Amazon has turned the market on its head, shaping consumer expectation beyond what is profitable for many retailers. Are you feeling under pressure to compete with Amazon’s delivery proposition? Paragon argues that choice and predictability are often more important than immediacy – especially when it can be done cost effectively.
Research suggests that retailers under pressure from impatient millennials will be forced to offer same-day delivery as standard. However, the reality for most of us is a lot less demanding. We want a choice of delivery options at the point of purchase and the order to arrive at an agreed time and location that fits our increasingly hectic lifestyles. I might want my groceries tomorrow at 7pm but a two-man delivery of a larger item may be more convenient for me next Thursday when I’m working from home than tomorrow afternoon when I need to be in the office.
In most circumstances, a range of delivery methods and time windows combined with regular communication and the ability to deliver on what has been promised results in a positive home delivery experience. All importantly it is also likely to result in the consumer returning to buy something else in the future.
This may sound simple but the challenge of offering consumers spread across a city, or multiple states, a sufficiently wide range of options, and still maintaining a delivery drop density that’s economical is far from straightforward.
The balancing act starts with order capture
Scheduling tools integrated with a website’s back-end can allow retailers to offer customers a range of cost-efficient time windows. While marketing may feel under pressure to make the delivery proposition as attractive as possible to compete, it’s obviously essential that the delivery options presented to the customer are achievable with the resources available.
Some retailers seek to influence the consumer’s choice towards a more cost efficient time window by highlighting a few of the options as more eco-friendly. Still others offer a lower price for certain time windows that will result in more drops per trip. Configured correctly with inputs from across the organisation, an order fulfilment system can display a choice of attractive options that also maximise vehicle and driver assets.
While there are many parameters to calculate, algorithmic development has moved at such a pace that an advanced last mile fulfilment system allows retailers to balance these two seemingly conflicting priorities. As each order is placed, the optimisation engine considers available times, while respecting existing delivery routes, relevant vehicle size, skills required for any installation and cost.
Minimise the cost of great customer communication
We know from talking to our retail customers that when a consumer chooses their own delivery window online – as opposed to via a customer services agent by phone – the chances of first-time delivery success are higher.
But what happens if the consumer needs to amend the delivery slot? By allowing the individual to go online and amend the booking themselves, or simply respond to an SMS message checking that the booked time is still convenient, the volume and cost of inbound calls can be reduced while maintaining an excellent customer experience. Each retailer is different, but integrating customer communication and customer self-serve tools into your order fulfilment process will enable you to do this based on business rules that suit you, and your customers.
Maximise the chances of first time delivery success on the day
Multiple attempts for one delivery can wipe out the profit on the item being delivered completely. The cost of failed deliveries of goods ordered online was estimated at £771 million (US$1.13 billion) for 2014 in the UK alone, according to online-retail association IMRG.
When it comes to the day of delivery, proactive communication triggered by events such as the driver leaving the depot, or finishing the previous drop help to increase first time delivery success. This not only delivers a good customer experience, but also ensures that somebody is at home to receive the package, helping you to avoid the cost of multiple delivery attempts.
Develop better visibility of your order fulfilment process
One advantage that bricks and mortar retailers have over Amazon is being able to offer customers a store experience. Consumers often like to check out the goods in store, compare prices on their cell phone, and then go home and order online. To maximise this advantage, retailers must display the same prices across all channels but also show consistent product availability and delivery offerings.
In order to achieve this, the ability to update all customer-facing channels simultaneously is vital. If demand increases, or situations change further upstream in your supply chain then you need to be able to create rules on the fly that display immediately on your website or the systems that your customer services team use. This is especially true during peak periods like Black Friday.
Fully integrating all elements of your fulfilment process with your order management and warehouse management systems can achieve the level of visibility you need to provide customers with a consistent multi-channel experience.
Start simple
Getting more deliveries on fewer vehicles that drive fewer miles is a formula that will yield only positive results – in particular, first time delivery success and lower total cost to service the customer.
Order fulfilment systems that offer more than just optimised routing and scheduling lie at the core of effective last mile delivery. But introducing a new system or systems into your supply chain can be daunting. By taking a look across your fulfilment process from the initial order capture through to delivery management and the returns process, you will be able to identify where the gaps are in your process, and where systems aren’t integrated. Using this information, you can then get a holistic view as to whether your operation could be more efficient, providing you with the opportunity to start cutting the cost of fulfilment.
Paragon Software Systems has developed a modular order fulfilment system to improve the efficiency of last mile delivery operations. With every new order, Paragon HDX analyses all the existing deliveries scheduled, resource availability and route planning parameters, then calculates the best delivery time to offer your customer at point of purchase within seconds. The route optimisation system ensures all promised time windows remain feasible, switching deliveries to different vehicles or changing the drop sequence to guarantee the routes remain optimised and the vehicle arrives at its destination at the right time.
Paragon HDX consists of a number of complementary modules to streamline your last mile delivery operation. Why not get in touch to find out how we can help you streamline the cost of excellent customer service.
