The “last mile” is a logistic concept that involves adapted processes to ensure final delivery is comfortable for customers and efficient. Of course it brings a lot of challenges to overcome, largely depending on cultures, locations & habits of online customers. Today, a great last mile delivery experience is central to any e-commerce business.
Online shoppers want to receive their goods as soon as possible. Parcel delivery has become a very powerful marketing leverage for your e-commerce. Knowing that about 37% of online shoppers who face a poor delivery experience blame the online seller itself and never shop again on its website. The concept of last kilometer represents a daily challenge for online stores owner in a very competitive market.
The majority of e-shoppers’ purchasing experience is directly linked to the quality of the delivery service that the seller provides them. Considering that waiting while order is being shipped is kind of stressful for customers, the last mile appears to be a key step in online customers satisfaction. 55% of them declare they won’t reorder from a website that had troubles with their parcel delivery.
Practical last mile delivery issues & economic challenges
Pleasing your e-customers with great delivery is a great thing of course, but the last mile delivery present more challenges than just distributing parcels in time. Whether it be economical or practical, here are a few elements you should expect when considering last mile delivery for your e-commerce.
Managing Operating cost
When creating your e-commerce business model, you should better be realistic about the delivery expense you will have to face. Research show that 28% of this total delivery cost comes from the e-commerce last mile delivery implementation. In order to minimize this cost, online stores tend to transfer it to their customers but this is not customer friendly at all and can have a negative impact on your image in the end.
Every e-commerce owner knows they will have delivery costs, but new expectations from online customers are presenting new challenges. Solutions like same day or on- demand delivery gain more and more ground every day and can increase the bill.
Even e-commerce giant Amazon can face problems with the implementation of last mile delivery of their products. Between costs and possible poor delivery service, owning and controlling each step of their entire supply chain seems to be their new solution to reaching excellent last mile delivery service for their dear customers. But it does not necessarily means it is the case for every business though.
Be efficient
Online shoppers themselves are the reason why new delivery options are implemented. They are the ones expressing their desire for more speed in delivery time or more flexibility concerning the delivery date and hours. And the only way for your e-commerce to keep up with those needs is to have efficient supply-chain of course but also to call out new technologies to be able to get the right delivery person being on the right area et the right time and be able to save money on delivery budget.
Locating customers
Some of the world’s fastest growing e-commerce markets take place in region like India, Asia, Africa, and the Middle East. Of course it can happens anywhere but if your e-commerce operates in those regions, you know better than anyone else that last mile delivery can be a real challenge. Because online shoppers over there don’t always have conventional mailing address, with street names and numbers, carriers often lack of information, and are likely to rely on landmarks indication to complete the deliveries. The latter usually end up calling the customer several times to reach the right location, which can both be annoying for the customer and a waste of money for you.
Several enterprises identified the issue and worked on attributing some sort of digital addresses to transform these online customers last mile delivery experience. Some will use GPS location of the consumer’s mobile device to provide a valid (and easier to find) address for the delivery. Some services propose add the customer’s front door picture to the GPS signal option. Other company with similar goal have identified every inches on Earth and divided it into a digital grid. The customer can then indicate its location with the 3 corresponding words.
E-commerce in those region have to find innovative solutions to solve expensive last mile delivery issues of this kind in order to easier reach their consumers and win the market.
At work delivery, the Plan B not so handy
Traditional delivery hours being usually from 8 a.m to 6 p.m, it is not always easy to avoid getting a delivery notice. In order to receive their parcels during working hours, more and more people ask to deliver them at their workplace. It is then mostly useful when for people working close to home because the parcels still have to be brought home. It complicates things.
Some companies have concierge service available or agreement with their direction that allow them to receive parcels, but it is unfortunately not the case for everyone. Plus, receiving parcels at work may quickly become innadapted if customer wants to be discreet about what they bought online.
To overcome the problem of poor delivery experience, new innovative services have been implemented in order to allow e-shoppers to get their parcels after working hours.
Online customers need personalized delivery alternatives
The demand for personalized delivery has never been so high. Nowadays, people have no time to waste. Their schedules are full and they want the services to adapt to them, not the contrary.
Almost half online shoppers declare they would be ready to pay extra amount for the possibility to have their package delivered during evening or on the week-end.
