The flourishing on-demand industry holds in itself a harsh truth that the last step is the most crucial and problematic of all. As the name suggests “Last Mile Delivery”, it is the fag end of the whole process. So what actually makes Last Mile Delivery so important? Before enlightening its importance, let’s have an idea of what last mile delivery is all about.
Well, it comprises of final transportation of goods right from the hub to the final destination i.e. the customers. A customer will have the perception of your business just through the efficiency of last mile and the final experience of receiving the package in the hands. In the end, that perception is displayed in the form of reviews and ratings.
The surge of online orders has triggered the importance of the last mile delivery. Going with the statistics, these online orders have resulted in a substantial increase in e-commerce sales, which are expected to reach $1.35 billion by 2018.
Isn’t it frustrating when you track your online order and find out that it was “out for delivery” that took forever? Eventually, you will figure out that there is inefficiency in their last mile delivery. In rural areas, it is normally because of distance between delivery points along a particular route whereas in urban areas it is usually due to the traffic congestion. The inefficiency and the resource-hungry last mile delivery is always a challenge for businesses.
Being the final frontier of logistics, last mile delivery is highly inefficient in the majority of on-demand businesses. The issues usually lie in the cost of transporting shipments to distinct and often unbearable distances through constantly changing routes. Moreover, with a high volume of purchases, holiday shopping as well as priority delivery through subscription like Amazon Prime, a great number of resources, expenses and time constraints pose never-ending challenges to the merchants.
Last mile delivery challenges faced by the businesses
- Real-time visibility
Customers want to have a full, real-time visibility over their deliveries. If you have ever booked an Uber, you might know how this works. You can view the driver moving in his car to pick you up on the map in real-time. This process of real-time tracking allows you to have an idea of where exactly the driver has reached. The customers expect such visibility in all the last mile deliveries.
- Frictionless delivery
The last mile delivery includes dealing with customer inquiries about how customers need their orders to be delivered to them. Indeed, a frictionless delivery experience helps in streamlining efficiency and costs. Thus, the businesses need to have a technology that can enable open communication between customers and assigned delivery personnel. It will trigger a hassle-free delivery experience so that the customer will not have to go through the whole process in order to find delivery information.
- Increased efficiency
When you optimize the last mile delivery, you increase the efficiency of your business. Modern customers expect faster deliveries without any compromise in their convenience. Using technology to automate deliveries can help in satisfying the needs of modern customers. On-time deliveries not only increase efficiency but also help in optimizing business costs.
- Costs related to last mile delivery
With the growing trend of free shipping services, customers are less willing to pay any delivery charges. With more and more customers demanding for same day or next day deliveries, there is a need to automate the last-mile delivery operations. Encompassing up to 28% of the total cost of the delivery, last mile delivery is the least efficient part in the supply chain. Thus, it requires a new technology for driving the process improvements.
However, there are some ways to make sure that customers are getting their orders on time. Just have a look at them –
- Allow customers to set their own delivery window
Do you want to have a successful last mile delivery? Allow your customers to select their own delivery window. When customers are offered a narrow time slot, it will be easier to accomplish deliveries in time. Delivering orders as per the customer preferences helps in overcoming challenges of incomplete deliveries due to the absence of customer or any other reason.
- Revamp your transport schedule
With new order being added, you definitely need to revise your transport schedule. Just take into account the delivery areas and the already confirmed existing deliveries. Thereafter, evaluate the delivery times for new orders and set a delivery-route accordingly.
- Go for automated consumer updates
What if a customer can have a real-time view of the delivery vehicle that is out for delivery? Right from leaving the depot to the final delivery, showing the real-time movement of the shipment to the customer will provide the best delivery experience.
Making up for 50% of all logistics costs, last mile delivery is a crucial part that differentiates one retail brand from another. It is high time to manage your logistics matrix strategically in order to minimize last mile delivery costs and achieve customer satisfaction.
