Long-distance carriers deliver products from an intermediary shipping center to their final destination. But as simple as it sounds, a lot can go wrong in this phase, which not only leads to increased costs but also undermines trust and negatively impacts your brand.
The final mile and last mile refer to the final delivery stage. Using the last mile in eCommerce can make the difference between a positive customer experience and a return. Not delivering packages on time increases return rates dramatically, and poor last mile in eCommerce delivery harms the brand reputation. The best eCommerce delivery schedules will fail if shippers fail to account for this critical part of the journey, adding more cargo to consumers, increasing profitability.
In 2020, the global supply chain solution management market was valued at 15.85 billion USD and is expected to reach almost 31 billion USD by 2026, according to the Statista report.
Here are some of the main problems that eCommerce businesses due to flawed supply chain:
Return of orders subsequently increase in logistics costs:
Order cancellations are common in eCommerce, but one of the main reasons customers return orders is an error in the last mile delivery process. Be it late deliveries, inability to track packages accurately, delivery of damaged items, and improper placement of packages – all of these can contribute to more returns. These incidents usually occur due to negligence of eCommerce companies or lack of modern technology. As more and more customers return orders, logistics costs increase, affecting market share and customer loyalty.
Return order to origin:
Salespeople face a significant problem when it comes to “return to origin”. This means that if the delivery is not successful, the order will be returned to the seller. This can happen due to an incorrect address, no one available to deliver, customer refusing to accept an order, etc. This adds additional costs for re-shipping.
Unable to meet growing demands:
With the advent of faster connectivity of the internet, the demand for eCommerce is proliferating. This is another segment where last-mile deliveries run into obstacles. The 3PL Partner Implementation Center can be far from the delivery location. The relationship between them can affect the speed of delivery. Companies like Flipkart and Amazon are trying to solve this problem by working with local retailers and setting up collection points where customers can pick up orders. The further away the location is, the more difficult it is to make it to the last-mile deliveries successful.
Customer experience is crucial:
Competition in the e-commerce market is fierce and evolving all the time. To maintain customer loyalty, last-mile logistics brands and suppliers must offer an exceptional shipping experience. Amazon, for example, consistently exceeds customer expectations and creates the benchmark for others. In addition to one-day delivery, it also offers 2-hours delivery on specific items that are only available to Prime subscribers. Same-day delivery has become almost mandatory to ensure that customer loyalty does not change. But last-mile delivery became so expensive for the eCommerce giant that it decided to build its supply chain, which would be cheaper than outsourcing the service.
Due to the bar set by Amazon, customers tend to expect similar services when ordering from other eCommerce companies. Regardless of bad weather conditions, local blockade or restricted areas, etc., against delivery times, customers want super-fast shipping – they do not care about the challenges of long-distance shipping. They also expect flexible timelines as well as lower costs in the end.
White gloves and contactless delivery:
When it comes to long-distance shipping, eCommerce businesses need to focus on security and convenience. Some retailers offer high-quality services, such as shipping white gloves for their goods. This type of service is usually available for high-end items or large items – this may include delivery, installation, or assembly in a specific room of a home. As the coronavirus pandemic is still ongoing, customers also want a contactless delivery option to deliver packages to their doorstep. This option can increase brand loyalty and attract more customers.
How to improve a tech-driven supply chain?
The eCommerce industry is experiencing so much uncertainty regarding supply and shift in demand as well as trends due to the COVID-19 pandemic. During the upcoming decade, the global supply chain management market is expected to more than double in size, while the supply chain solution management software market is expected to follow a similar tendency over the next couple of years, according to the report published by Statista. Using decentralized inventory across multiple warehouses and search centers across the country can add to a dynamic market. Using data-driven and analytical decisions, smarter and more informed decisions can be made – this information helps you investigate and understand trends more effectively. They can help businesses with smart inventory placement, cost optimization, and more. It is also vital to implement supply chain management solutions – this is beneficial for the end-users and businesses, as orders are not misplaced or rerouted during delivery times. It significantly helps in maintaining the delivery time frames without hurdles. According to Inbound logistics, “By 2024, over 60% of G2000 manufacturing organizations will rely on digital solutions to drive digital transformation across the supply chain solution, leading to productivity gains of over 20%”.
eCommerce retailers and companies need to opt for innovative practices for last-mile delivery and develop solutions to provide adequate shipping and service options. It is imperative to increase the efficiency of every step of the delivery flow. Last-mile technology makes the shipping process more straightforward, enabling e-commerce companies to process more orders in less time and successfully execute more last-mile deliveries.
If you are looking forward to developing a tech-centric ecosystem for higher efficiencies in the supply chain solution, collaborate with our experts at Katalyst Software Services Limited today. We catalyze digital transformation and develop advanced supply chain solution that help enterprises stay ahead in the competition curve.
Get in touch with our team today!