This is now possible thanks to new startups ready to fill the gap and revolutionize the last mile delivery concept. They are providing new last mile delivery services like gathering your online customers’ orders and let them choose the date and time they want them to be delivered directly at their home, after regular evening working hours.
On-demand delivery
With more than half of Earth’s inhabitants living in cities, delivery companies job is not always easy as 20% of deliveries fail on the first attempt when in residential buildings. If the parcel does not fit the mailbox size, and the receiver is absent, then the delivery can’t be processed and has to be postponed.
Thanks to new service providers, your e-commerce will soon be able to let customers choose the exact day and time they want to receive their parcel at home, with an incredible 1 hour delivery window. If they change plan and want to reschedule, no problem, they will have the possibility to do it themselves. Even if this kind of solution is only available to some big US cities for now, there is a lot to bet that is will work so well that the model will develop elsewhere.
But in order to have access to this kind of service, your customers have to pay extra amount. Imagine how loyal your customers would become if you could offer them personalized delivery service in your shipping proposition while checking out? Knowing that over 33% of online shoppers decide not to ship their orders directly at home because of the anxiety of not being able to receive them, you definitely need to stay tuned about new last mile delivery services that can empower your e-commerce with more customer loyalty. It can also give you the possibility to attract customers that wouldn’t have purchased otherwise because they had special delivery expectations and needs.
Pick Up stations, for a 24/7 access to parcels
National Post services and private delivery companies tend to use more and more pick up stations. This innovation is great because it allows e-shoppers to retrieve their parcels whenever they want, with no opening hours restrictions.
Usually present in useful locations like subways, train stations, convenience stores and so on, they are becoming the norm. But even though they are full of advantage, the size of the boxes doesn’t allow big items to fit in and they still have to be brought home. The time of display is also some kind of short and forces customers to get their parcels in the next 3 days usually before it goes back to the sender.
Same day delivery:
If you want to reach new customers try partnering with a same day delivery service. Same day delivery already attracts about 2% of online shoppers living in cities where this kind of service is available. Even if the figure is small for now, it represents about $100 million of products shipped in the 20 cities where same day delivery exists in the US. Consumer interest is growing fast and study shows that almost half of US e-shoppers would be willing to use same day delivery when then have no time to go street shopping and about 25% of US citizen even indicates that they would abandon their cart if this option is not available to them.
If you want to know whether your e-commerce should give it a try or not, let me explain what a typical same-day delivery user looks like. It has been determined that he is likely to be a young millennial male that lives in an urban area, usually looking for niche products . So, if recognize your target market in this description, you should totally go for it (as long as the service is available to your area of operation of course).
The overall challenge when it come to e-commerce is to offer your customer an optimal customer experience through personalized delivery process, depending on their constraints. This is why you need to partner with companies that offer different last mile delivery options.
Example of last mile delivery adaptations
Amazon
First of all, the e-commerce giant was facing important shipping expense. Second, it sometime happened to be powerless regarding on time delivery because of its high volume of sales. Amazon then decided few years ago to take over its delivery process (at least in the US for the moment). The firm has now a fleet of delivery trucks and its very own air cargos fleet to efficiently deliver orders in time. This is also part of a bigger initiative of being responsible of their own delivery process and decrease costs. The promise of the new Amazon Now service (which announced a same day delivery) also relies a lot on a perfect implementation of the last mile delivery process.
The delivery needs to be quick and please customers for them to come back regularly. To do so, Amazon is not only using its own transportation means but is currently experimenting to hire individual drivers to deliver its packages and bypassing traditional carriers. Called Amazon Flex, the system employs people to deliver packages for Prime Now using their own cars.
So what Amazon managed to successfully do is to owned their entire value chain. They took back the control over the last mile, which is the moment that matter the most to online consumers.
Traditional carriers
How can you control the last mile delivery process if you don’t do it yourself? Even though huge companies like Amazon try to put their hands on the entire delivery process, not every e-commerce can implement such infrastructures, chances are, your are part of them. Delivery companies definitely know the important of last mile of course, and are implementing new technologies to deliver e-shoppers parcels in time and increase satisfaction as much as possible.
For example, UPS has recently been developing embedded drones that would double the delivery capacity of each team member. Above all, those drones will be very handy in locations where lots of waterways separate districts, or when distance between customers are huge like in countryside.