Today, we’ll be discussing delivery logistics. Specifically, how vehicle routing and scheduling work as part of supply and delivery chain logistics.
Delivery Tactics to Grow Your Operations (in 2022)
Here are 12 proven tactics to drive growth in your delivery operations. Best of all, each strategy lets you scale your delivery as you thrive.
This post contains 12 proven tactics to grow your delivery operations in a matter of days.
Not only that, but each strategy lets you scale your delivery as you thrive.
And no matter how much or how fast you expand, implementing these tactics allows you to keep up with the rising demand at all times.
Best of all, you’ll get a chance to try one tactic out at the end.
So, ready to get more customers to use your delivery services?
Let’s get started.
12 Tactics to Grow Your Delivery
- Start small and build your delivery from there.
- Increase the route density of your delivery.
- Keep track of your cost per delivery.
- Focus on customer convenience and reliability.
- Move your product and service offers online.
- Offer same-day delivery to your customers.
- Re-target inactive customers and accounts.
- Use the physical store as your supply depot.
- Brand your delivery fleet vehicles.
- Invest in delivery management software.
- Let customers select delivery dates and time windows.
- Optimize your delivery routes and drop-offs.
1. Start small and build your delivery from there.
How far are you willing to drive to fulfil an order? This question has to be at the top of your list as you launch your delivery service.
Not to mention if you start too small, you risk growth over profitability. And profit margins, if you start too big.
Basically, the larger the delivery area you have to cover, the larger your market. But, at the same time, the longer it takes to deliver an order.
So, the best solution is to start small.
Start with a delivery area that covers just a 5-kilometre radius. In doing so, you get a sufficient route density despite low initial order volumes.
Not to mention, you improve the fulfilment speed of your delivery. You can entice customers with next-day or same-day delivery and grow despite big-name competitors like Amazon or Walmart.
From there, you can always expand your operations down the line. It’s much harder to shrink your operations once you have already settled on an area and started delivering to customers.
2. Increase the route density of your delivery.
How many drop-offs does your delivery agent complete per hour? The answer to this question is your route density.
Simply put, the higher your route density, the less it costs to fulfil each order.
And it’s simple logic. If you pay a delivery driver £20 an hour, and he makes four drop-offs at that time, you pay £5 per delivery. That’s not very sustainable.
On the other hand, if you increase his route density by half so that he fulfils eight orders, your cost per delivery goes down to £2.5. And this dramatically improves the cost-efficiency of your operations.
Not only do you lower costs, but it also means you don’t have to pass on this cost to your customers. This leaves you more room to create better offers, like free delivery.
In doing so, you attract more customers and raise order volumes. Thus, you go full circle, since higher order volumes mean higher route density.
3. Keep track of your cost per delivery.
Cost per delivery is one of the key metrics in delivery logistics. It answers the question: How much does it cost to deliver each order?
Often, it is also the single most expensive activity of your organization, besides production or product acquisition.
But unlike procuring goods for your business, you can improve the cost-efficiency of fulfilment operations. And that’s because there is more than one way to calculate your cost per delivery.
Specifically, there are three ways you can do this. You can choose to calculate it based on distance (mile/kilometer), type of delivery (ordered item), or type of vehicle.
In each case, you use the selected parameter to divide the total cost of delivery. Usually, this means payroll, fuel consumption, and vehicle maintenance.
Here’s the formula when calculating cost based on total distance:
After that, you can use these average costs to find opportunities to optimize your operations and reduce cost without affecting output.
4. Focus on customer convenience and reliability.
Convenience is the driving force of modern delivery. And if you want to take advantage of this potential, it’s necessary to shape your offer based on those desires.
When it comes to delivery, customers want speed and reliability above everything else. If you can offer them same-day delivery, they will choose to do business with you.
At the same time, if you pledge to offer faster delivery, you have to make good on that promise.
A bad experience can have a much bigger impact on how customers perceive your brand than five good reviews. So, it’s vital that whatever you offer you make the utmost effort to fulfil it.
5. Move your product and service offers online.
In-store shopping is in decline. In 2020, retail sales dropped by 16.4 per cent and continue to plummet thanks to the COVID-19 outbreak.
But if the state of delivery in time of the coronavirus has shown us anything, it’s that consumers want goods delivered at their door.
So, it’s vital that you move your offer online, and start selling your products or services from your website as well.
Creating an online presence opens your business up to new customers. It lets you access a wider audience where more opportunities can emerge to quickly raise your order volume.
Technically, this also means expanding your delivery area. But using dedicated delivery providers removes some of that burden.
Contracting a third-party logistics company or courier until you scale operations is a great way to handle more business without too much investment. In fact, that’s what Amazon does even now.
Despite the disadvantages of outsourcing country-wide delivery to a dedicated provider, the benefits of online sales far outweigh them.
6. Offer same-day delivery to your customers.
Fast delivery is changing the way deliveries work. Same-day delivery combines the convenience of online shopping with near-immediate access to a bricks-and-mortar store.
In that sense, it is a great way to increase your consumer base. The bad news is that it isn’t easy to achieve.
In fact, not even Amazon can maintain a balance between the cost and profit of their shipping service. But despite this, there are ways you can achieve same-day delivery.
The best solution is to put a price on fast fulfilment because customers don’t mind paying for it.
As a matter of fact, statistics show that 88% of customers are willing to pay an extra fee if it means they will receive their orders faster.
And that’s good news if you plan to cover a large area. But on the other hand, you can already offer fast delivery at the local last mile.
Local rapid fulfilment helps you create a reliable service your nearest customers will use and value.
