The Art of Last-Mile Delivery: How to Impress Your Customers and Boost Your Business

The complexity and expectations of last-mile delivery have increased as global e-commerce revenues are expected to reach $5 trillion in 2022 and $6 trillion by 2024.

A crucial part of the customer experience is the last-mile, since this is where brands interact most directly with their end users. A positive customer service experience, per Salesforce research, boosts the likelihood of repeat sales by 89%. Retail and logistics businesses must therefore use last-mile delivery technology to manage the complexity and meet or exceed customer expectations.

This blog article will discuss the finer points of last-mile delivery and offer advice on how to wow clients and grow your clientele.

What is last-mile delivery?

The first mile, the middle mile, and the last mile are three crucial milestones in the supply chain process.

Even though every stage of the supply chain is crucial, the final mile is where the biggest difference in the customer experience is made. Customers might decide to use a competitor in the future if they receive a delivery that is late, damaged, or worse yet, never arrives at all.

In essence, the final mile is a critical point where companies can bring their values, brand promise, and customer pleasure to their clients' doorsteps.

What is the last-mile problem?

Short delivery windows, same-day delivery expectations, fuel expenses, unexpected route changes, missed deliveries, and high customer expectations are just a few of the variables that contribute to the last-mile dilemma. As fast and effective delivery is a crucial component of client satisfaction, fleet managers are responsible for satisfying these high consumer expectations.

In fact, the last mile is also the most expensive and time-consuming phase of the shipping process, accounting for up to 53% of total shipment costs.

Source: Last Mile Delivery Explained: Trends, Challenges, Costs & More (merchantsfleet.com)

Why is last mile delivery so complex?

Last-mile delivery includes picking up orders from anywhere, including distribution centers, retailers, and dark stores, and loading vehicles across multiple nodes quickly and efficiently.

The vehicles are then directed to multiple destinations, including homes, stores, or a variety of pick-up points. Businesses must include adaptability, speed, and visibility in their delivery networks if they want to provide customers with exceptional delivery experiences.

Businesses can successfully navigate the complexity of last-mile delivery by:

  • Ensuring all stakeholders can track their order status and delivery progress;
  • Optimizing delivery routes to increase efficiency for both deliveries and return pickups;
  • Equip drivers with automated, dynamic, and efficient routes to simplify their delivery process;
  • Establishing effective shipper-carrier relationships by using automated carrier rate selections to achieve on-time deliveries at the lowest possible cost.
  • Minimize delivery anxiety by providing ETA updates via SMS and real-time order tracking via email throughout the order-to-delivery process.

Fortunately, technology offers various solutions to overcome last-mile challenges and create long-term efficiencies, such as optimizing shipping, tracking, executing, and routing to ensure the delivery experience exceeds consumer expectations.

The challenges of last-mile delivery

#1 Consumer behavior

As a result of the rapid development of new technologies, consumer habits, and behaviors have undergone a significant transformation. Traditional shopping channels have been replaced by e-commerce, which enables customers to compare multiple products from the comfort of their homes. Last-mile distribution has become an essential component of the global supply chain in response to this shift in consumer behavior.

Customers now have higher expectations for product quality, differentiation, and customization, and delivery time has also undergone a significant change. Waiting for several business days to receive a package is a thing of the past, as modern consumers expect deliveries to be made the same or the next day. The modern consumer wants everything now. In fact, fast and free shipping is a crucial factor in the decision-making process for 79.8% of people who shop on Amazon.

As a retailer, one of your biggest challenges is likely competing with Amazon's delivery services. However, there is good news on the horizon. Since the start of the COVID-19 pandemic, consumers have become more patient and tolerant of delivery delays.

However, they also show less brand loyalty in 2020, making it crucial for retailers to minimize delays and win over customers this year. To achieve this, companies must re-think and re-design their last-mile delivery strategy and incorporate different delivery tactics to improve operations. It is essential to ensure that online services are both profitable and agile, in order to meet and exceed customer expectations.

#2 High cost of last-mile delivery

While high delivery costs are not a new problem for companies, the pressure on budgets has increased due to higher customer standards. Despite many customers being willing to pay for expedited deliveries, it is challenging for most companies to offer this service without incurring losses. The expectation for same-day deliveries has a significant impact on the budget, with 28% of the entire delivery cost attributed to the last-mile. While this cost is typically passed onto the user, it can harm the company when this is not feasible. Additionally, irregular demands such as increased purchases during the holiday season can have a significant impact on online retail.

#3 Transparency

Transparency has become a crucial aspect of modern business, as humans have an innate desire to understand and know everything. In response to this, many businesses, including 3PL providers, have begun to generate tracking codes to provide greater visibility and insight into the delivery process for both operators and users. This increased transparency has become a key element of the modern business landscape.

In addition to being naturally curious, consumers today have high expectations and are not easily satisfied. Tracking codes are no longer enough to meet their needs. In fact, customers now demand absolute real-time visibility into the last-mile delivery process. This means they want to see every step of the journey, including the driver's location and the estimated time of arrival, even for same-day deliveries.

