We often hear that online retail sales are booming, and many people believe online shopping is the way of the future. But until we step up our retail game, specifically our last mile delivery procedures, the truth is not as straightforward and optimistic as it may appear.

Currently, 47% of Australian shoppers are moderately satisfied with the current delivery services or not satisfied at all. There is plenty of room for growth and improvement, especially from the point of view of consumers who expect more efficient delivery methods.

Who or what is the bearer of constructive feedback? It’s this 2019 report from CommBank on the last mile delivery that focuses on the Australian retail scene and is still relevant today.

What is last-mile delivery, you may ask? We’ll explain that in a minute. But first, let’s go over some pain points and wishes that many consumers have regarding delivery services, based on — but not limited to — the above-mentioned report. Afterwards, we will explore available solutions that any business can apply, including those provided by our team at Storeplay IQ.

Make sure to read this post until the end if you want the scoop on the most effective last-mile delivery strategies!

alt text: last mile delivery process

Customers desire online shopping with free delivery and flexibility of choosing the pick-up time and location. Source: CommBank Retail Insights (page 7)

Despite living in an era of instant gratification with advanced technology supplying the need for fast results, consumers appear to value flexibility, visibility, and convenience in delivery much more than speed. In other words, shoppers want to have more control over the delivery process, even if it means waiting a bit longer to unbox their purchases.

This isn’t to say that timing and speed are not important at all, but that online stores with fast shipping ought to look for improvements in other areas as well. For example, at the time of the report, only 24% of retailers offered customers the ability to choose their preferred delivery timeslots.

Here are some other key findings useful for any retailer who wants a bird's-eye view of what customers need:

• 23-35% of deliveries are unsuccessful due to customers not being at home when the courier arrives at their doorstep;
• Consumers desire online shopping with free delivery and returns, along with status updates and the ability to change delivery details;
• 59% of them even buy more products if it means they can avoid shipping fees;
• 81% of consumers want better customer service through various channels in order to check the delivery status and offer feedback; only 19% of retailers provide these features;
• It may come as no surprise that younger generations demand better last-mile delivery solutions;
• Same-day delivery and next-day delivery are some of the last-mile solutions that retailers currently offer, surpassing customer demand for fast services;
• Customers expect more reliable services overall.

Improving your last-mile solutions can make a key difference in how customers perceive your shop, which can ultimately lead to increased revenue. Therefore, it’s a logistic step you should probably give more attention to instead of simply hiring a specific third-party delivery service.

What is last-mile delivery?

“The last mile of delivery” is the process of shipping retail goods from a store or transport hub to the customer.

This final step in a product’s journey is the most costly and time-consuming in the delivery process and it has a significant positive impact on customer satisfaction if handled with care. Last impressions tend to last!

It’s also important to note the difference between last-mile solutions and order fulfilment.

Order fulfilment consists of the entire product’s journey, from the factory floor to the hands of the customer. It involves the supplier, the warehouse, third-party logistic companies (3PL), and shipping services.

Last-mile delivery is a component of order fulfilment.

alt text: last mile delivery costs

Source: CommBank Retail Insights (page 20)

One challenge retailers often face in last-mile logistics, besides the last-mile delivery cost, can be the number of parcels they need to prepare and deliver each day.

But there are specific solutions that Australian retailers are not capitalising on as much as they could, at least compared to retailers from many other countries:

• BOPIS strategies and curbside pickup (which would eliminate much of the hassle of the delivery process)
• Using smart lockers for their click-and-collect strategies
• Continuous GPS tracking
• Software and technology that make delivery easier and more effective
• Crowdsourcing delivery services — it essentially means connecting with local, non-professional couriers.

These are the strategies that can provide customers with the control they are looking for when ordering online. They can also bring peace of mind to the clients, knowing that their precious possessions, which they often pay for in advance, are well on their way to their homes (or to other pick-up locations of their choosing).

Additionally, technology can play a significant role in automating various processes, thus minimising logistic costs and improving speed.

To further upgrade the process, retailers can benefit from collaborating with their suppliers to optimise the supply chain management and their delivery services.

Ideally, you should review the entire process behind order fulfilment and be open to adopting technologies that make your clients happy and nurture brand loyalty. Drone deliveries and self-driving cars are already topics of discussion in this field, but there are plenty of other options you can try or improve upon, at least until consumers have greater trust in the so-called disruptive delivery systems.

When it comes to offering your shoppers the ability to choose how, when, and where to pick up their purchases, Storeplay IQ can be of great help to smooth out the last-mile delivery logistics, with services like:

• Click-and-collect;
• Click-and-deliver, offering both same day delivery and next day delivery via our trusty partner, DoorDash;
• BOPIS (buy online, pick up in store);
• Virtual queues;
• Store reporting — providing real-time data so that you can better supervise and optimise the entire order fulfilment.

Even though some of our services are exclusive to Australia (such as click & deliver), the platform can be used anywhere in the world for booking management and setting up virtual queues.

One of the best perks is that neither you nor your clients need to install any applications on your smartphones to benefit from faster and more convenient shipping methods.

In this article, we looked at several aspects of last-mile delivery, from the perspective of consumers and retailers alike.

Considering today’s consumer demands, we can clearly see their need to choose the shipping method and timing most convenient for them. However, we shouldn’t neglect the delivery speed either.

Regarding the retailers (brick-and-mortar or online stores with fast shipping, for example), on the one hand, they can face financial or logistic challenges in fulfilling those needs. On the other hand, research shows they sometimes do not prioritise the same factors as their clients.

We hope this post has provided a helpful perspective on the issue, along with plenty of solutions worth incorporating into your order fulfilment strategy.

We want you to create positive lasting impressions on your clients. That’s why we invite you to get in touch with our team to learn more about how you can leverage your last-mile solutions with the help of Storeplay IQ’s platform.