Not all elements of a delivery journey cost the same. It represents between 50 and 60 percent of the shipping cost. So, it’s ripe for innovation.
Curious about what to look out for in this important stage of a package’s life in 2020? We’ve predicted the future for you. Take a look at 8 trends in last mile delivery!
Why Trends in Last Mile Delivery Matter?
The growth of e-commerce has seen an associated growth in home delivery. The last mile of the e-commerce package was a challenge for distribution business models that had previously depended on consumers visiting stores.
The retail industry had driven costs out of its supply chain by getting consumers to visit large format retail sites. As retail competition increased and economies of scale were achieved consumers benefited from lower prices.
Home delivery adds cost to the supply chain and yet consumers aren’t necessarily happy to pay more. Some retail businesses were initially skeptical about the business case for e-commerce but they have lost the argument and been left behind. Those businesses that were willing and able to engage with the opportunities are reaping the rewards.
It continues to be important to stay ahead of the curve. These trends in last mile delivery may hold the key to survival for your business.
1. The Gig Economy
The last mile delivery business has begun to see the emergence of technology-based solutions. These solutions depend on the gig economy to fulfill the delivery.
The model is similar to the way Uber has disrupted the taxi business. Uber is not a taxi service. It’s a technology business that enables travelers and car owner/drivers to meet, for their mutual benefit.
Delivery services can operate in a similar way. Independent owners of delivery vehicles can be connected with businesses that need a package delivering. The technology businesses that enable this don’t have the huge capital investment stresses of conventional delivery services and so can enter the market relatively easily.
We have yet to see whether this business model can provide the efficiency and reliability needed to meet consumer expectations but it seems to work for pizza delivery.
2. Speed is of the Essence
Increasing expectations from consumers for next-day or even same-day delivery is driving a trend towards speedy fulfillment.
The buying process seems to be one of the reasons for this. It is so easy and quick to make an online purchase, waiting for the delivery seems so frustrating.
If we are to move away from buying products from easy to access stores where stocks of product are available for us to choose from, the alternative has to be as quick. Why wait for a fulfillment center and package delivery service when you can drop by your friendly local store? The answer is rapid fulfillment.
3. Upselling Opportunities
One of the great benefits of consumer data is the opportunity it affords e-commerce businesses to upsell. If your analytics tells you that customers who bought a specific product are also likely to buy another specific product who not offer it to them during the buying transaction. Many e-commerce businesses already do this.
The trend in last mile delivery is for the delivery driver to become part of the selling process. The delivery driver can carry additional stocks of associated products and sell them directly to the consumer.
How often have you looked forward to receiving a delivery of a small electrical item only to find that batteries are not included? Right there is a selling opportunity for the delivery driver.
These opportunities are driven by the same analytics that recommends products at the online checkout stage. They can be a feature of last mile delivery of food, apparel, and pharmaceuticals amongst other product areas.
4. Parcel Tracking
We are now used to tracking of parcels throughout the supply chain. Once the parcel has left the fulfillment center the delivery vehicle can be tracked too. This can provide consumers with an accurate forecast of delivery time.
The benefits are not only for the consumer. Accurate delivery forecasts make the delivery more efficient. The customer is more likely to be available to receive the delivery first time and so reduce handling costs.
A refinement of parcel tracking will be the introduction of smart technology in the package itself. Sensors or transmitters inside the package can provide information about its location, temperature or humidity. This can help with security, managing product conditions, and logistics efficiency.
Traceability is important for many products especially if a variety of partners are involved in the supply chain. Proof of delivery doesn’t have to rely on a signature or on a driver confirming delivery on an app. It can be confirmed by the package itself.
5. Autonomous Vehicles
Autonomous vehicles look to be on the verge of transforming the way we all travel. The implications for last mile delivery are just as transformative.
Self-drive vehicles can cut the labor costs for last mile delivery significantly. If the technology meets expectations, it can also reduce errors, increase flexibility, and reduce human injury from accidents. Look out for more experimentation.
6. Added Value Services
Last mile deliveries provide sellers to offer added services to their product offer. The sale of a washing machine often coincides with the buyer having an old washing machine that needs disposing of and perhaps recycling. This can be part of the last mile delivery service.
Added services include fitting the washing machine to the plumbing supply. Also setting up equipment is an added service that technology businesses can offer their customers as part of the last mile delivery service.
7. More Fulfillment Centers
The trend towards quicker deliveries is forcing another development in last mile delivery. More fulfillment centers are being set up and will continue to be added to. As the demand for home deliveries increases the economies will drive more fulfillment centers so that that last mile can get shorter.
8. Better Analytics
As more home deliveries occur so they will generate more data about home delivery. More data feeds the analytics. This will drive more opportunities for better planning, improving cost control and customer service.
Home delivery is an opportunity for innovation. It’s changing quickly. Watch the trends in last mile delivery and learn.
Learn more about e-commerce shipping here.