These days, a smooth last mile experience is non-negotiable. Three-quarters of consumers will spend more if they’re satisfied with delivery services. But this presents a challenge for retailers, thanks to the increasing demand for fast deliveries and the costs that accompany them. We’ll show you the strategies used by savvy retailers to gain a competitive edge, retain customers, and solve the last mile delivery problem.
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With the rise of the gig economy, retailers are turning to crowdsourced delivery. This model increases retailers’ fleets and enables them to offer speedier and more flexible delivery options. Walmart, for instance, uses its Spark Delivery service to make deliveries. The brand also partners with Skipcart to enable same-day delivery. Here are some additional tips:
Partner With Delivery Platforms: Partner with an on-demand delivery service and select a platform that allows you to access consumer data. When using this option, note that you’ll have to process orders quickly to avoid inflexible options for consumers and making drivers wait for deliveries.
Create Your Own Delivery Platform: For more control over the service, consider building your own platform, using flexible delivery technology that can optimize driver schedules, allow drivers to communicate their availability, and deliver a smooth onboarding process. Before you start, just make sure the local community can offer a reliable hiring pool for your delivery team.
Use Ride-Sharing Companies: Increase your fleet by partnering with ride-sharing companies to make deliveries. Take precautions to prevent drivers from tampering with items and constantly evaluate your partnership with regards to customer satisfaction.
While crowdsourced delivery has its advantages, don’t use it to replace your fleet. Take advantage of these companies during peak periods or to make quick deliveries. If considering multiple delivery platforms to carry out deliveries, keep in mind the added challenges of controlling the delivery experience.
According to a recent report by Which 50, 80% of last-mile deliveries could be autonomous by 2025, and one giant retailer is already ahead of the curve. Kroger Co. operates its autonomous delivery service in Houston, where self-driving vehicles carry online grocery orders to customers’ homes.
If you’re considering using autonomous vehicles to make deliveries, keep these tips in mind:
Partner with startups: If you don’t have the resources to build your own self-driving vehicles, consider partnering with technology startups. Startups are agile and have access to cutting-edge technologies that enable fast release delivery. Partner with a startup that fits your area of interest, and ensure they have a clear understanding of the nature of the collaboration.
Conduct Trials: To see how consumers will respond to autonomous delivery, conduct trials in closed-off locations like college campuses. These trials will also allow you to collect data on technical and infrastructural challenges, and help determine whether autonomous delivery is a viable option for your brand. PepsiCo’s snackbot, Hello Goodness, is currently hitting college campuses.
Autonomous delivery has many hurdles to overcome. Many consumers aren’t yet comfortable with autonomous delivery, so make sure to address consumers’ concerns about safety, theft, and privacy, and commit to balancing technology with human-to-human interaction.
Failed delivery attempts and package theft have led some retailers to add in-home delivery to their shipping options. This delivery model allows consumers to receive packages in their homes while they’re out, and nearly 50% of customers surveyed are willing to use this type of innovative service. Amazon Key, for instance, enables drivers to enter a customer’s home through a keyless entry solution. Below are three elements to consider before offering consumers in-home delivery:
Use Smart Technology: Smart lock technology allows consumers to remotely unlock their doors or set up a temporary access code. The code should be sent to drivers at the scheduled delivery time via a secure platform and deleted once the delivery is complete.
Monitor Deliveries: Address security concerns by notifying consumers when a delivery occurs. Equip drivers with body cameras or use security cameras so that consumers can watch the delivery in real-time.
Hire Trustworthy Employees: As in-home delivery theft is a concern for many customers, carry out comprehensive background checks on your drivers. Connect every delivery to a specific trackable driver, and verify the address ahead of time.
Before scaling this delivery method, run a pilot program to determine whether consumers are interested in this service. In-home delivery is prone to exploitation, so ensure you have strong security measures in place.
With warehouse and sorting representing a third of supply chain costs, smart retailers count on micro-fulfillment centers to improve last mile delivery. Micro-fulfillment centers allow retailers to turn empty facilities into company storage space. A few things to note when setting up a micro-fulfillment center:
Location: Place your micro-fulfillment centers within urban areas and major cities to help you reach more consumers and reduce the cost of last-mile delivery. Make use of existing stores or turn underutilized real estate into micro-distribution centers.
Robots: Leverage AI-powered robotics and automation to select and retrieve items to make assembling orders faster, more efficient, and less expensive. Developing in-house robots for fulfillment will take time and resources, so consider pairing up with a micro-fulfillment firm. Albertsons is partnering with Takeoff Technologies to pilot a micro-fulfillment center at one of its grocery stores using robot-powered technology.
Technology: To ensure your micro-fulfillment strategy streamlines the best of eCommerce fulfillment, choose a solution that works with your existing supply chain and store footprint, and complete orders in real time.
While micro-fulfillment can help increase customer satisfaction and ensure faster deliveries, you’ll need to overcome management risk concerns and show a compelling return on investment before investing in this strategy.
Win the Last Mile Race
Although perfecting last mile delivery is challenging, sitting on your hands is the riskier strategy. To win the last mile delivery race, get innovative, explore different delivery options, and focus on customer needs. Give consumers visibility into last-mile logistics, and offer self-delivery options. As your return process affects the delivery experience, create a hassle-free system by removing surcharges and leveraging your store as a product returns hub.