Last Mile Delivery is one of the fastest growing, and most difficult, areas in logistics. When you consider that last mile deliveries can account for nearly 30 percent of total delivery costs, and that you can win or lose a customer for life depending on a good or bad delivery experience, its importance cannot be overstated.
What does it take to create a great customer experience in last mile delivery? With almost everyone offering free delivery, how can you differentiate yourself in this competitive market? What role are technology and logistics service providers playing in this area?
Last Mile Delivery: Part of a Complex System
With so much focus on the operations side of last mile delivery, I was struck by a comment Alex made recently. He said, “Creating a great customer experience in last mile delivery doesn’t start with picking up the order, it starts with the internal process a brand chooses to manage its last mile solution.” I began our discussion by asking Alex what he meant by that comment.
“Last mile delivery is the final component of a very complex system that if it’s not built well, it’s just not going to work or bring value to customers,” explained Alex. “For example, if I’m picking up an order at a retail store for final delivery, how are their associates trained to prepare that order for pickup? How are the retailer’s customers made aware that this delivery option is available to them and how are they incenting their customers to use this option in the future? We take a holistic approach with our clients to consider the whole process to build a complete, tailored solution that best meets their needs and the desires of their customers.”
Alex also points out that for companies with multiple brands, the profile and expectations of each brand’s customers can be quite different and may require different delivery approaches. He says, “You have to think strategically about how each customer group views delivery and how it will impact your brand.”
Free Delivery: The Other 30 Percent
With near universal free delivery today, and recognizing that it is not really free, I asked Alex how companies can stand out from their competitors. He states that, “Most companies come at the issue from the wrong angle. They see their competitors offering free delivery and feel they have to as well. That works for perhaps 70 percent of customers who will always take the cheapest option. But the other 30 percent have specific service demands, such as wanting a gift to arrive by a specific date, and are willing to pay for that level of service. It is more important, and a competitive advantage therefore, to offer customers what they want than to simply adhere to a free delivery mantra. This will lead to a better overall shopping experience.”
The Post-Purchase Experience
When I asked Alex about the fast growing same-day delivery trend, he put it in the context of the overall customer brand experience. He says in the past customers judged their brand experience based on price and how easy it was to use the seller’s website. Now, the post-purchase experience is just as important. Alex says, “There are many carriers who can pick up and deliver an order on time, but was the driver dressed appropriately and was he or she courteous? Could they answer questions about the product? Was there any damage to product? If there are any problems, the customer doesn’t blame the third-party carrier, they blame the company they bought the product from. Before offering same-day delivery, therefore, companies have to ask themselves how it will impact their desired brand experience.”
How Technology Can Help
I asked Alex how technology can help with last mile and same-day deliveries. He noted that companies have to take a holistic approach from how an order is received to the technology a driver uses to how a customer is notified of an impending delivery. I encourage you to watch the full episode for additional insights about the role of technology as well as other topics related to last mile delivery. Then post a question or comment and keep the conversation going!