4 Essentials to Differentiate in Last Mile Delivery
The last 18 months have seen major shifts in consumer behaviour which have had a huge impact on last mile delivery. And these trends are here to stay. One of the most significant outcomes of the pandemic has been an exponential growth in e-commerce.
This was on top of an incremental rise generally in online purchases brought about by modern day digitalization. According to Statista, over 2 billion people purchased goods or services online and e-commerce sales surpassed an eye-watering $4.2 trillion worldwide during 2020.
The delivery volumes are enormous, with over 3 billion packages in the US alone during peak season 2020 (source: ShipMatrix). Consequently, we’ve seen increasing pressure in the last mile in terms of the speed of deliveries and also the scaling of delivery operations to meet customer demand and expectations.
This trend was echoed in the recent global research study we undertook among leading last mile executives focusing on their challenges, technology choices and performance. Among the main challenges they shared included reducing last mile inefficiencies and costs, and overcoming driver shortages.
To help address these challenges and look ahead to the last mile in 2022, Scandit has produced a new executive guide, sharing market insights and outlining four main considerations for last mile businesses today, which I’ve summarized below:
#1 Improving customer experience to satisfy increasing expectations
Customer delivery is the most memorable part of the online experience, but also the hardest to get right.
Changing customer behaviour also drives a lot of cost in the last mile, whether it’s from missed deliveries (potentially rising as people return to the office) or high volumes of returns from e-commerce.
So meeting, and preferably exceeding, customer demands is important in gaining a competitive edge.
To satisfy surging customer expectations, last mile businesses are turning increasingly to easily integrated, proven and cost-efficient technologies, like smartphones deployed with computer vision for driver operations. For example, with a scanning-enabled smartphone in hand, drivers can see real-time updates to delivery instructions (such as an updated time slot) overlaid on the device screen with Augmented Reality (AR) to reduce delivery errors and efforts.
#2 Employee satisfaction and reducing employee churn
Driver shortage and driver turnover rates accelerated in 2020 under COVID-19.
Recruiting and retaining experienced employees and minimizing employee churn is vital, especially when there is strong competition for limited human resources and unpredictable demand peaks.
Digitalizing to differentiate in the last mile is about transforming processes and making tasks simpler and more connected. Workflow automation, including loading the van or contactless ID checks, through technology like smartphone scanning is one way to improve employee satisfaction levels. Ultimately, speeding up repetitive, monotonous tasks with user-friendly and innovative technology can play a key role in reducing churn and attracting talent.
#3 Making the last mile more operationally efficient, profitable, and sustainable
On the face of it, the e-commerce boom is great for retailers, but in reality, profitability is impacted as they bear the brunt of last mile delivery costs. The impact is so great that large retailers are opting for a multi-vendor strategy to make their business less reliant on one vendor, particularly during peak periods.
The challenge for delivery businesses lies in having the agility to scale up at speed, operate with efficiency, while still controlling costs.
Replacing dedicated scanning devices, which often perform only a restricted number of tasks, with a single multi-purpose smart device (for example, for routing, communication and scanning) streamlines operations for an improved delivery experience at a cost which is around 3x times lower than using a dedicated device.
Technology like mobile computer vision is increasingly used to automate repetitive manual processes, improve accuracy, and give drivers the tools they need to achieve fast, reliable ‘first time right’ deliveries.
# 4 Building in agility and capacity to meet demand
Predictable peak season surges in demand are now accompanied by unpredictable surges, and as COVID becomes less of an obstacle, customers will become less forgiving of delays.
When capacity is under strain, it potentially damages the customer experience and increases costs.
According to Accenture, a third of millennials want the option of delivery in just one hour within cities. Capacity and flexibility, as always, remain critical.
To adapt quickly and scale rapidly, last mile businesses are looking for digitalized ways to enable them to meet fluctuating demands at the same pace. And technology is providing many of the answers.
With computer vision of everyday mobile devices, operations can be scaled rapidly with virtually zero hardware costs and employees can perform multiple workflows with a single versatile smart device with optimum process performance.
Read on to learn more
Check out Scandit’s full guide with more detailed insights on these four topics.
If you would like to discuss how we could help you digitalize to differentiate in the last mile, please get in touch.