LAST MILE E-COMMERCE
What is the last mile for ecommerce?
The last mile is a metaphor used to describe the movement of goods from a fulfillment centre to their final destination. In other words, the last mile is the last leg of your product’s trip before it arrives on your customer’s doorstep.
Challenges of Last Mile Delivery for eCommerce
The eCommerce revolution has turned the “traditional” supply chain on its head. From speed to delivery, to increased expectations for the delivery experience, this change has in large part been driven by the more empowered consumer of today. However, it is in the last-mile that many of these challenges manifest.
By 2017, online retail will make up 10% of all purchases. For something that only became viable within the last 15 years, that is a huge feat.
Customer expectations regarding time to delivery, overall delivery experience, and open communication have forced online retailers to invest in new technological solutions to manage their delivery operations.
There are many challenges when it comes to last mile delivery for eCommerce, but here are 4 that are most prominent:
Did you know that 28% of the total delivery cost to a business comes from the last-mile? In general, this often gets passed on to the customer. When it doesn’t, it can have a negative impact on the bottom line.
Cost is not a new issue, obviously, but new expectations, particularly regarding same-day/on-demand delivery has put a greater strain on budgets. Additionally, when it comes to online retail, there can be inconsistent demand, such as increasingly higher volumes of purchases during holidays.
As mentioned earlier, Amazon had a real problem with this issue – their largest cost was fulfillment and their biggest challenge was last-mile delivery. There is no silver bullet for offsetting costs. However, efficiency and planning go a long way to neutralize its affect.
Humans have always had the desire to know, understand and anticipate. These desires are felt by consumers as well. As a result, businesses that deliver, and 3PLs in particular, began to generate tracking codes which allowed consumers to get some visibility over where their delivery was.
In the modern on-demand era, tracking codes don’t satisfy consumers anymore – they want to have full, real-time visibility over there deliveries. In particular, they want to see the entirety of the last-mile – that is, they want to be able to see where the driver is and exactly when they will arrive.
Whether the delivery is same-day or not, consumers still want to have more than a 4 hour window when waiting for their package.
As with other new challenges, customers have been the major driving force for increased efficiency. Among other reasons, the requirement for increased efficiency is predicated on the desire for faster deliveries. On-demand has penetrated every industry and business, and online retail is no exception.
Efficiency can be increased throughout the supply chain, but when talking about the last mile, especially with regards to same-day/on-demand delivery, technology is the key. Things such as automatically dispatching to the right delivery person, in the right area, at the right time can help increase efficiency and decrease delivery time.
A frictionless delivery experience helps streamline efficiency and cut costs. One of the greatest sources of friction during last mile delivery is dealing with customer inquiries about their delivery and requests about how it should be delivered (“don’t ring the door bell,” for example).
Creating a frictionless delivery process requires technology that enables open communication between the customer and the delivery person, as well as full visibility over their deliveries. By doing so, you lessen the likelihood of a customer calling in and having to deal with a customer service representative, who will then have to go through their system to find information about the delivery.
Dealing with these new challenges requires investing in a solution that helps businesses manage their deliveries. While researching such a solution can be time consuming, we put together a simple guide to help you in your decision making process.