Last-mile delivery has become more complex and challenging for shippers and carriers than ever before. The last mile is typically the most expensive leg of the entire supply chain, accounting for 53% of overall shipping costs. It’s also highly unpredictable, with delivery destinations and timelines unknown until the customer places an order.
In a world increasingly driven by e-commerce, product and price are no longer the only considerations for winning sales and delighting consumers. Delivery has taken center stage as a key factor for consumers deciding where to purchase online goods. A superior delivery experience becomes a competitive advantage.
Excellence in last-mile delivery lies in five fundamental pillars: logistics complexity, consumer experience, differentiated offerings, sustainability and key logistics challenges.
Today, more consumers are shopping online and demanding deliveries in increasingly shorter time-frames, despite continued supply chain disruptions. Companies must mitigate the impact of weather, transportation delays, driver shortages and other events. They must also continually adjust and adapt to increased consumer expectations. To be successful, they need to dramatically simplify the most complicated aspects of delivery logistics.
Omni-channel fulfillment adds another layer of complexity. With so many options for delivering to consumers, companies must learn how to optimize end-to-end omni-channel fulfillment while minimizing last-mile cost. Brands need to redefine the order-to-delivery journey while providing flexible and frictionless order tracking and fulfillment.
Simplification requires visibility and orchestration of routes, including the management of multiple carrier fleets through a unified view. Visibility allows drivers to choose the most efficient routes in real time, consumers to track packages with up-to-date information, and companies to better manage order exceptions.
A positive last-mile interaction translates to strong brand equity and greater brand loyalty. A negative delivery, by contrast, can ruin brands. Eighty-five percent of consumers would not shop with a retailer after having a bad delivery experience. Companies must deliver a cohesive experience for consumers from the time they order the product through delivery.
FarEye's Last Mile Mandate Survey finds that fast delivery is the most important aspect of a positive delivery, followed by a desire for delivery tracking and ETA alerts. Speed and delivery tracking ability are the new differentiators that brands must focus on to win consumer loyalty.
Delivery visibility helps in communicating accurate ETAs to consumers and forecasting on-time or delayed deliveries. The greater the communication with consumers in the last mile, the more likely they are to stick to the brand and recommend it to their family and friends.
Business process management (BPM) is about optimizing workflows and processes. It involves monitoring and analyzing the operations of an organization and making them better. Using BPM to create new and differentiated offerings to satisfy evolving consumer buying behaviors is pivotal to maintaining brand loyalty.
With their hassle-free user interfaces, BPM platforms make it easy for managers to make changes to existing processes, or expand into new markets using third-party carriers. Companies don’t need to stress over coding to make those changes; a simple drag-and-drop will suffice.
A strong BPM platform can help enterprises scale with speed without requiring additional resources. Once the BPM engine takes over, logistics managers can focus less on repetitive tasks and concentrate on other important tasks within the logistics ecosystem. BPM platforms also capture data that can be gleaned to make processes more efficient.
Making deliveries both efficient and sustainable is a tough balancing act. Brands need to provide customers with the best possible experience while also worrying about reducing carbon emissions. The key to success lies in optimizing transportation, delivery and reverse logistics to make the last mile more sustainable.
Route and delivery fleet optimization can help to achieve that goal. Green fleets, incorporating electric vehicles and alternative modes such as drones, can go a long way toward reducing carbon emissions. And driving miles can be significantly reduced by determining the most efficient routes. The technology can also be used to validate shipping addresses, receive special instructions and increase the rate of successful first attempts at delivery.
Key last-mile challenges
Brands and retailers face numerous challenges that occupy much of their planning time, including omni-channel fulfillment, returns processing and the need to provide visibility to consumers. Amazon set the consumer experience bar high. Shoppers today expect rapid delivery as well as full visibility of their orders in transit. And it costs a lot to maintain call centers for handling inquiries about the status of those orders.
Returns constitute yet another expense, costing retailers an average of $10 to $20 per return before factoring in shipping costs. A third of retailers say that dealing with returns has impacted their profitability.
With the front door becoming the new storefront, simplifying the last mile while delivering a cohesive brand experience from order to delivery has become the mandate for brands and retailers. With the help of the right logistics technology, they can achieve that goal with maximum efficiency.
Judd Marcello is chief marketing officer with FarEye.
Timely, incisive articles delivered directly to your inbox.