The goal of a company’s logistics channel is to ensure that the product is delivered to the customer on-time and without any unfavourable incidents. The area where companies face the most problems is the last mile. Research shows that over 83% of customers expect retailers to deliver their products on the same day. Unfortunately, only 30% of companies are equipped to make this possible. This is why companies focus so much on improving last mile delivery operations.
Improving last mile delivery
When businesses talk about optimising doorstep delivery, they mean the following:
- Find ways to reduce doorstep delivery services costs (28% of total global transportation costs account for last mile delivery!)
- Reduce delivery times
- Improve customer communication
- Tie logistics to customer service and branding
To do this, companies must engage in a massive re-think of their logistics operations and change the way doorstep delivery is performed.
Here are five ways companies can optimise and improve their last mile delivery:
1. Use customer analytics insights to understand your customers’ needs
Big data is extremely important to the success of a business. This includes logistics. In particular, insights about consumer behaviour, reorder frequency, product usage rate, experience and satisfaction with the brand are some of the insights that help companies make mindful supply chain decisions.
If your company’s doorstep delivery is proving to be inefficient, then a study of customer analytics will help you fine-tune your last mile operations to suit the needs of your customers and improve the retail experience.
2. Use route planning technology to plan the most efficient routes in advance
Route planning technology and service delivery systems are two of the best ways to optimise home delivery. Route planning technology helps companies to:
- Monitor traffic and driver activity at specific times.
- Make last mile delivery very transparent to both the company and the customers.
- Find the shortest routes to the customers’ delivery points.
- Reduce fuel consumption.
- Keep drivers safe from harm and injury.
All of these together will help your company ensure quick, on-time deliveries without any hassles.
3. Choose between 3PL delivery and internal last mile operation
Did you know that 25% of customers abandon their shopping carts at the check-out platform because of high or unexpected shipping costs? That’s a lot of lost sales. One way to reduce shipping costs is to make the right choices about last mile delivery. 3PL suppliers can bring you extensive expertise and specialisation of services. However, they come at a cost. Internal logistics can give you greater autonomy, but they too increase your overhead costs.
The best thing to do is to identify your last mile goal. If you consider quality paramount, then internal logistics is the best way forward. You can implement the checks you want to measure and monitor doorstep delivery quality. However, if cost saving is your goal, then 3PL services give you scalability that will help you reduce last mile costs significantly.
4. Use your warehouses wisely
City logistics and last mile delivery are extremely efficient if companies have a warehouse or a retail store located closest to their largest customer area. This ensures that you don’t waste time travelling long distances to your customer’s home/office.
A hub and spoke distribution model works wonders for last mile delivery, given its reach. If you don’t have warehouses or retail stores of your own, you should partner with a 3PL supplier or seek the services of a cross-dock facility nearest to your largest customer base.
5. Actively communicate with customers both online and offline
The objective of last mile delivery is to ensure that the customer is treated to on-time (maybe before-time) delivery and extraordinary service. Together, these elevate customer experience and make the customer more likely to purchase from you.
One way to optimise your doorstep delivery is to engage in constant customer interaction. GPS trackers and messaging/call facilities ensure that regular updates are provided to the customer about their last mile service. This makes delivery agents more responsible and ensures a quick, problem-free doorstep delivery.
Ultimately, this will improve your company’s brand image, increase sales and increase revenues.