With customer demand for same day or next day deliveries growing, maximizing the efficiency of last-mile delivery operations has to remain a high priority for retailers.
According to an OC &C Consumer Survey1, the shift online is increasing the cost to fulfill dramatically with a $45 item now costing $15 for a two-man delivery to fulfill. That can’t be a viable business model for any retailer.
Last-mile delivery is typically the least efficient link in the supply chain, encompassing up to 28%2 of the total cost of delivery. There are a number of reasons for that. Many of these deliveries are made to consumers’ homes, often spread far and wide in the U.S., adding mileage to the total cost and extending the timeframe. Plus deliveries in urban areas suffer from growing congestion, also slowing delivery times.
These factors are significantly compounded if the customer isn’t home to accept it, or the business you’re delivering to doesn’t have the right equipment to unload the order. According to online retail association IMRG the cost of goods from failed ecommerce deliveries is over $1 billion annually in the U.S. alone.
So how can you improve first-time success in last-mile delivery? Here are 8 ways you can help ensure that customers get their order on time the first time and consistently thereafter.
Let Customers Choose, Change Delivery Windows
Letting consumers select their own delivery windows increases the success of first-time delivery. Displaying a range of time windows on your website at the point of purchase allows the customer to make sure somebody will be home before placing the order. Offering narrow time slots is best for customer satisfaction. Having orders delivered exactly when and where they choose in a cost-efficient way is the ideal.
An omnichannel fulfillment system that offers time windows at the point of purchase and allows customers to change the time up until the day of delivery puts them in control and increases the chance of first-time delivery success.
Continuously Optimize Transport Schedule with New Orders
Customers place orders throughout an entire day, so you need an omnichannel fulfillment system that continually re-optimizes the transport schedules as new orders are added. Systems must take into account delivery areas, available resources and existing deliveries already confirmed, then analyze and evaluate possible delivery times for new orders within the requested timeframe.
By planning customer collection and home delivery service in the same system, users can maximize operational efficiency and offer a consistent, reliable service for their customers.
Use Advanced Algorithms
Omnichannel fulfillment systems require highly developed algorithms designed specifically for optimizing last-mile, road-based transport operations. Your system should use digital mapping to calculate the most effective delivery and collection sequences with accurate journey times, allocating loads to appropriate vehicles and drivers accordingly. This ensures that schedules are geographically feasible to meet promised arrival times, while improving fleet utilization and route optimization with minimal total mileage incurred and empty running reduced.
Link to Order Processing
For improved customer satisfaction look for a system that links seamlessly with omnichannel order management systems. This allows you to offer customers the ability to choose cost-effective home delivery or customer collection time slots when placing an order in store, via mobile, through customer service or online.
Provide updates via SMS or email throughout the order lifecycle so that the customer is kept up to date and can amend their time window at every step. This reduces the volume of inbound customer service calls and increase customer confidence in your last-mile delivery service.
It is important to be able to track the order from placement to delivery, ensuring all required components are progressing in a timely manner to meet the customer promise. Proactive messaging enables automated communication to keep the customer informed throughout this process.
Automated Notifications on Delivery Day
On the day of delivery, keeping real-time tabs on drivers’ exact location allows automated customer updates. Messages triggered by the driver leaving the depot, or completion of the previous job can increase the chances the customer will be there when your driver arrives.
For example, self-service text capability means customers can receive an update saying, “We’re 30 minutes away – are we still okay with this delivery time?” If the customer is stuck in traffic, they can choose a later time slot.
Use Proof of Delivery
Electronic proof of delivery (EPOD) is a key requirement in completing the entire end-to-end order fulfillment process. This ensures confirmation of successful deliveries and required information like photographs, notes and signatures to manage delivery issues in a timely manner.
William Salter is President and CEO of Paragon Software Systems
1 Reinventing the Last Mile, OC&C Strategy Consultants