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What’s next for last-mile delivery?

20th Jul 2021
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In the past year, there has been a notable increase in online retail. An Ofcom report showed that customers across the UK spent over £110 billion in 2020, a 48% increase from 2019. While this is a relatively new trend, it is showing no signs of slowing down. Our recent survey found that 85% of online shoppers will maintain or increase their online shopping over the next year.

Shopping online allows retailers to reach customers beyond their local area, which increases the reach of their products. However, with increased demand comes an increase in potential issues in other areas, such as deliveries. Retailers must make sure that customer satisfaction remains a priority and core focus of the entire delivery experience to avoid negative repercussions affecting brand reputation and potential sales.

A typical problem customers experience with delivery is the gap in communication between themselves and couriers, resulting in missed or lost packages. After a failed delivery, couriers will re-attempt the same delivery on another date; however, the potential for the same issue to reoccur remains. This wastes time for both courier and customer and is incredibly frustrating for consumers. However, we can fix this.

Technology will improve the delivery experience cheaply and efficiently. In short, last-mile delivery will vastly improve.

Outsourcing part of the supply chain

We already have same-delivery options, but this is not yet as frequent as it could be. Customers are increasingly seeking instant gratification and the opportunity to buy goods and get them delivered on the day they purchase. Amazon is renowned for being at the forefront of delivery development. They offer same-day delivery on certain products, as do couriers, including FedEx and DPS, in some markets. As e-commerce grows and customers get used to buying everything online, the demand for same-day delivery is only going to increase.

For couriers, however, same-day delivery is costly. In the future, we expect to see them outsource this part of the supply chain. Gorilla and DoorDash have already moved into this space for groceries. We’ll soon see more businesses enter this space for all other sectors of online shopping. These businesses will be able to undercut traditional couriers by transporting goods straight from the retailer to the customer, missing out the stop at the depot entirely. This will save valuable time and money, benefitting retailers and customers alike. As more businesses compete, same-day delivery services will afford retailers a wider choice of last-mile delivery partners.

Dividing  local and national deliveries

People can expect delivery strategies and product pricing to change as the industry grows. Customers are currently paying the same delivery price whether the retailer is four or four hundred miles away. This is a missed opportunity to gain favour from local customers by reducing prices. In the future, we can expect to see couriers splitting local and national deliveries. Same-day or “local” deliveries, when the courier can go straight from retailer to customer, will become cheaper than national deliveries requiring a drop-off at the depot.

We can expect to see another change in same-day deliveries based on where the drivers live. Assigning them based on location will make the process far more convenient for couriers.  Data on driver routes is currently available but not used to set which drivers deliver which packages. By giving these deliveries to drivers already travelling in a specific direction, the efficiency of each worker will increase, potentially resulting in more deliveries in a shorter time frame.

Using data to recruit

Data-driven recruitment can also expect to increase in the next five years. Data captured as drivers do their work is one of the main benefits of using delivery logistics technology. However, it’s not commonplace for retailers to compare this data to customer feedback, missing valuable insights. Recipient feedback built into tools significantly increases the volume of feedback retailers can collect.

Retailers need to view delivery drivers as an extension of their brand.  As e-commerce and delivery grow, the delivery driver is often the only human link a customer will have with an online retailer. How a recipient sees customer service from the driver has a considerable impact on the retailer’s reputation. 1 in 4 customers (24%) told us that they would be actively discouraged from giving a recommendation after a poor delivery experience.

Looking ahead, we can expect to see customer feedback on the delivery service will be analyzed alongside the driver’s routes and salary to give an accurate account. Couriers will choose the most efficient delivery drivers. They will no longer be competing purely on price but an all-important balance of price, speed and customer satisfaction.

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