The more popular ecommerce becomes, the more shoppers expect from online services. Prime among these expectations is the two-day or even same-day delivery.
To meet high expectations, fulfillment centers have had to innovate and streamline their internal processes so everything is coordinated precisely. From sophisticated software that oversees operations to state-of-the-art robotics that facilitate the movement of goods within the supply chain, anything that can be classified as waste or that is not absolutely pertinent to the task of fulfillment has been eradicated.
The final leg of the ecommerce journey — actually delivering the purchased items to customers — can be one of the most challenging. Once packages have been loaded onto delivery vans, control can be limited. While the best routes can be mapped out with computer programs, outside forces like weather, road conditions, and traffic are unpredictable and have to be negotiated by the driver.
This final leg is termed last-mile delivery, and we’re going to examine it in detail in this blog.
What is last-mile delivery?
The term actually comes from telecommunications, where “last-mile delivery” describes the connection from the ISP to the user. For ecommerce purposes, it refers to the final stage: getting the boxed purchases from fulfillment center hubs or warehouses to the shopper. Delivery is labor intensive and can be time consuming. After loading the packages in the back of a van, a driver goes from delivery point to delivery point, physically removing one box at a time and placing them at the doorsteps of the people who bought the items.
Last-mile delivery challenges
While the most efficient route for deliveries can be worked out in advance, there’s no way to predict road conditions. Accidents can cause traffic jams; weather and police activity can shut roads down; and complex one-way systems can turn route maps on their heads. What’s more, narrow streets can be difficult to navigate and country roads can have bad signage. Then there’s the possibility of vehicle break down. If the van has a mechanical failure, delivery comes to a halt.
Finding a secure place to park
This may seem basic, but if drivers can’t find brightly lit, safe places to park, they could be open to theft. Even if they lock the van after taking out packages they’re delivering, which they should, drivers – and the cargo they carry – could be vulnerable.
Managing customer expectations
While customers may have been promised fast delivery times, sometimes as quick as the same day, the unpredictability of the journey on the road could put a crimp in that. Moreover, as much as shoppers like to track their purchases online and get excited about the estimated delivery times they see when they log onto their ecommerce sites, those expectations can’t always be met.
Balancing cost with customer expectation
Last-mile delivery accounts for up to 53% of the total shipping cost. That cost has to be weighed against all the other costs, especially if customers expect free delivery.
Last-mile delivery innovations
The final leg of the journey of a package from its distribution hub to its end destination may traditionally be difficult to control, but technological advancements and innovative delivery models are starting to appear. Here are some of the most promising ones:
Delivery robots and drones
These clever machines are able to navigate both complex urban areas and lonely, unmarked country roads, traveling along sidewalks or overhead to avoid traffic congestion, being able to traverse narrow streets without difficulty, and not having to follow complex road systems. This all adds up to faster delivery times; plus they reduce costs because they operate independently and don’t have to take meal breaks.
Delivery updates in real time
Packages are scanned when they’re put in the vans for delivery, while GPS tracks the actual location of the vans as they travel along their routes. What this means for the ecommerce company is the company has the ability to know exactly where each package is at any given time and can use that information to give customers updates on expected delivery times in real time. This is done via mobile app, SMS, or email. It may not sound like much, but keeping customers in the loop builds customer trust and encourages them to return to that company to buy something else.
Packages don’t have to be left at shoppers’ doorsteps any more; they can be dropped off at secure locations and kept in smart lockers where they stay until picked up by the customer. As soon as a package has been put in one of these smart lockers, the customer is informed and given either an access code, order number, or barcode, which they use to open the box and collect their items.
Route optimization software
As the name implies, this software takes on board all the factors that can affect last-mile delivery — like traffic conditions, road closures, and weather — and works out the best route for the driver. Taking control in this way reduces delivery costs and makes delivery-time forecasts more accurate.
Warehouse management innovations
Last-mile delivery may be separate from the processes that take place in the fulfillment center, but the more efficient these internal systems are, the sooner packages are ready to be sent out to their buyers. Nowadays, warehouse management has been taken to an ultimate level. Automation streamlines the supply chain, while robots, cobots, and sophisticated machinery make everything work like clockwork.
Best practices for last-mile delivery
There are approaches to last-mile delivery that can improve delivery times, reduce delivery costs, and leave customers feeling respected.
Keep customers in the loop at all times.
When someone orders something online, they want to know when it’s going to arrive. Being able to check on this and see exactly where their package is in the system at all times is not just part of the online shopping experience, it’s the part that gives customers almost as much pleasure as choosing and receiving their items. In other words, it’s important. So it pays for the ecommerce company to keep their customers in the loop, in real time, updating them on the status of their packages either by SMS, mail, on their website, or on their app.
Invest in data analytics.
We’ve already mentioned route optimization software, but data collected on all aspects of last-mile delivery can be analyzed and used to streamline and improve deliveries even more. Data should cover everything from the time it takes to deliver a vanload to driver availability to the gas used to the number of breaks a driver takes. By analyzing data, companies can make informed decisions on such matters as the number of drivers they actually need, what delivery routes to prioritize, and the optimum number of packages each driver can successfully deliver each day.
Offer flexible delivery options.
Give customers a better shopping experience by letting them choose when and how they want their packages delivered. This could be in the form of a time window — delivery between given times — or a location that’s different from their address. It’s all about giving shoppers what they want, which is something that will turn them into repeat customers.
Monitor and measure performance.
It’s important for an ecommerce company to keep an eye on their business and to quantify the performance of each department. That’s how shortcomings are identified, and areas that need improvement come into sharp focus. This is done by monitoring key performance indicators (KPIs). When it comes to last-mile delivery, the important KPIs are delivery times and delivery accuracy. Tracking them ensures that targets are being met.
One of the most overlooked ways to improve delivery is by automating the whole fulfillment process with an inventory management system. Our system, Cin7 Core, has powerful features that include integrated shipping options and real-time data analytics. It can also help you optimize delivery routes and reduce delivery times, improving your customers’ experience overall.
If you’re ready to take your last-mile delivery operations to the next level, book a call with the experts at Cin7 today.