The last mile market is changing fast.
Surging e-commerce is reframing consumer demands and expectations. Parcel volume growth – while still unpredictable – might be finally stabilizing but delivery delays during peak season actually increased. Labor shortages continue and supply chains are inefficient, but at the same time expensive to maintain.
This landscape has created a paradox for post, parcel and courier businesses.
The Paradox: Expectation versus valuation of last mile delivery
- Customer expectations for home delivery are increasing – people want faster, cheaper, on time, more flexible.
- However, the valuation of last mile delivery is decreasing – expectations are that prices should remain low or that home delivery should be cheaper or even free.
- Yet the last mile is often the most expensive and time consuming part of the whole delivery process.
Taxing peak season demand spikes and pressure only magnify the paradox. In 2020, the cost exploded for delivery businesses. In 2021, maintaining customer satisfaction levels was a challenge as they had to pay more for often slower delivery times.
And with almost half (48%) of consumers saying they won’t purchase from retailers with a poor delivery performance (source: Capgemini Research Institute) – this could potentially mean your retail customers will turn to your rivals if you aren’t delivering to recipients’ sky high expectations.
So, to tackle this paradox and deliver more for less, things need to change fundamentally in last mile delivery.
In this guide, we’ll explore how and why many delivery businesses are deploying smart data capture technology on mobile devices to digitally transform operations and outcomes, including:
- Handling unpredictable volumes with smart scaling
- Reducing costs, doing more with less and creating superpowered drivers
- Satisfying consumers with more flexible operations and services
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Digitalization is driving delivery differentiation
While there is no panacea to instantly fix all of the pressures impacting last mile delivery, savvy businesses are accelerating digital transformation programs to position them for success.
The technology powering driver and delivery operations in the last mile is an essential element – notably the devices used to tackle everyday workflows, like van loading and sorting or proof of delivery.
But with costs and capacity already at the limits, to prevent the paradox any last mile technology solutions must be:
- Proven – there’s little appetite for time-consuming and risky deployments of new technology, delivery efficiency and service levels simply can’t be placed at risk.
- Affordable – when the last mile accounts for 53% of the total delivery costs, margins are squeezed and unlocking savings is key.
- Scalable – rising volumes of parcels, combined with larger, longer and unexpected peaks, mean businesses need built-in flexibility to scale up and down with demand, cost effectively.
- Future-proof – consumers’ expectations are evolving and delivery businesses need to constantly evolve their service offerings to stay current. Existing devices like hardware scanners can inhibit the ability to rapidly deploy new and different services.
One technology that ticks all of these boxes? Deploying smart devices with mobile applications powered by high performance smart data capture software.
With just one cost effective smart device, combined with Scandit Smart Data Capture, delivery drivers gain superpowers to fly through multiple workflows with unmatched speed, accuracy and intelligence. Watch how it can help end-to-end.
Bring balance to operations with smart data capture
By equipping drivers with smart devices that act as high performance barcode scanners with advanced capabilities, such as augmented reality and ID scanning, post and parcel businesses can digitalize and differentiate operations:
- Rapidly, cost effectively scale delivery capacity up (and down) with peak needs – no need to purchase hardware based on preliminary forecasts.
- Get more from your existing capacity – boost speed, efficiency and drive down costs by optimizing delivery processes with high performance data capture.
- Prepare for rising customer expectations, like real-time parcel tracking or seamless proof of delivery, all without deploying new technology and increasing costs.
- Innovate last mile processes with a flexible, future-proof technology platform that unlocks even more efficiency gains. For example, Scandit MatrixScan enables drivers to capture multiple packages in a single scan to make sorting and loading superfast.
How Switching to Smartphones Delivers Digital Transformation
Yodel saved on hardware scanning costs and enhanced the user experience by moving to Scandit for a 7000+ delivery driver fleet.
Three ways to scale smartly
There are a few ways enterprises can capitalize on smartphones in the last mile to decrease costs, increase efficiency, scale with need and, crucially, satisfy customers. Here we highlight some common strategies.
1: Adopt a Bring Your Own Device (BYOD) strategy
One way to unlock smarter scaling and unpick the paradox? You can enable seasonal workers or contractors with scanning-enabled mobile apps on their personal smartphones using a BYOD (Bring Your Own Device) strategy.
We all know that peak season requires businesses to rapidly scale up in preparation to meet the upsurge in demand. At the same time, you need the flexibility to scale up or down without unnecessary expenditure when margins are under pressure.
A scanning-enabled mobile app helps control costs as seasonal workers can use their own smartphones, so there is no need to provide devices or hardware scanners. Delivery companies can easily tap into the gig economy, alleviating their recruitment challenges, as well as helping them to scale up quickly with minimal costs. Download the app and off they go.
And Scandit Smart Data Capture brings enterprise-grade scanning performance to your apps, no matter the make or model of the drivers’ device. So efficiency is maintained, as are employee and customer satisfaction levels.
