In business, value is defined as the add-on benefit companies provide customers to improve their customer experience with the brand. Unfortunately, value creation is one of the most challenging tasks that a company must do. This is especially true when it comes to value-added logistics.
What does the ideal last mile look like?
Studies show that over 63% of customers consider delivery speed to be of paramount importance when selecting shipping options. 58% of customers want priority access to same day delivery products. 77% of customers agree that they don’t mind paying extra for quicker delivery. This is true for both offline and e-commerce orders.
So, it’s safe to say that the ideal last mile involves same-day delivery. Companies which can fulfil this requirement add greater value to the customer journey and ensure customer satisfaction.
Unfortunately, more than 70% of companies are unable to offer same-day delivery. To make up for this, companies resort to adding other value-added services to their last mile delivery operations. While some do appease customers, others aggravate them further.
Values that work in the last mile
Logistics localisation and flexible delivery
Urban logistics is a challenging and time-consuming operation. But one way to reduce delivery times and add value to customers is to localise the delivery. Companies are now investing in regional and localised storage hubs and transport services. Smaller retail stores and warehouses located closer to customers allow companies to reduce the ‘time to doorstep.’
Additionally, companies are tying up with local truck, cab, bike and bicycle delivery services (who have better local route knowledge) to quickly reach the customers.
Kitting and bundling
Building kits in advance ensure that last mile delivery agents don’t waste time accessing various components of their deliveries from the inventory at the last minute. This prevents shipping and assembly mistakes and ensures the product is packaged correctly and safely. Similarly, bundling ensures that various combinations of products are available for pick-up whenever needed, enabling successful on-time doorstep delivery.
Ultimately, kitting and bundling allow companies to deliver the right goods, with all the components/peripherals, in perfect condition, on-time to the customer.
Product audits and regulatory compliance
Audits ensure that the products-to-be-delivered have been manufactured, packaged and stored according to the quality policy. This ensures that the customer is delivered top-quality products each time.
Additionally, product audits and regulatory compliance prevent frequent returns from customers. They also show customers how much you care about their safety and satisfaction.
Customisations, packaging and labelling
Various customer groups expect specific customisations of products. A great value-added logistics service is increased customisations at the retail level. By creating bespoke market-specific customisations, companies can make sure that the delivery agent has access to the right customisation, at the right place, at the right time.
Unique packaging and labelling will allow for easier recognition of the products, make transportation easier during the last mile and make usage more convenient for the customers.
By taking obsolete and old products off-the-hands of customers and disposing-off them responsibly, companies reduce the customers’ responsibility concerning product disposal. This increases the chances of customers purchasing new products from the company in the future.
Values that don’t work in the last mile
Discounts and freebies
Constant delays in home delivery can enrage even the most serene customers. No discounts or freebies can calm the customer down if the company progressively fails to deliver the products on time and in the right condition.
This is a problem most commonly faced by food delivery apps. It’s important to remember that discounts and freebies as value adds will only work 1-2 times; but not beyond that.
Finally, automatic re-ordering is a boon only when the customer is an active user of the product or uses the same variant/combination of the products during each reorder cycle. However, automatic re-ordering can quickly become a bane if the customer decides to switch brands or experiment with a different variant/combination of the products. In that case, the effort of manually overriding the automatic re-ordering feature can be perceived as a negative experience by them.
Free delivery is an excellent value add if the company can implement an efficient and effective last mile delivery. However, just like discounts, free delivery can disappoint customers further if companies fail to meet their last mile promises.
In these cases, companies need to ask themselves what customers consider as value and incorporate that into their last mile. They should initiate value co-creation across the organisation.