Delivery management software has emerged to provide customers with real-time updates and ETAs throughout the shipment process, allowing them to track their packages until they reach their doorstep. While Uber may have pioneered this trend, it is now a standard expectation for all deliveries. As a result, real-time visibility has become one of the top forecasted delivery management trends, and businesses must incorporate this into their last-mile delivery strategy to meet the growing demands of their customers.

#4 The efficiency problem

Efficiency is key in the world of last-mile delivery, as it is a top priority for both customers and companies alike. With the increasing demand for same-day and last-mile delivery, technology has emerged as a crucial player in streamlining the delivery process. Delivery logistics management relies on last-mile delivery software to meet customers' expectations and optimize operations from the warehouse to the buyer's doorstep.

This software enables companies to easily re-route their workforce in response to last-minute changes, helping to minimize delays and increase efficiency in the last-mile delivery process. The software leverages route optimization, dispatching, delivery analytics, proof of delivery, and customer alerts to ensure businesses stay in constant communication with their customers and speed up deliveries, particularly in the case of difficult address locations. By incorporating last-mile delivery software into their strategy, companies can achieve greater efficiency and meet the high expectations of their customers.

#5 Address location & delivery allocation

The majority of failed deliveries are a result of incorrect addresses, and this issue should not be underestimated. In fact, the cost of a failed delivery can be as high as $16.58, highlighting the severity of the problem.

One of the main causes of incorrect addresses is the manual planning of deliveries by many brands, which leaves room for human error. To mitigate this issue, companies should consider implementing more advanced solutions, such as last-mile delivery software, to optimize the delivery process and minimize the risk of incorrect addresses. By leveraging technology, businesses can significantly reduce the number of failed deliveries, improve customer satisfaction, and ultimately drive business success.

 

 

#6 Route optimization

Route planning can be a daunting and confusing task for those who are not professionals in the field. It involves a variety of factors, from fuel efficiency to environmental regulations, and plays a critical role in last-mile deliveries.

Route optimization not only impacts costs but also directly affects the estimated time of arrival (ETA), making it a key element of successful last-mile delivery operations. Routing delays can be frustrating and detrimental to both businesses and customers, especially with road works, stoplights, traffic congestion, accidents, and unexpected situations on the road. Rural customers can also present unique challenges, requiring delivery agents to travel beyond the boundaries of the city.

Despite the complexities involved, route optimization is a necessary aspect of last-mile delivery. Fortunately, there are several ways to improve routing efficiency, including the use of route optimization software. It is also important to consider the density of last-mile deliveries to optimize routes effectively. By adopting these strategies, businesses can ensure timely and efficient deliveries while reducing costs and improving customer satisfaction.

#7 Last mile delivery density

Delivering packages in densely populated urban areas such as London or New York presents a significant challenge for any company. High order volumes and the expectation of same-day delivery make this undertaking even more daunting. Companies must balance their capabilities with their capacity to find the best last-mile delivery scenario, and this requires the use of technology.

Delivery management typically involves four different use cases:

  • high-density long distances,
  • high-density short distances,
  • low-density long distances,
  • and low-density short distances,

each of which presents its unique challenges.

Last-mile delivery software helps streamline operations and increase capabilities while optimizing resource usage, making it a powerful tool for managing each of these scenarios. By leveraging technology to improve last-mile delivery, companies can efficiently and effectively meet customer demands, even when demand exceeds capacity.

#8 Friction

Achieving a frictionless delivery is essential for improving last-mile performance and reducing costs. One of the biggest causes of friction is managing customer inquiries and requests regarding the timing and method of delivery.

Technology plays a crucial role in creating a frictionless delivery system as it facilitates communication between delivery agents and customers. By implementing last-mile delivery software, businesses can reduce the likelihood of customers contacting customer service, saving both their time and the time of company employees. Automatic notifications can be set up through delivery management software, reducing the need for direct communication between customers and employees while still providing customers with the necessary delivery information. The more information customers receive, the less likely they are to become frustrated and cause friction with employees. By implementing a frictionless delivery system, businesses can improve the overall delivery experience for their customers, reduce costs, and streamline operations.

#9 Covid 19

The COVID-19 pandemic has posed a new challenge to last-mile delivery logistics, which must be addressed to maintain efficiency and customer satisfaction. As more people are confined to their homes, online shopping has surged, increasing the demand for high delivery volumes.

While this presents an opportunity for more business, it puts a lot of pressure on companies to meet the rising expectations for faster delivery. Despite the increased order volumes, customers still expect fast options such as next-day and same-day delivery.

However, the pandemic has also caused job losses, making free delivery a crucial factor in attracting potential customers. Therefore, offering a free delivery option is essential for companies to appeal to a large target group in the current environment.

Optimizing last-mile delivery

Businesses can adopt various strategies to overcome challenges and optimize last-mile delivery, such as route optimization, real-time tracking, and customer communication. Route optimization is a critical aspect of last-mile delivery as it can significantly reduce delivery times and costs.

