers. Statistics show that last mile delivery accounts for more than 53 percent of the total shipping costs.
Retailers and their logistics providers need to automate and optimize each stage of the last mile to cut costs and reduce inefficiencies in operations.
3 Trends in Last Mile Delivery
Customers can schedule deliveries based on their availability with crowdsourcing, and it’s a variable-cost solution that helps retailers cut out-of-pocket shipping costs. Businesses can outsource their deliveries to a broad network of available drivers via a digital platform. This allows companies to satisfy demand even if they don’t have a delivery fleet or when it’s small.
Smart Technology for Tracking
Both retailers and customers are concerned about transparency and traceability. Using GPS and RFID tags, retailers can track the exact location of an item in transit in real-time. They can also use IoT-enabled sensors to inform customers about the environmental conditions under which their package is being delivered. Smart technology may be used by consumers to track in-progress shipments, and retailers can use it to keep track of shipment information, making it beneficial to both parties.
Labour is one of the most expensive aspects of last-mile delivery, accounting for roughly 60% of costs. In addition, there is a lack of availability and scheduling. As a result, an increasing number of retailers are experimenting with robot delivery using drones, self-driving vehicles, and autonomous delivery bots.
The benefits of Last Mile Delivery
Last Mile Delivery offers an array of benefits for individuals and retailers.
Enhanced Delivery Productivity
Last-mile delivery platforms increase productivity by ensuring that vehicles take the most efficient routes, avoiding unnecessary delays and stoppages, and triggering alarms in the event of a potential risk issue. All of which favourably impact delivery turnaround times and lowers overhead costs.
Data-Driven Decision Making
Machine learning algorithms and business intelligence are at the heart of modern last-mile delivery tracking platforms, allowing delivery stakeholders to make quick and precise decisions based on data.
Improved Customer Experience
Customers receive high levels of transparency as they know where their delivery is, when it will arrive, and who will deliver it. They can also receive automated messages, informing them of delivery status and, if necessary, delays. Many tracking tools have natural language processing chatbots to fuel last mile tracking tools which helps improve consumer engagement.
Future of Last Mile Delivery
While crowdsourcing has lowered costs and boosted efficiency, if e-commerce continues to grow, congestion and increased demand for drivers will become a major issue. As a result, drones, self-driving vehicles, and autonomous delivery bots may become one of the permanent solutions.
Meanwhile, retailers – no matter the size – need to meet customer expectations of cheaper and faster delivery. To remain competitive, they’ll need to embrace the faster pace and the technology that caters to that pace, whether that’s crowdsourcing, smart technology for tracking or robotic delivery.
As e-commerce recruiters that specialize in working with the world’s most innovative Last Mile Delivery firms, we have technically proficient professionals waiting to connect with you. Do you have a vacancy you’d like to discuss? Get in touch and our team will guide you through the process.