But that also means removing non-essential steps in your operations, so you can reduce delivery cycles and increase the speed of your delivery.
And when it comes to that there is a clear correlation between same-day delivery and delivery management software.
Using this kind of technology helps you find wasteful processes and optimize your operations for greater efficiency and cost-effectiveness.
In doing so, you will be able to create a level playing field that allows you to attract customers and grow your business with same-day delivery.
7. Re-target inactive customers and accounts.
If you already have an established delivery, but struggle to maintain regular order volumes to sustain it, it’s worth taking the time to contact your old customers.
Re-targeting inactive customers is a great way to detect untapped markets.
Reconnecting with them can help you uncover why those old accounts stopped doing business with you in the first place.
Perhaps, they may have gone to your competitor due to a better deal or the prospect of free delivery. But now things might be different. It’s up to you to find out what it will take for them to switch back to you.
Even if things don’t work out like that, the feedback you receive is valuable to your efforts to improve customer experience and growing your business.
8. Use the physical store as your supply depot.
Starting an internal vs. external delivery fleet requires several investments. And supply chain infrastructure is just one of many that can push back the launch of your delivery service.
However, you can make use of what you have to reduce those costs. One way is to use your physical store as a supply depot.
At the front of your store, it is business as usual. While at the back, your storage facility becomes a depot location where drivers can come to pick-up their next delivery.
This also makes it easier to track and monitor inventory levels. Better inventory tracking can increase your order frequency, which reduces the time it takes to sell your stock.
It even allows you to stock vehicles with customer favorites so drivers can upsell the best selling products upon drop-off.
All of this helps to increase profit. And with more capital at your disposal, it’s easier to invest in infrastructure, equipment, and the workforce which drives the growth of your operation.
9. Brand your delivery fleet vehicles.
Branding is how customers take notice of your business.
Out of sight is out of mind. But if customers see vans that carry your company logo crisscrossing around town, you are always on their mind.
Think about delivery. What is the first one that comes to your mind?
If you’re like most people, you associate delivery fleets with big-name brands, like Coca-Cola, FedEx, UPS, Domino’s, Amazon, Walmart, and others.
And that’s a big benefit of operating a private fleet. You get to promote your brand for free.
And since you already have all of the potential to promote your brand standing in your parking lot, unleash it and attract more customers. The business it brings can help scale your business in return.
10. Invest in delivery management software.
The emergence of innovative technology is a major disruption in delivery, as in all aspects of a business.
In fact, most companies agree that 44% of businesses plan to increase their tech spend in 2020.
When it comes to deliveries the story is similar. More and more companies are investing in new software solutions.
Unlike previous on-premise or legacy systems exclusive to large companies, modern SaaS solutions are adopting the cloud-first approach to delivery logistics.
That makes them much more flexible, affordable (even for small businesses), and with a greater range of capabilities. These usually include some or all of these features:
- Routing and planning
- Operations management
- Fleet management
- Customer experience
- Insights and analytics.
Technically, using a delivery management platform gives you the functionality of multiple disconnected apps on one system.
And as you scale, you won’t have to invest in another solution. All you might need to do is expand the package you are on, to account for the growth.
The software also easily integrates into a broader ecosystem. You can use APIs to connect with complementary solutions like Shopify.
Likewise, the system can integrate with emerging technologies.
For example, use eLogii for data processing and AI algorithms to increase visibility and customer service in their last-mile operations.
All in all, when you take into account all of the core functionalities and potential future use, this software is a worthwhile investment for any delivery.
11. Let customers select delivery dates and time windows.
Contemporary customers want more control over their deliveries. Not only do they want to choose how fast their orders arrive, but when they arrive, as well.
That’s why letting customers choose their preferred delivery date and time window is the mark of great customer experience. And dividing your delivery schedule into two or three slots is the easiest way to do this.
For example, you can split deliveries into mornings (9 a.m. - 12 p.m.), afternoons (12 p.m. - 5 p.m.), and evenings (5 p.m. - 9 p.m.).
Giving customers the option to hand-pick more precise ETAs allows them to plan their day around the drop-off. This significantly lowers the chance (and cost) of missed deliveries and returns.
The downside is that you relinquish some control delivery scheduling and route planning. But this is where the final tactic on our list comes into play.
12. Optimize your delivery routes and drop-offs.
How do you manage drop-offs? Are you manually planning routes? Did you know there is an alternative? It’s called route optimization software.
Planning routes automatically takes away the burden of manual planning, which is a time-consuming process that isn’t very cost-efficient.
The process also usually depends on the work of one person. This is wasteful of your human resources and their time, which could be better spent on, for example, building an agile delivery operation.
Instead, route optimization software lets you plan multiple routes with multiple drop-off sites in seconds. And since most modern solutions have easy-to-use UI, the learning curve is quite low.
That means anyone in your organization can use it to optimize the output performance of the entire operation. Besides this route optimization software helps you:
- Identify most-cost effective routes
- Reduce total distance for each route
- Increases the number of drop-offs
- And more.
After you integrate route optimization into your system, you let customers select the time of delivery (as mentioned), track their delivery in real-time, and provide more accurate ETAs.
In doing so, you raise customer satisfaction to a higher standard of quality.
And the best part is that most modern delivery management solutions contain a route planning module.
So, you won’t have to invest in two different tools to improve the performance of your delivery.
Now, it’s all up to you.
What tactic will you use to expand your delivery operation?
A lot of these tactics are simple decisions and you can implement them straight away.
But some of them, like using delivery management software, take time and testing.
And that’s why we let you explore this strategy for yourself right now.