In this article, you’ll see seven proven last-mile delivery solutions you can use to scale your operation.
Last-mile delivery is a crucial step in the supply chain. After all, it’s how products reach their final destination - the customer.
With these tips and strategies, you’ll be able to:
So, if you want to know how to keep up with the demand, you’ll enjoy this article. And the seven tactics that we’ve prepared.
Let’s get started.
Is last-mile delivery a central service and “the future of B2C”?
Absolutely!
In fact, the state of the delivery in time of the coronavirus has shown us as much.
But it’s also an opportunity. And 66% of your customers agree with us.
Why is last-mile delivery important?
The main reason is customer expectations.
More and more customers want to shop from their home. And delivering the purchase to their door is a vital part of eCommerce.
But it’s also the new battleground for business. And the place where you can gain a competitive advantage over your competitors.
That’s because consumers want an exceptional delivery experience. And companies that can provide it can win over customers.
But it also means that businesses need to rethink the last mile. And you have to change the way you manage your operations to meet these new high demands.
Otherwise, you won’t be able to adjust to the new mindset of the market quickly enough to make an impact.
As strange as it sounds, customers want to have more say when it comes to how you deliver their goods.
From deciding when and where to drop it off, to how long they’ll have to wait, how much all of that will cost, customers want to be involved in last-mile delivery.
So, what does that mean for you?
For one, your customers want speed. People simply don’t want to wait for their orders to arrive anymore.
In fact, 55% of customers in the US prefer same-day delivery more than any other wait time.
So, the expectations of faster delivery is a reality. And same-day delivery is now a normal option that customers expect to see at checkout.
Besides choosing when the delivery arrives, customers also want more possibilities when deciding where you deliver it.
Because of COVID-19, we saw the invention of click & collect, in-store delivery, and curbside delivery.
Now, customers expect to choose whether you deliver their order to a locker, trunk of their car, or to leave it in front of their door.
But for all the demands customers make, they still don’t see delivery as a central service.
That’s why 44% of consumers don’t mind waiting more on their order if it means you’ll deliver it for free.
And it’s also why 95% of consumers see free one-day delivery as the ideal option.
Add to that even more demands like order tracking, and the cost of the last-mile can seem unsustainable.
Unless you can find ways to make it efficient at scale.
#1 Automate the last-mile delivery
#2 Optimizing delivery routes and increasing route density
#3 Outsourcing to local carriers
#4 Use local stores as distribution centers
#5 Offer same-day delivery
#6 Update customers on delivery status
#7 Maintain the integrity of your last-mile even at scale
Automating last-mile delivery means using software to streamline how you plan and manage the delivery process.
Various last-mile delivery software makes it easier to scale your organization. While allowing you to build an agile delivery that efficiently handles operational capacity at scale.
You can use software to automate almost any delivery process or operation:
Technically, the software lets you automatically complete all of these tasks. That’s much easier and faster to do at scale than using pen and paper, spreadsheets, or several disconnected apps.
In recent years, these types of software solutions have become even more sophisticated.
Let’s take delivery management software, for example.
It’s an end-to-end solution. It lets you manage last-mile deliveries in every ecosystem on one platform.
But at the same time, it’s a SaaS solution that adopts a cloud-first approach to managing delivery logistics.
The software has built-in features and capabilities for route planning or dispatching. But it can also connect to other apps via APIs.
That allows you to handle every process in the life cycle of every delivery on one central dashboard.
For example, the software can directly turn orders into delivery tasks as they arrive (via your order management system).
So, automating at scale becomes a question of whether you want to centralize or not to centralize your delivery.
But taking a holistic approach to managing your delivery also gives you greater control and visibility over the operation.
It’s easier to see what’s going on at the granular level. But it’s also simpler to evaluate performance, find opportunities to optimize and remove waste.
At scale, that means you can raise output without actually increasing the size of your delivery or investing more funds.
And it also helps you to cut operational expenditure by making the delivery process more cost-efficient.
Driving from location to location is by far the most expensive activity in delivery. It’s also the one that creates a lot of waste. The solution: route optimization.
Optimizing delivery routes helps you to scale up the output of your delivery fleet. While scaling down the resources you waste.
But how do you optimize delivery routes?
Simply put, you have to find the best route from point A to point B to point C… for each task and vehicle in your fleet. That doesn’t necessarily mean the shortest route, but the most efficient one.
For example, you waste a lot more time and fuel if a shorter route passes through areas with a lot of traffic congestion.
So to optimize routes you need to take into account different factors on the road like:
But also various operational constraints, such as:
But manually finding the best route based on all of these parameters takes a lot of time. So, it’s necessary to automate the last-mile. And use route optimization software to help you.
Route optimization software takes all of these factors into consideration and gives you the most optimal route with multiple stops automatically and in seconds.
It also means that you make the best use of resources regardless of the size and shape of your fleet.
Likewise, you don’t have to rely on fixed routes, but you can dynamically modify them based on new or changing data to reduce operating costs, even more.
At the same time, using software makes it possible to increase the stop density of your routes.
When you increase the number of stops per route while decreasing the drive time to each one, you immediately lower the cost per delivery.
And while the cost reduction isn’t as drastic when you only complete five drop-offs per route, when you scale it to 30+ drop-offs for 10+ vehicles the amount of money you save on each delivery is significant.
And that makes your delivery faster and more affordable to sustain. While customers, on the other hand, get their goods delivered sooner and at a lower rate.
Which raises their satisfaction and makes you more competitive, and allows you to grow and scale your business.
