The online shopping options are increasing by every passing day and you can buy almost anything online. As the demand is increasing so are the retailers, and their focus these days is on Last Mile Delivery. Last mile delivery, when done correctly, can take an e-commerce venture to new heights with better rates of customer satisfaction and retention.
What exactly does Last Mile Delivery mean?
The last mile is the last stage of the logistics process. It involves procurement of the product from a warehouse to the delivery at the final destination i.e. the customer’s doorsteps. In simple words, you can say it is the last few mile,s a product or package has to travel before reaching its new owner.
It may appear as if the last mile is the simplest part but it is not. For retailers, it is the most expensive and the most difficult part of the complete logistics process. Before reaching the last mile the package goes through different other processes. First, it is grouped into a batch that travels from the warehouse to the retailer’s delivery trucks. Then, it is moved to the shipping container along with other packages. This is quite easy as no categorization, except for size, is used here and packages are just batched in together. The main task is categorizing them and labeling them so that they can be delivered to different locations. This is done by shipping companies such as FedEx, Gati and other courier delivery companies.
Amazon came up with the ‘Next Day Delivery’ and ‘Same Day Delivery’ options for the buyers, that led to a disruption in the last mile delivery process. Every company is trying to implement the same day and next day delivery options. There was a survey by Deloitte, in which more than 50% of shoppers said that fast shipping meant 2 days or same day delivery; only 35% said that 3-4 days could be considered as fast shipping which came down from 42% of people in 2016 and 63% in 2015 to 35% in 2018.
What are various problems in last mile delivery that every e-commerce business faces?
Whenever you track your online orders and you see “Out for delivery”, you become excited and hope that it gets delivered soon. However, that soon starts to look like forever. This is probably because of the inefficient last mile delivery practices in play.
If we look area wise, rural and urban areas both have their own challenges. The rural areas have two to three delivery points with miles of distance in between and only a few drops throughout. In urban areas, drops are more but the traffic congestions make it quite difficult for providing an efficient last mile delivery.
The continuous growth in e-commerce has led to more problems in last mile delivery ever since. This has created expectations in people’s minds, as they not only expect fast delivery but also look for the availability of free delivery while shopping online. UberEats, for an instance, charges INR 1 only for food deliveries in India, which was not in favor of its competitors.
Cost scenario in last mile delivery
In the total cost of shipping, last mile delivery comprises 53% of the overall cost and with an increase in free delivery options, customers do not want to pay the last mile delivery fee. Every e-commerce venture is looking for new technology implementations so that they can provide better and efficient delivery options to their customers that do not burn a hole in their pockets.
How technology acts as a savior?
Everyone is aware of the gig economy. Customers are familiar with the concept of crowdsourcing local services through digital platforms like Uber, Airbnb, and Postmates. Location-based crowdsourcing allows consumers to open a mobile app to hail a ride, book a place to stay, order coffee to the office, hire a handyman to mount a TV, send flowers to that special someone, or even schedule a takeout to arrive just as they’re walking through their apartment door. This could really help outsourcing the last mile delivery to those companies that are efficient enough and will not cost much.
Last mile delivery has become more important than the deliverable product itself. However, customer expectation is what keeps the market up and growing. Retaining customers costs five times less than generating new ones and can even deliver higher returns. When it comes to retaining customers and pleasing them in other ways, make use of the following positives –
- Loyalty – Come up with loyalty schemes and offers. This will give customers a reason to return.
- Rewards – When you want to bring customers back, rewards in the form of points, cash back and exclusive discounts work wonders. That being said, you should always keep those rewards relevant and personalized as per different customers.
- Value for Money – Selling a product of high quality for a good price will satisfy your customers. Your customers will return knowing they cannot find better elsewhere.
- Social Connection – Connecting with your customer offline is an ideal way to retain and make them come again to shop at your e-commerce store. Offer a special deal on birthday, anniversary or on festival time.
- Commitment – If you have exceeded the expectations, a customer will always be committed to you. All your efforts should focus to retain these type of customers.
When you make life easier for a customer, you have retained a customer forever. With so much competition, retention is essential and with the right staff and the right systems, you can make sure that you are the best at customer satisfaction in your business domain.
