Recently there have been plenty of changes that have occurred that affected Last-Mile Delivery. One of the most significant and most complicated changes included the coronavirus pandemic as it impacted consumer shopping habits dramatically. Let’s have a look at some trends that are going to emerge for Last-Mile Delivery in 2021.
What is Last-Mile Delivery?
Last-Mile Delivery is one of the last processes in supply chain operations. This is when delivery packages are moved from the warehouse shelf to the final destination – which usually refers to a customer’s doorstep. Last-Mile is essential as it serves as a touchpoint for the brand and the customer, and it gives the customer an impression about your brand. This is why businesses need to ensure that the customer’s experience is always positive.
Last-Mile Delivery Trends
Last-Mile Delivery evolves with each passing year, but these changes have been more dramatic over the last couple of years. These are some trends we can expect this year.
1. Use of Urban Warehouses
The rise in more customers using online shopping has increased the demand for quicker deliveries. To ensure faster deliveries, some companies have started looking at either building or renting warehouses closer to urban areas. Ecommerce companies having warehouses in an urban area can provide quick deliveries to customers as they have easier access to products. Another added benefit of having a warehouse in urban areas is that you can decrease transit time. You have easier access to labourers and delivery agents needed to fulfil orders.
One way that eCommerce businesses are using to gain additional warehouse is by renting spaces from physical stores that they transform to accommodate them for order fulfilment. However, due to limitations in the area, businesses can rent out more spaces and differentiate them based on the kind of delivery used, e.g. one for the same day and the other would be a no-rush delivery warehouse.
2. Insourcing Last Mile Deliveries
In the past, companies chose to outsource last-mile deliveries. However, more companies are now looking at handling last-mile deliveries by insourcing and using their own vehicles. Companies who decide to insource last-mile deliveries have started their own local delivery services and use the vehicles they own, and they hire their workers. Part of the reason for this decision is the demand for the last mile deliveries. It allows them to save costs and reduces dependence on another company.
3. Same-Day Deliveries Priority
Instant gratification is becoming something that most are seeking now due to technology. The same applies to deliveries for customers as they look for faster order fulfilment. McKinsey and Company reported that millennials customers were willing to pay a 30% premium to receive same-day delivery. This shows how profitable more immediate fulfilment is, and businesses should focus on moving goods quicker and place greater emphasis on logistics. In order to achieve same-day delivery, companies need to plan better for deliveries to make this a reality for all customers.
4. Flexible Delivery Options for Customers
The reality is that everyone is different, and we all have different ways of doing things. The same is also true for your customers. The delivery options that you offer might be perfect for those that work from home, but they can be a nightmare for those who don’t. In order to accommodate all your customers, you need to be willing to consider the different lifestyles that they lead. Part of doing this is by offering them more delivery options such as choosing a different delivery time or even the delivery location by allowing customers to pick up their package at their local convenience store.
5. Greater Visibility for All Customers
In the past, customers had to send emails or call in order to enquire about the status orders which is expensive for both the customer and you. Therefore, to save time and costs, delivery partners were responsible for sharing information regarding the delivery status to customers. The Internet of Things (IoT) assists with tracking and sharing data throughout the supply chain in real-time. This ability to track and share data allows you to also share this information with your customers about the exact location of their order through a smartphone app, which ensures that they have more visibility.
6. Drivers Being Involved in The Sales Aspect
Last-Mile Delivery is the last part that forms part of the customer’s experience. This is why drivers are important as they are able to convert customers. With the use of shopper’s past data, companies can predict the likes of a customer towards a particular item. Drivers can serve as an AI-augmented salesman where they try to sell you products based on your ‘recommended items’ from the website, and they bring those products to your doorstep.
7. Use of Autonomous Vehicles and Drones
Technology has always been important in Last-Mile Delivery as it simplifies processes. The new and disruptive delivery technology that some companies have started with are autonomous vehicles and robotic deliveries through drones. Amazon was one of the first companies to invest in this technology as it invested over $500 million from the autonomous technology developer Aurora. Autonomous vehicles eliminate the human limitations that complicate the process and delay deliveries; it also reduces labour costs like salaries paid to delivery personnel. At the moment, few companies are interested in using this kind of technology, and they prefer the way deliveries are handled now.
Most of the changes expected to occur for last-mile deliveries include greater dependence on technology which will also affect the customer’s experience in a positive light.