Outsourcing the delivery service to a carrier isn’t anything new. In fact, many companies still use the post, or courier companies like DHL, FedEx, or UPS to send purchased goods to their customers.
It makes sense to use them if you:
After all, it’s not like you have an extended global network like DHL. Nor do you use custom-built tools like the UPS route optimization software.
So when deciding between an internal vs external delivery fleet, many choose to outsource their operations to a 3PL.
But in recent times, companies are going with local carriers, instead of big-name brands.
Local carriers are better suited to servicing the local last-mile. Typically, they have multiple depot locations and greater knowledge of the area. Which means they are faster and more reliable.
At the same time, they work with lower delivery volumes. Which means you can get better rates if you agree to let them handle all or most of your business.
And because they are smaller, communication is streamlined, so you can scale up or down the number of deliveries you outsource at any given time.
That ensures there is no waste of resources or disruptions to your delivery.
Regardless of whether you outsource or use your own fleet, using physical stores as depot sites lets you quickly scale your supply chain network to meet the new or growing demand for your service.
Without the deep pockets of Amazon or Walmart, many SMBs are using this model to overcome the challenges of delivering goods in dense urban areas.
The store remains a point-of-sale at the front. While at the back, you use it as small warehouses for sorting orders.
In doing so, you minimize the resource requirements for setting up a supply chain, while raising the number of depot sites in the city.
And with more depot sites, you can evenly distribute inventory across the supply chain. Which means you raise the rate at which drivers can collect orders or resupply their vehicles.
At the same time, it makes it easier to plan pick-ups and drop-offs since you can categorize orders into destination zones based on the location of the store.
All of this means that you can easily scale up your operations. While keeping costs at a minimum by loading deliveries from the “back yard”.
Even managers in Amazon started to refer to last-mile delivery as “last-yard” delivery.
Speed is becoming the most sought after commodity of last-mile delivery. Customers want you to deliver them their items almost as soon as they buy them.
And when you want to scale your operations quickly is to grow profit by offering speedy delivery. Enter same-day delivery.
According to McKinsey:
Same-day delivery combines the convenience of online shopping with the immediate product access of stationary retail.
So, this type of fast delivery can help you to attract more customers. And as more customers start using your delivery, they’ll bring in more profit which you can use to grow your business.
But the last-mile is hard to manage without delivering an item on the same day as the customer orders it. So, again you’ll have to use software to help you.
Using delivery management software helps you to identify wasteful processes. More importantly, it allows you to optimize operations for better performance.
And that means faster delivery at a lower cost.
It also helps you to remove non-essential steps from your operations. Doing so lets you reduce delivery cycles and increase the speed of your delivery even further.
Once you have all of that in place, you can start offering same-day delivery. And once you do, you’ll gain a competitive edge with which you can scale and grow beyond measure.
Delivery still isn’t an essential service. Not all customers want to use it, especially if they have to pay for it.
So, how do you impel them to use it? You give them what they want. And you make them feel safe about their decision.
The only way a customer will trust you with the delivery of their purchase is to involve them.
One way to do that is to let them know where their order is at all times by giving them the ability to track it.
Using routing software allows you to create tracking links. These links let the customer see where their order is in real-time.
Updating customers about the status of their delivery and notifying them when it arrives makes them feel safe about their decision to do business with you.
In fact, 73% of customers said that notifications were a crucial factor when deciding to buy online and have the order delivered to their homes.
So, if you want to hook more customers to use your delivery give them what they want. And let them see what they bought.
Regardless of the number of orders you fulfil, it’s critical to maintain the integrity of your last-mile even when you scale your delivery.
If you commit to delivering a product by a specific date and time, then deliver it on that date and by that time.
Otherwise, you risk doing one-time deals with customers. And as Kevin Kelly suggests, it’s far more lucrative to have 1,000 true fans and do repeat business than to find new leads and prospects.
So, how do you ensure the integrity of your last-mile delivery at scale?
You focus on delivering value and a positive experience by making good on your promise.
And for that, you need to have a robust last mile. That’s easier said than done. Nevertheless, it’s possible.
Align accuracy and customer experience with speed and efficiency, and make sure everyone is on board.
Then take steps that make it easier to follow through. For example, if you allow customers to choose the date and time when they want the delivery to arrive, do it so you don’t put too much pressure on your staff.
Instead of letting customers choose the exact time of arrival, let them choose a specific time of the day.
That can help you to create better delivery schedules that work both for your drivers and customers.
Likewise, you can use last-mile delivery software to give customers tracking links where they can see more precise ETAs once their order starts moving.
All of this lowers the chance of missed deliveries while providing the best experience. And maintain the integrity of your service. (Regardless of how many orders you deliver in a given day)
Last-mile delivery is a very competitive arena in the age of eCommerce.
With rapid and free delivery, Amazon is at the forefront of that race. And the one that’s setting the pace for consumer expectations.
To compete in this space, you’ll have to adopt a last-mile delivery strategy. And find solutions that can help you to grow and scale operations as you grow.
Remember that it isn’t always crucial to have same-day delivery or free shipping. But it’s critical to keep up with the changing tide and find solutions that suit your delivery.
No one is sure what the future holds for eCommerce and last-mile delivery.
But right now, customer expectations have never been higher when it comes to how you deliver their goods. Customers have never had so many choices. And they’ll continue to want more for less.
So the only way to match these expectations is to use modern delivery solutions to scale. And go the extra mile to improve the final mile of delivery. We can help you with that.
We have everything you need to start improving your delivery.