With the continued rise of e-commerce, speed of fulfillment and distribution becomes essential to meet demand and ensure customer satisfaction. Delivery standards are changing rapidly as logistics giants such as Amazon, UPS and FedEx include same-day and same-day delivery options as part of the shopping experience.
According Morgan Stanleythe e-commerce market could grow from $3.3 trillion today to $5.4 trillion in 2026. In the United States, e-commerce could grow from 23% of sales today to 31% in the same period of time, and Noted statistic there are 90 million more digital buyers today than there were in 2020, most of whom expect on-time delivery.
Last-mile delivery continues to be one of the biggest challenges for businesses, even as they implement advanced supply chain technologies and tools to meet customer needs for rapid arrival and efficient.
Despite best efforts, online shopping does not always end where and when it should. One in 20 orders never arrives due to lack of visibility on the ground. This is a problem, especially since 39% of respondents to Oracle 2021 Retail Consumer Research Survey say unexpected delays are a bad shopping experience, and 43% say fast delivery often determines whether they will place an order.
Walk the last mile well
Since last mile fulfillment deals directly with customers, it is critical in shaping their view of the entire shopping experience. For many, this dictates whether they will buy from a brand again.
The last mile is the most expensive and time-consuming part of the execution process. Delivery volume fluctuates and ideal routes change, and wait time and failed deliveries elsewhere contribute to delays.
Additionally, logistics managers do not always have the monitoring infrastructure to detect delays and diversions that lead to an inaccurate ETA. As a result, the buyer often receives inaccurate information and perceives the process as inefficient and inefficient.
According to a 2020 market study by Shopify69.7% of customers who are not informed of their delayed deliveries are less likely to repurchase from this retailer, while 68% admit that their shopping habits are influenced by the estimated delivery time.
The recent boom in same-day service has compounded these difficulties. Delivery times can be further affected by the availability of dispatchers, drivers, and vehicles, as well as distance from a fulfillment center.
Improve the customer experience
After purchase, one of the biggest concerns consumers have is their ability to track and receive an order – and for good reason. An effective last mile system will manage, track and schedule deliveries, and as requirements evolve, the technology needed to ensure orders meet their targets must also evolve. Artificial intelligence and machine learning are designed for this, anticipating needs and constantly adapting to changing environments. They process massive amounts of data in real time to continuously optimize vehicle routes and capacities, and handle fluctuating demand. These tools can be integrated into order management and control tower systems to eliminate the constraints faced by suppliers and consumers in the last segment of the supply chain.
Vehicle routing issues are often the biggest obstacle to on-time delivery, and route optimization is a process that uses AI to determine the fastest and most efficient path for drivers. It considers fleet constraints – for example, electronics and perishables cannot be shipped together – and evaluates multiple routes over current and past road conditions to identify the best one.
Real-time routing software is another option businesses can adopt to ensure timely delivery of goods, especially those that require same-day delivery. These orders may have a significant disruption to scheduled delivery plans, thereby affecting ETAs and increasing costs. Real-time, dynamic, AI-assisted vehicle routing systems can improve delivery efficiency and minimize cost per mile and time on the road, reducing fuel costs, wear and tear fleet and greenhouse gas emissions.
Once routes and means of delivery are established, integrated order management systems can provide buyers with data that tells them precisely when their goods will arrive. These systems can provide direct updates via text messages or push alerts in addition to established tracking numbers, providing consumers with real-time updates and ETAs, as well as alerting them to any delays.
As expectations evolve, the focus will remain on improving decision-making capabilities to enable rapid last-mile execution and delivery. Companies that cannot meet consumer expectations or that rely on outdated processes risk increased expenses and loss of brand loyalty. Digital tools, many powered by AI and ML, are reinventing ways to solve long-standing last-mile problems, especially as the rise of e-commerce transactions puts new pressures on processes. Delivery.
Nishith Rastogi is Founder and CEO of Locus.