How can retailers manage last-mile delivery experience and costs?
Around us, the rapid rate of vaccine administration is increasing hope that we may be looking at the beginning of the end of COVID-19. While many sectors have been shaken to the core and are fighting to keep their heads above water, most retailers have seen tremendous growth driven by a boom in online sales. Consumers have shifted their spending away from restaurants, bars and theaters toward home entertainment; pushed by restrictive lockdowns and/or the closure of entire sectors.
While the phrase “tremendous growth” sounds like the ultimate luxury in these difficult times, it has also created significant challenges for the retail sector, particularly in two areas. First, controlling costs while home delivery becomes the new norm. Second, the related challenge of managing customer expectations for the home delivery process.
Controlling costs
The fight for market share in retail is a fierce and never-ending battle. Growth may be strong but margins are thin, and COVID-19 caused a very rapid shift from stores to online sales. The costs associated with home delivery have exploded, driven by supply chain delivery issues, warehousing challenges, delivery vehicle capacity issues, routing challenges, congestion on city streets and much more.
Costs per drop have consequently increased, but the price charged to consumers has stayed the same (or even declined). Needless to say, in many instances last-mile delivery negatively impacts profit margins.
Controlling customer experience
Home delivery options offered today are very basic and are frequently the reason that customers jump to another retailer. We have all been promised real-time updates — only to find that the status has not been updated, we have been provided incorrect info, or that info is simply not available.
The expectations of live track-and-trace are rarely delivered on, causing frustration among customers. Research has shown that customers hold retailers responsible for this gap, even if the delivery is executed by a third party.
Therefore, last-mile delivery also poses a risk to brand loyalty.
The good news is that there is a significant opportunity to tackle these challenges head-on, and even to create a competitive last-mile delivery edge.
In our roles at Atos, we help companies take advantage of the possibilities that technology provides. For example:
• Improved location intelligence increases the number of drops per hour by helping drivers get to customer destinations faster.
The expectations of live track-and-trace are rarely delivered on, causing frustration among customers. Research has shown that customers hold retailers responsible for this gap ...
• True pricing provides clarity for both retailers and customers about the real costs and environmental impact of each delivery option.
• Predictive analytics ensures that inbound logistics are better organized to avoid disruptions.
• Smart lockers provide a flexible delivery option that enables customers to choose exactly when they pick up their goods.
Where to begin?
There is no one-size-fits-all solution. We believe in a bespoke solution to address both your business needs as well as your customers' expectations. As a first step, we recommend taking this readiness assessment of your last-mile capabilities before you talk to a vendor.
By Bas Stroeken, Executive Consultant at Atos Consulting
Posted on April 8
By Sebastiaan Leeuwenkamp, Global head of Supply Chain Sales & Last Mile Delivery - R&S R&TL Dealmaker at Atos
Is your company ready for the last mile?
Only 6% of businesses currently have complete visibility over their supply chains. To compete effectively, you need to adapt and disrupt by using predictive intelligence, analytics and real-time visibility to ensure that your supply chain and last-mile initiatives are delivering on their promises.
To determine the next priorities in your supply chain operations or last-mile delivery, Atos has developed a comprehensive readiness assessment.
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