With the help of route optimization software like RoutesPro, businesses can calculate the most efficient and cost-effective routes, taking into account factors such as traffic patterns, road closures, and delivery windows. This ensures that deliveries are made on time and within budget.

Real-time tracking is another essential strategy that provides customers with up-to-date information about the delivery status and potential delays, managing their expectations and providing transparency into the delivery process.

Finally, communication is vital to optimizing last-mile delivery. By proactively communicating with customers through various channels such as delivery notifications, customer support, and feedback mechanisms, businesses can provide exceptional customer service and manage customer expectations.

How RoutesPro can help

RoutesPro is a powerful software tool designed to optimize last-mile delivery operations and improve the overall customer experience. Its unique features help businesses streamline their operations and increase efficiency.

One of the key features of RoutesPro is its route optimization algorithms, which calculate the most efficient and cost-effective routes for deliveries. This results in reduced delivery times and costs, ultimately improving operational efficiency and customer satisfaction.

Additionally, the software provides real-time tracking capabilities, allowing businesses to keep customers up-to-date about the delivery status and potential delays. This information helps manage customer expectations and provides transparency into the delivery process.

Lastly, RoutesPro offers a comprehensive CRM platform that enables businesses to manage customer interactions and data, providing exceptional customer service.

Examples of companies & organizations that have solved the last mile delivery problem

There are some noteworthy examples of companies and organizations that have successfully tackled the last-mile delivery problem.

A prime example is Amazon, one of the largest online retailers. To overcome this challenge, Amazon has implemented a multi-faceted approach, which includes various modes of transportation such as a fleet of vehicles (including electric ones), drones, Amazon Scout, and air transport. Additionally, Amazon has launched a Delivery Service Partner Program that enables entrepreneurs to start their own logistics businesses and join forces with Amazon's delivery team.

Walmart, a major big-box retailer, is at the forefront of using innovative technologies to solve the last-mile delivery problem. They are utilizing drones, food delivery robots, and fully autonomous box trucks to deliver to customers in select locations. To further improve its delivery process, Walmart is in the process of securing a patent that combines these technologies to reduce failed ground deliveries. Their approach involves using autonomous vehicles and drones, where a drone can complete the delivery in case of a roadblock or obstacle on the ground.

Several emerging trends are expected to shape the future of last-mile delivery.

One of these trends is the use of pop-up warehouses, which involves relocating products to temporary facilities closer to customers, thereby reducing transportation costs. Another trend is advanced order tracking, where merchants provide customers with detailed, step-by-step updates on the progress of their delivery, such as mobile alerts and real-time mapping.

A third trend is the adoption of white glove delivery services, which offer customers the convenience of having their heavy or complex orders assembled and unpacked by the delivery team for an additional fee. Many third-party transportation companies also offer this service.

Electric Vehicles are well-suited for last-mile delivery due to their ability to cover a daily route on a single charge and benefit from city driving's regenerative braking. They can also recharge at night at the depot, ensuring they are ready for the next day's delivery. EVs don't emit tailpipe emissions, which exempts them from vehicle idle laws, which can result in hefty fines.

It is not new that Rapid Order Fulfillment is the next trend. Customers expect quick delivery, and businesses need to keep up with advanced ordering systems and competitive delivery times. Same-day delivery has become a popular option, but it poses challenges for last-mile delivery solutions.

Urban Warehouses located closer to cities can improve delivery efficiency by reducing route inefficiencies and the carbon footprint. They are also more convenient for workers who live or work in the city, eliminating the need for a long commute to a remote location.

In-house Delivery Services are something to look forward to in the upcoming years. While outsourcing delivery services is common, many companies find it more beneficial to have their own delivery fleet. They may rent or own vehicles for a short or long period.

Conclusions

With the continued growth of online shopping and the rising expectations for faster delivery, businesses need to optimize their last-mile delivery operations to remain competitive. The last-mile delivery process is a critical aspect of the supply chain and a crucial point of interaction between brands and their customers. It has become increasingly complex and expensive due to changing consumer behavior and expectations, high delivery costs, and the need for transparency and efficiency. By leveraging technology, adopting new strategies, and staying up-to-date on emerging trends, companies can improve their operational efficiency, reduce costs, and provide exceptional customer service, ultimately leading to increased customer satisfaction and loyalty.

Mastering the art of last-mile delivery is essential for any business looking to impress its customers and remain competitive in today's market. By implementing the strategies and tips outlined in this post, you can streamline your delivery process and enhance the overall customer experience.

However, to truly optimize your logistics and take your business to the next level, it's crucial to invest in the right technology. That's where our logistics software RoutesPro comes in. With our state-of-the-art tools and comprehensive solutions, we can help you simplify your operations, increase efficiency, and exceed customer expectations. Don't settle for mediocre last-mile delivery. Contact us today to learn more about how we can help you elevate your logistics game and take your business to new heights.

Visit our product: https://www.routespro.com/

For free consultation about last-mile delivery click here.

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WRITTEN BY

Sofia Kutko

2023-05-10

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