It is rare that a company-employed courier delivers an online purchase. The exceptions being independent stores that distribute and install locally. As a consequence, retailers are handing over an essential part of their customer experience to a third party courier. Online retailers are beginning to realise that one of the most crucial parts of their customer’s journey is out of their hands, and potentially damaging the retailer-client relationship with poor service. In acknowledging this issue, some big-name retailers are taking upon themselves to provide the last-mile delivery service that puts them in charge of the entire customer journey.
If we ignore the possible hundreds of miles between dispatch point and delivery to the customer, the final stretch is the most important in regards to cementing client relationships. The Last-Mile Delivery stretch is the part that will affect the client most.
The client has seamlessly navigated from browsing to choosing and eventually paying for their desired product online, but the point that will be of the utmost importance is the point at which they receive the product. Whether that is because it is desperately needed or excitedly anticipated is irrelevant; receipt of their item is the single most significant event of buying online.
We can all be guilty of generalisation or losing perspective – we are human – but when we receive goods that are damaged or don’t receive them at all, we tend to blame either the vendor or the courier responsible for delivering the package. The final stretch (the last mile) to the customers chosen delivery point is the one that will have the most impact if it fails.
If a third-party distribution channel begins making poor deliveries, failing to deliver or damaging packages the complaint invariably goes to the vendor. It is probable that the vendor will have to refund lost or damaged items and face the possibility of losing future purchases from the customer. Moreover, may only recoup losses after litigation with the delivery company or claiming on insurance.
It is expensive in both revenue and reputation when customer relationships can be damaged beyond redemption by poor distribution channels.
The cost has long been a barrier for companies to implement a proprietary delivery provision. Moreover, when existing couriers and delivery providers already have established distribution networks, it has seemed redundant to try to replicate them.
However, if existing channels are failing or unable to commit to the same service level as your firm, it may be time to consider revisiting the idea of last-mile delivery for your customers.
Is your brand reputation worth the expense of implementing your own delivery service? Is the value of lost and damaged packages, and the increased insurance expenditure exceeding the cost of creating a distribution network for yourself? Are your lost customers worth spending money on a delivery system you can count on?
The mode by which companies may wish to implement their last-mile delivery service has been approached from many angles. Some companies have bought up courier businesses to add to their service. Others have looked at giving localised franchises to courier companies. These aren’t bad ideas and are an established methodology.
However, there are other options to explore. Companies (Amazon among them) and even some countries have investigated drone delivery for small packages and self–driving delivery vans with automated ‘robots’.
There are no definites at present. Yes, some companies are buying up small courier companies, and others are inviting delivery providers to bid for delivery contracts (with dedicated distribution channels). Amazon has been heading this way for a long time and is at the forefront of new delivery ideas.
At present, the situation stands that Amazon did not get federal approval for drone delivery of small parcels. No, self-driving delivery vehicles with their own associated robot delivery trolleys are not yet an option. However, 2019 appears to be a time when these options will be explored and developed more intensively.
Every retailer, whether brick and mortar or purely eCommerce, is trying to find a way to make their business the ideal source for their product, delivery excellence is one of several modes of achieving this aim.