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Simplifying Last Mile Delivery for E-commerce Entrepreneurs

October 5, 2018

5 min read

The revolution in eCommerce is reinventing the buying habits of customers. The concept of speed delivery is raising customer expectations and creating challenges for the entrepreneurs. Furthermore, last mile delivery, which is the need of the hour is becoming the key to customer satisfaction.

In the process of excelling in last mile delivery for your business, here is what you need to know about.

What is Last mile delivery?

Last mile delivery is the final step of the delivery process. It is the point at which the package finally arrives at the customer’s doorstep. Undoubtedly the last mile is a key factor in customer satisfaction and one of the most time consuming and expensive steps of the shipping process as well. The constants of last mile delivery are speed and efficiency, are the reason that makes it a challenge for companies.

Importance of Last Mile Delivery

Modern eCommerce: Nobody wants to end up carrying heavy shopping bags at the end of a tiring day of work. For this reason, modern eCommerce is experiencing a boost owing to the fact that more and more people are preferring to order online than purchasing in store. Furthermore, more and more companies are facilitating door to door delivery even for in-store purchase. The shift in consumer preferences has evolved the business-oriented parcel delivery market, pushing large eCommerce players to step into last mile delivery.

Omni Channel: The increase in Omnichannel retail is marking last mile delivery as a key differentiator in the field of customer satisfaction. The variety of delivery options and speed of delivery services are the key factors that help customers decide before making a purchase. For this reason, more and more omnichannel retailers are pushing their delivery services and capitalizing on neighbouring markets with their delivery services.

Customers: Last mile delivery is important for customers as it caters to their eCommerce expectations of faster delivery options. According to a recent survey, nearly 25% of the customers are ready to pay for the same day or instant delivery. Out of these, younger customers are more inclined towards choosing these options.

last mile delivery image

Major Issues in Last Mile Delivery

Costs: One of the major issues involved in last mile delivery are costs. With increasing need for fast delivery options, the parcel delivery costs are on the rise like never before. According to a report by the Wall Street Journal, global parcel delivery costs have experienced a 7% rise from the last year.

Especially in rural areas, where the delivery points are quite scattered and situated at inconvenient distances, last mile delivery becomes a huge issue. Considering the total delivery costs, the last mile accounts for a significant 53% of it. And since most of the customers

Customer Demands: For the market predictions by the year 2025, it is estimated that the share of same-day delivery will increase to 25%, exponentially growing further from here in the coming years. With these growing trends, the demand for last mile delivery is rising. Furthermore, these demands are arising from rural as well as urban areas.

On the one hand, where traffic and other reasons affect last mile delivery, reaching out to the rural areas can be a challenging task. Moreover, the customers are constantly changing their shopping habits with products rapidly needed to be delivered at offices, homes etc.

Inventory management: Keeping a track of products in the inventory is a big task in last mile delivery. The parcels need to be packed and dispatched as soon as the order is received. As the number of orders to be delivered increases at a fast pace, so do the returns. Thus, there is a need for inventory management software that can efficiently track the incoming and outgoing inventory.

Tracking: One of the biggest challenges in last mile delivery is dealing with the tracking information for the orders. Once the order is out from the warehouse, it is extremely difficult to answer to the customer’s query of ‘ Where is there order at the moment?’ Apart from that special customer requests related to delivery such as leave at a customer’s doorstep, don’t ring the bell etc. are also difficult to handle.

Also, the customers these days want to know the exact time of the delivery of their products so that they can plan their day accordingly.

Returns: With increasing competition in the market, sellers are more compelled to offer free returns on order. For this reason, more and more customers are becoming fierce in ordering products and returning them for an incorrect size, fit or other issues. The challenge for the seller is to bear these return costs and manage inventory at such a rapid speed.

Technology solutions such as drones etc. are easing the needs of last mile delivery but there is a long way to go especially for small businesses. Last mile delivery is indeed a tough nut to crack but there is no way you can get away with it. Sooner or later with the rising demands, you have to cater to the customer’s speedy delivery needs with efficiency and accuracy. Focussing on customer satisfaction by educating the customer and implementing the right shipping strategies for your business is the key to excelling in the niche.

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