A dynamic leader, CEO Kushal Nahata drives the culture of customer centricity at FarEyedelivering value to FarEye’s more than 150 customers worldwide.
Supply chains are incredibly complex. When one part of the supply chain fails, its impact is felt everywhere by logistics leaders, shippers and consumers. Over the past three years, there have been global supply chain disruptions due to various factors, including the pandemic, global unrest and labor shortages.
During this time, the growth of e-commerce has exploded. Global e-commerce sales are expected to reach $5 trillion in 2022 and reach $6 trillion by 2024. Supply chains and e-commerce are inextricably linked, as e-commerce relies on efficient supply chains for consistent and on-time deliveries.
Our experiences as consumers are influenced by the movements of goods from manufacturers to distribution centers and ultimately to our homes. The last part of the ecommerce supply chain that physically connects brands to consumers is known as the last mile. The last mile, though rarely a mile and usually more, is a critical step that can make or break the consumer experience. Consumer experience is directly linked to a company’s reputation and ability to generate future sales.
Previously, companies and brands believed that sales experiences, both in-person and online, were the most important factor in the consumer experience. However, with the growth of e-commerce, I see how last-mile delivery has now become an important part and central to how consumers evaluate which brands to buy.
Why is last mile delivery complicated?
The last mile has become increasingly complex with a variety of collection points (store, home, distribution center), a multitude of delivery methods (own fleet, outsourced fleet, autonomous, drone) and countless destinations (home, company, collection point, parcel locker).
For brands and businesses, the last mile can also be unpredictable, with delivery destinations and timelines unknown until an order is placed. Combine that with the different execution and fleet types you can choose from, and you have a process ripe for inefficiency, delay and additional risk.
Carbon neutral fleets, autonomous delivery vehicles, outsourced gig fleets, hyperlocal deliveries and omnichannel fulfillment methods all offer consumers faster, cheaper and more sustainable delivery options. How, where and when deliveries depart and arrive gives shippers and carriers more flexibility, but with all this flexibility comes greater complexity to manage.
How has the rise of e-commerce affected last-mile delivery?
Today, more consumers are shopping online and demanding deliveries in increasingly shorter time frames, despite ongoing supply chain disruptions. According to an Oracle report, home delivery is the preferred method for: 66% of global consumers. In addition to reducing supply chain disruptions, including weather conditions, transportation delays and driver shortages, businesses also need to constantly adapt and adapt to increased consumer expectations.
According to a McKinsey survey, the majority of customers expect: delivery within two to three days as the baseline, but 30% of consumers expect same-day delivery. As delivery times for consumers become shorter and shorter, companies must fulfill these deliveries as expected and find ways to keep their last-mile delivery costs low.
Giving consumers the products they want is important, but delivering a cohesive experience from order to delivery is now the holy grail. A critical part of delivering a world-class brand experience is last-mile delivery.
How can companies keep last-mile delivery costs low?
The last mile is the most expensive part of the journey for companies and accounts 53% of the total shipping costs. Average one failed delivery costs $17.78, and more than 5% of all last mile deliveries fail. However, a failed delivery costs companies more than money. In a survey of 1,500 shoppers by Convey, they found that: 84% of customers are “probably not coming back after just one negative experience.” In my experience, customers are unlikely to give a second chance, and even if they do, fixing that bad experience can be difficult and time-consuming.
Consumers want their products to be delivered quickly with text or email alerts telling them where their delivery is and when to expect the product. Companies that can provide consumers with information about their order during the delivery process may also experience fewer customer service calls, helping to keep costs down.
How can companies simplify last-mile delivery?
Technology is the key to simplifying the process. Shippers and carriers need to choose the right technology platforms to help them create more efficient and accurate last-mile deliveries.
The key challenges to overcome with your chosen platform include routing, consumer experiences, omnichannel fulfillment, sustainability, and returns. In particular, you can use omnichannel fulfillment as a way to fulfill and distribute orders that have come in through multiple sales channels.
But with so many options for consumer delivery, shippers and carriers need to learn how to optimize end-to-end omnichannel fulfillment with precision, while minimizing last-mile costs and achieving last-mile excellence. In this regard, returns are a rapidly growing concern for retailers. With a McKinsey report showing that 33% of returning consumers would leave a retailer if they had a difficult returns experience, you need to manage returns as well as manage deliveries to provide your consumer with a seamless experience.
When choosing a last-mile delivery management platform, choose one that integrates easily with your existing business processes so that no time is wasted on optimizing your last-mile delivery. Confirm that the platform is scalable and flexible so it can grow with your business. The platform must have the experience and expertise, along with a proven track record, to enhance your company’s competencies and increase its value.
I would also recommend implementing a branded delivery experience so that consumers recognize one brand and view delivery as an extension of a brand’s excellent customer experience.
Winning in the last mile creates a competitive advantage.
Creating a positive sales experience is no longer enough for brands. They must ensure a successful and satisfying delivery experience for their customers. Companies that can provide a positive and enjoyable delivery experience are more likely to create brand-loyal customers and gain a lasting competitive advantage.