The e-commerce industry in America has been growing by leaps and bounds every year, with consumers spending some $870.78 billion in 2021, a 14.2% growth over the previous year, says a Digital Commerce 360 report, quoting the Department of Commerce. However, with customer demands and expectations increasing considerably, businesses are constantly looking for quick but cost-effective delivery options. The last-mile delivery is perhaps the most crucial for satisfying customers and ensuring their loyalty, however, it is also among the most difficult to execute due to its challenges. Some of the more critical last-mile challenges that online businesses have to contend with:
Lack of Visibility
One of the most important perquisites for customer trust and loyalty is the visibility of the consignment. Buyers need to be kept in the loop regarding the status of their orders so that they know when they will reach them. While online businesses routinely offer tracking codes, customers are nowadays more demanding and want information in real-time regarding the movement of the package. Businesses should implement delivery management software offering real-time status to offer the desired last-mile delivery transparency. Businesses can also partner with a shipping logistics company that will generally have such systems in place.
High Cost of Delivery
The last-mile delivery tends to cost businesses a lot because of the need to set up infrastructure that can perform reliable and is scalable to meet sudden peaks in demand. They also need to allow additional money for complex routes, long distances, failed deliveries, staffing, and fleet maintenance. Also, businesses need to contend that if they pass on all the costs of making the delivery to the customer, the high figure can deter customers, and they will typically abandon their shopping carts. Merchants, therefore, usually find it more economical to partner with logistics companies because they can distribute the costs over more customers and plan their routes and fleet strength more efficiently.
Customers are notoriously impatient, and they expect quick deliveries of their orders. They will actively look for merchants that will deliver quickly. As a result, many online businesses are working on a distributed warehousing model that enables them to deliver the same day or the next day. However, timely deliveries remain a bugbear of most businesses and can hurt their reputation and negatively impact customer loyalty. A robust last-mile delivery plan in partnership with a reliable logistics partner is the solution.
Poor Route Planning
Route planning of customer deliveries can make or break the efficiency and effectiveness of the last-mile delivery. Many factors need to be considered when optimizing the route plan. On one hand, customers want the quickest delivery, and on the other, businesses need to keep a lid on the costs. Effective route planning helps achieve a proper balance of satisfying customers and optimizing costs.
Rather than viewing last-mile deliveries as an obstacle, smart online businesses can use it as a competitive differentiator to win over customers. Businesses need to implement efficient and reliable delivery systems, offer transparency and consignment visibility to customers with advanced technological solutions, and ensure the delivery team and customers communicate with each other smoothly.