Retail landscape is dramatically shifting, from brick-and-mortar stores to e-commerce channels to omni-channel operations. Businesses are going online to keep pace with continuous, accessible, and dynamic customer journey.
If you are one of them too, you might be having amazing products to offer to your customers on an engaging website and/ or mobile application platform. Also, you might be making sure your quality customer support is in place so that your customer is never unhappy. You might be having proper product sourcing, packaging, and logistics strategies in place to ensure your goods are dispatched on time.
Everything said and done; do you attain success? Unfortunately no.
Understanding Last Mile Issue
You realize your product’s journey to customer is not as satisfying, short, and quick as it should be. Reason? You don’t focus on last-mile logistics which make sure products are successfully delivered on time.
Last-mile problem refers to loopholes in the final leg of your product’s journey. This means the last link through which your product is going to move from fulfilment centre to its final destination, that is, your customer’s doorstep, is an inefficient one in your supply chain.
Importance of Last Mile
Although every link within the supply chain should be robust, last mile or final mile is particularly crucial. This is because last leg of supply chain revolves around home-delivery aspect, wherein goods have to reach the spot where the customer is available.
Thus, this link is the sole face-to-face contact between the retailer and customer. Thus, this particular moment-of-truth contact needs to be strong, in that, it needs to be timely, precise, and successful as it is going to bespeak your brand and reputation.
Your contact point with your customer located at the end of last leg of your supply chain is crucial. It is an aspect that will decide the success factor of your delivery as well as your overall ecommerce business. If nailed right, it can help you strengthen your loyal customer base.
Customer today wants everything really quickly, thanks to the Internet conditioning. And, no retailer, in today’s digital world, can afford to make customers wait due to the last-mile issue. Hence, it is essential to figure out the infrastructure to make quick and damage-free home deliveries possible.
Challenges of Last Mile
Every ecommerce business and logistics service provider, small or big, has to face a common last-mile problem of delivering stuff to customer within a tight delivery-time window. Last mile poses the maximum difficulty mainly because of the following reasons:
- More and more customers are now online and are demanding products at their doorsteps. This has resulted in increase in the volume of goods shipped and returned.
- As people are working for longer number of hours in the day, it’s becoming tougher to successfully deliver the products at their homes in one go.
- Urban areas are full of traffic and remote areas take time and efforts to reach, thereby negatively impacting the economics.
- High costs and carbon footprints are incurred as many-a-times vehicles used for shipments are not fully utilized.
Solving Last Mile Issue
Expediting last-mile journey of product ensures business remains competitive and meets customers’ expectations. Hence, in spite of the last-mile distribution challenges, some businesses worldwide have come up with incredible ways to smoothen and fasten the process of last leg of supply chain. These smart businesses are employing clever ways to solve the last-mile issue for making the grand finale of their product possible, thereby enhancing the end-customer experience.
Here are some ways through which you can run the last mile effortlessly:
Outsourcing via Hyper-local On-demand Delivery Services: Zomato Order, UberEats, UberRush, Amazon Flex, Amazon Fresh, and Google Express
Hyper-local delivery services are gaining pace worldwide, thanks to ventures and businesses making use of these for delivering products to customers within defined limits of a large city. These hold true especially for online retailers aiming to quickly sell perishable goods like fresh fruits and vegetables, groceries, and gourmet food.
Online restaurant guide, Zomato, makes use of such on-demand, last-mile, hyper-local logistics firms in multiple areas for its food-ordering business, Zomato Order. This particular model aims at solving last-mile problem for restaurants and/ or cafes that either struggle with delivering food on time or don’t deliver at all.
There are other smart hyper-local last-mile distribution models running round the world. One of these is UberEats, a food delivery service, which delivers curated dishes to people from city’s restaurants within minutes.
UberRush is a local courier service that allows businesses or individuals deliver goods the same day. It also has a real-time inventory data on goods from selected, local merchants, in specific markets.
In order to expedite last-mile delivery, Amazon Flex program lets ordinary people work as independent contractors with the retail giant and deliver Amazon packages using their smartphones and cars.
Boosting same-day or overnight deliveries of fresh food-items and groceries are Google Express and Amazon Fresh. Having inventories of local stores listed on their apps, these services aim at closing the last mile between the local store and customers. There are many other players in the space viz. Instacart, Peapod, Grofers, PepperTap, BigBasket with which grocery stores and chains are partnering to reach the end-user quickly.
Making Internal Improvements to the Proximity of Fulfilment Centres: Amazon
Amazon leads the ecommerce market in many strategies. For its last-mile issue, Amazon has built a cutting-edge innovation which gives it a competitive advantage in this arena too. With its membership program of Amazon Prime, it offers free two-day shipping and discounted one-day shipping within the USA.
Amazon has a vertically-integrated product fulfilment and delivery system that sidesteps the traditional delivery companies like United Parcel Service and FedEx. In the USA, company has 79 large fulfilment centres and a fast-growing network of small sortation centres that are strategically located to minimize delivery times in major metropolitan areas. From these centres, products are sent to depots and then, to customers through the company’s own branded trucks.
Due to its speedy deliveries and, hence, providing physical-world quick shopping experience, Amazon calls itself Walmart of tomorrow.
Using Big Data for Analysing and Predicting Customer Behaviour: Walmart
No matter what Amazon is doing in the last-mile sphere to become the Walmart of tomorrow, Walmart of today is also not lagging behind. While Amazon is a biggie in ecommerce sector, Walmart is a leader in omni-channel commerce sector. As per a WSJ article, ‘Walmart is building a pair of dedicated warehouses to handle Internet orders and speed up shipments, its latest move as it tries to catch up to online rival Amazon.com Inc.’
This particular strategy is known as ship-from-store, in which store employees pack products and send these directly to customers via United Parcel Services or FedEx trucks, rather than fulfilling web orders from warehouses. The model saves time as well as money due to shorter and quicker deliveries. Also, when a store has unsold items, online orders can be directed to those stores with the maximum inventory. No wonder, maintaining and synchronizing big data is an essential component in the success if this model.
Leveraging Technology to build Better Interfaces: DPD
Dynamic Parcel Distribution (DPD), an international parcel delivery company, provides one-hour delivery window on all purchases. As discussed above, one of the challenges in last-mile logistics is that customers or recipients are on the move.
For addressing this issue, company introduced ‘know the exact hour we are coming’ notification services to recipients via email or text. This helps recipients manage their schedules. If time is not suitable to them, they can request DPD to leave the packages at a safer spot or at a neighbour’s place. If this is also not viable, there is an option to rearrange the delivery schedule at a later date. Technology also makes it possible for delivery staff to click photographs of goods left at a safe place and send it over to the recipient. This acts as a proof of delivery and prevents fraud risks within the process. These steps ensure goodwill between both the parties is maintained.
As per eMarketer, global B2C e-commerce will reach $2.3 trillion by 2017. Needless to say, supply chain is one of the most crucial ventures for an ecommerce business. Thus, with the growing ecommerce market, need for resolving last-mile issue and accelerating deliveries of goods to customers will increase.
In the past, many businesses have failed due to the lack of their last-mile management and presently, many others are struggling to figure out appropriate last-mile solutions. If you are a retailer, working either in online or offline space, your ability to fulfill deliveries on time will determine your success. Thus, you should not ignore the last-mile issue.
Take cues from what giant retailers and fresh startups round the world are doing and see what fits your model of retailing the best. By figuring out the best last-mile solution for your business, you ensure meeting customers’ expectations and winning their loyalty.