Scandit Barcode Scanner SDK supports over 20,000 mobile device types and models.
2: Onboard peak drivers faster
Onboarding lots of new or temporary staff is an enduring challenge when it comes to scaling and service levels – especially for unplanned peaks.
Experienced employees deliver predictable levels of performance, which helps delivery companies to understand how closely their capacity will meet the forecast demands.
However, new staff are less effective, and their productivity is more variable. Any approach that helps to onboard and upskill them more quickly is especially valuable to maintaining quality and hitting key performance metrics.
Augmented onboarding with AR
It’s here that augmented reality (AR) is proving successful. Deploying Scandit MatrixScan AR technology within a delivery app helps to onboard new drivers by overlaying easy to follow instructions on the device screen, such as:
- Real-time information showing changing delivery instructions
- Highlighting the next package for delivery
- Delivery zone information for van loading
The AR-overlays assists with training, ensuring inexperienced and temporary employees are soon up to speed.
The technology also reduces last mile process inefficiencies. For example, a van can be more rapidly loaded by scanning multiple packages at once and the AR overlays help display the delivery zones. Any driver can quickly sort them all into the optimal delivery order.
In van loading field tests, conducted by a leading Japanese logistics business using Scandit scanning-enabled smartphone apps, the benefits included:
- Greater speed: Loading efficiency can be increased by up to 20%
- Better accuracy: A 65% decrease in incorrectly sorted parcels
3: Boost efficiency with smartphones and reduce last mile costs
It is quick and simple to deploy lower-cost, easily sourced corporate-owned smart devices – which optionally could also be used personally by workers. With scanning-enabled apps for drivers, scan performance for last mile delivery workflows can be maintained or improved without investing in additional inflexible hardware scanners.
Switching to smartphone scanning devices allows you to find the right balance of price and performance, depending on whether you need single scanning or more advanced AR capabilities.
The cost of smartphones enabled with Scandit barcode scanning is typically three times lower than dedicated barcode scanners, which reduces operating costs and financial risk by lowering your upfront hardware investment.
In fact, multi-functional smartphones enable you to transform and innovate stale processes, unlock new efficiencies and support new services. For example, add ID scanning to streamline and increase security by capturing proof of ID on the doorstep.
Squeeze more out of existing delivery capacity
Last mile delivery workflows are central to the logistics value chain. Any delay, error or unscheduled downtime brings additional costs and adversely impacts customer satisfaction.
How much a single failed last mile delivery costs on average.
Source: PCA Predict
But often these delivery processes haven’t changed or evolved for many years.
Integrating Scandit’s barcode scanning technology into smartphone delivery apps is a simple way to help employees efficiently tackle ever-growing volumes of deliveries – while ensuring faster and better delivery experiences for customers.
It allows drivers to use a single device for their multiple delivery tasks:
- Taking photos
- Routing and navigating
And with no need to carry multiple devices for different tasks, drivers are happier.
Scandit technology assures performance on any device, in any conditions. It enables speedy scanning of torn or damaged barcodes, from a distance to avoid bending, and in low light conditions, like inside the back of the delivery van, in a dark depot, or at the doorstep.
Delivery processes are automated and streamlined with smartphone scanning. This reduces the time it takes drivers to do tasks, like loading or unloading the van, with the ability to scan multiple packages simultaneously with Scandit MatrixScan.
With guaranteed scanning success, post, parcel and logistics businesses have full package visibility from the depot to the doorstep with every scan tracking progress, ensuring resources are fully utilized and customer expectations are set and met.
Enhance customer choice, while lowering costs with PUDO
The same app-based approach on smart devices makes it easier to roll out new capabilities to delivery staff and new services to customers.
For example, another option supported by smart devices is using pick-up and drop-off (PUDO) locations to completely do away with last mile delivery costs and further reduce capacity issues.
PUDO offers customers greater choice and a more convenient delivery option. More importantly, it reduces the strain on the costly last mile operation, helping limited resources to stretch further. It’s win-win.
High performance scanning and AR-powered PUDO
Both BYOD and corporate-owned personally enabled (COPE) smart devices (where a business-owned smartphone is deployed to drivers) that incorporate scanning and AR functionality can streamline operations at the PUDO location.
Employee productivity is increased as the devices accelerate processes like receiving, searching, providing proof of pickup, and returning parcels through reverse logistics. Scanning is quick and reliable with Scandit-powered apps on any smart device.
Employing AR technology along with multi-scanning functionality makes for even greater efficiency, so employees can scan all the parcels on a shelf to find items more quickly. Minimal training is required, and the AR overlays provide real-time instructions that prevent costly mistakes.
Unpick the Paradox with Scandit Smart Data Capture
Learn more about how smartphones powered by smart data capture can help you solve the last mile paradox or contact us to discuss how we can help you to scale operations quickly and affordably, while maintaining service quality.