E-commerce consumers value fast, flexible, efficient, and trackable delivery, according to a McKinsey survey, and they’re willing to pay more for personalized last mile-deliveries. Creating a last-mile operation can be complex, but if done right it can encourage returning customers and word of mouth recommendations.
While companies like Amazon with earnings are forecast to grow at an exceptional rate of 45.76% per year, have their own R&D departments and the funds to conduct drone experiments, most businesses face last-mile delivery challenges with low to medium budgets. From choosing delivery partners, establishing standard operations, to integrating with the right technological platforms—every aspect of the delivery operations should be taken into account.
The following best practices can help any business relying on last-mile deliveries improve customer experience, increase operations efficiency, and reduce costs.
Tip #1: A Last-Mile Strategy Will Save You Time and Money
As Antoine de Saint-Exupéry said, “A goal without a plan is just a wish.” You may wish for a profiting business, repeat customers, and good reviews, but without a solid plan, it may never happen. For years, the last leg of the delivery chain has been causing trouble for businesses.
From delivery trucks losing packages to cyclists delivering crumpled parcels and confusing return policies, last-mile delivery is full of challenges. Investing time to create a strategic last-mile plan that clearly defines goals, policies, and standard operations can cut down costs, allow continuous analysis and ongoing optimization.
Tip #2: Make Technology Work for You
Technology has been disrupting the mobility industry for some time now with new and improved mobility innovations such as drone deliveries, autonomous and electrical vehicles, and online tracking that monitors every stage of the delivery. As e-commerce rises in popularity, more technology companies attempt to solve last-mile delivery problems.
Whether you’re considering starting a new business or already have an established company, technology can help you organize and optimize every aspect of your business. Before committing to a solution, consider the specs and how well the technology will integrate with your existing infrastructure. Make technology work for you by choosing the solution that fits your business.
Tip #3: Store & Organize Data for Real-Time and Future Analysis
A data management system is like a tree, in a way—the best time to implement one was twenty years ago, the second best time is now. Whether you have an existing IT infrastructure or you’re creating a new one, make sure to integrate with a data management system. Storing, monitoring, and analyzing data is key to business growth.
Businesses can assess daily operations and make changes when need be based on integrated business intelligence. Report modules can be customized to generate clear insights about delivery stages, routes, and customer satisfaction—information which is necessary for optimizing the last-mile delivery.
Tip #4: Invest Time in Finding the Right Delivery Partner
Say you have an e-commerce shop selling handmade fashion accessories. You take special care crafting each item, designing a branded package, and even add a personal note for your client. Now, who is going to deliver the order? A well-known currier? The local post office? Maybe you’d like your own fleet of trucks.
There are many last-mile delivery services, so make sure to choose the right one for you. Take time to research any company you consider partnering with. Find out if they have a specialization, what markets they usually cater to and what technological solutions they bring to the table. If, for example, the delivery service doesn’t offer easy technology integration, you may want to consider looking for another one.
Tip #5: Manage Customer Expectations Through Transparency
The Internet, WIFI, and smartphones have made information accessible for anyone from anywhere, and today’s consumers do their research and demand transparency in every step of the purchase cycle. From detailed product pages, to clear shipping and returns policies, and last-mile tracking—you can give your customers more control through transparency.
Tip #6: Flexible Delivery Options Increase Customer Satisfaction
Flexibility is key to ensuring customer satisfaction. With services like Amazon Prime offering same-day shipping, consumers have gotten used to fast delivery. But flexibility isn’t measured solely by speed.
If you can’t offer same-day delivery, maybe you can give your offer customized time and date delivery, or a local pick up from the closest drop station. Better yet, offer a variety of delivery options to ensure a satisfying delivery experience.
Tip #7: Money Back Guarantees & Fast Returns Increase Purchase More Than Free Returns
The estimated cost of return deliveries in the US alone should be $550 billion by 2020. As e-commerce booms, businesses rush to offer free returns as a buying incentive. However, managing returns forms a challenge that cuts into profits and, for some businesses, leads to zero profit. While technology companies are attempting to solve the problem, perhaps the best place to start is with proper and clear return policies.
According to a study published in the Journal of Retailing, a return policy should contain five criteria:
- Time leniency—how many days consumers have to return the item.
- Monetary Leniency—the percentage of money back guarantees, if at all.
- Effort Leniency—is the return process easy or complicated?
- Scope Leniency—do you allow returns of sale items?
- Exchange Leniency—do you offer refunds or credits?
Among the five, monetary and effort leniency have more influence on consumer purchase and are more likely to encourage purchase. Money back and simplicity are key purchase incentives.
Last-mile delivery is among the most important stages in the delivery cycle, yet complex logistics and inefficient operations lead to profit losses and customer dissatisfaction. Creating a viable last-mile plan is key to operating a viable business that relies on delivery experience. While the demand for efficient last-mile delivery drives technology companies to create better solutions, businesses should choose the solution that fits them best. With warehouses popping up in the city, convenience stores turning into parcel drops, and autonomous vehicles being developed for reduced delivery times—it seems like all we need is a little more time before technology turns last-mile delivery into a seamless experience for all parties involved.