With customer demand for same day or next day deliveries growing, maximizing the efficiency of last mile delivery operations has to remain a high priority for retailers.
According to an OC &C Consumer Survey1, the shift online is increasing the cost to fulfill dramatically with a $45 item now costing $15 for a two-man delivery to fulfill. That can’t be a viable business model for any retailer.
The last mile is typically the least efficient link in the supply chain, encompassing up to 28 percent2 of the total cost of delivery. There are a number of reasons for that. Many of these deliveries are made to consumers’ homes, which are often spread far and wide in the US, adding mileage to the total cost and extending the time frame. Plus deliveries made in urban areas suffer from growing congestion, which can slow delivery times.
These factors are significantly compounded if the customer isn’t home to accept it, or the business you are delivering to doesn’t have the right equipment to unload the order. According to online-retail association IMRG the cost of failed deliveries of goods ordered online was estimated at $1.13 billion for 2014 in the US alone.
So how can you improve first time delivery success?
Allow customers to choose their own delivery windows. Our retail customers tell us that letting consumers select their own delivery windows increases the success of first time delivery. Displaying a range of time windows on your website at the point of purchase allows the customer to check somebody is going to be home before going ahead with placing their order.
Allow your customers to change their time window. Using an omni-channel fulfillment system that offers time windows at the point of purchase, and allows customers to change their delivery up until the day of delivery, puts the customer in control and increases the chance of first time delivery success.
Continuous communication. Provide updates via SMS or email throughout the order lifecycle so that the customer is kept up to date with the progress of their order, and has the opportunity to amend their time window at every step. This will reduce the volume of inbound calls to your customer services team and increase the confidence the customer has in your delivery service.
Use automated customer notifications on the day of delivery. Messages triggered by the driver leaving the depot, or the successful completion of the previous job can all help increase the chances of the customer being there when your driver arrives. For example, self-service text capability means customers can receive updates on the day of delivery from drivers, saying, “We are 30 minutes away. Are we still okay with this delivery time?” If the customer is stuck in traffic, they can choose a later time slot, ensuring they will be home for the delivery.
Paragon Software Systems offers Paragon HDX to improve the success of last mile delivery operations. It gives customers choice and control. 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 within seconds. The route optimization system ensures all promised time windows remain feasible, switching deliveries to different vehicles or changing the drop sequence to guarantee the routes remain optimized and the vehicle arrives at its destination at the right time.
Paragon HDX provides effective last mile delivery. If you’d like to talk to one of our team, why not get in touch? After all getting more deliveries delivered the first time is the key to keeping costs down within your transport operation – and customers a lot happier.
1 Reinventing the Last Mile, OC&C Strategy Consultants,
2 http://www.supplychaindigital.com/logistics/3355/The-last-mile-problem-by-Parcel2Go
