Understanding Final Mile Delivery: What Brands Need To Know
Published on: April 30, 2022
Updated: October 4, 2023
In an era where e-commerce brands like Amazon Prime and Walmart dominate the playing field, consumers have higher expectations when it comes to the final mile delivery experience.
It’s important brands devote ample time and resources to the post-purchase experience, both for their bottom line and for customer satisfaction. Studies show that final mile delivery is the priciest part of the fulfillment chain, accounting for 41% of supply chain costs and 53% of shipping costs. While retailers traditionally have expected consumers to front a portion of delivery fees, our research at parcelLab shows most consumers now expect free delivery, which can minimize retailers’ profit margins.
Lately, brands have been working tirelessly to adapt to e-commerce fulfillment trends driven by evolving consumer demands. Industry data shows that last mile services are an important differentiator for consumers, directly affecting the success of e-commerce players. For example, our data revealed that up to 68% of online customers expect post-purchase communication, such as for delivery delays or return confirmations.
With location-based crowdsourcing apps like Uber and DoorDash redefining customer expectations around the choice, speed, and overall experience during the final mile, it’s important to ensure a hiccup-free CX. However, with factors like traffic, poor communication, the weather, and human error, you could face risks like couriers delivering the package to the wrong location or having the customer not being able to accept it. The end result? A dissatisfied customer, and your profit going out the window.
But what exactly is final mile delivery, and why is it so important for a great post-purchase experience? In this article, we’ll take a look at the final mile delivery experience, its importance, and how your brand can successfully optimize the last mile delivery process.
What’s final mile delivery?
First things first, let’s explain what exactly final mile delivery is. The final mile, also called the last mile, is the supply chain stage where goods travel to their final destination. In other words, it’s the stage when customers’ goods travel from the distribution hub or fulfilment center, to the delivery destination, such as the customer’s home.
Although this seems like a straightforward process, last mile logistics are increasingly complex and costly, given the immense amount of coordination that needs to be done for fleets to guarantee on-time delivery. From dozens of routing options to external factors like the weather and traffic, a lot goes into executing successful delivery operations.
And yet, many brands aren’t leveraging the available opportunities to meet the expectations of today’s customers, while also connecting with them on a deeper level — meaning there’s an untapped market that retailers absolutely should leverage.
Why final mile delivery matters?
There are two main reasons why brands need to focus on optimizing the last mile delivery process: providing a better customer experience, and reducing overall costs. Let’s take a deeper look at the top 5 benefits for your brand when you optimize the final mile for your customers.
You’ll improve the customer experience
We’ve already touched on this, but it’s worth highlighting again. Customer expectations around the last mile delivery process when online shopping have evolved, and they want to remain updated about their order once they’ve paid for it. By using an Operations Experience Management platform like parcelLab, you can provide personalized, real-time updates to keep consumers in the loop about their order status, so they’ll know exactly what to expect and when.
As an example, you could have a unique tracking page or customizable sales emails with branded content, allowing your customers to see the latest update on their order — like we did for Bose. Through a combination of powerful last mile delivery tools like information hubs, combined with your own branding, you can not just manage, but improve your customers’ experience.
Better manage customer expectations
The trip between the transportation hub and a customer’s doorstep can be full of inefficiencies. For example, delivery points in more rural areas might be miles apart, while urban deliveries can take longer because of congested routes. Plus, there’s always the possibility of unexpected situations popping up, like diversions because of an accident. With real-time updates, your customers won’t be left waiting because of a delay, allowing them to have realistic expectations of when the delivery driver will show up.
Reduce returns and chargebacks
Another one of the challenges of last mile delivery can include returns and chargebacks. If your customer doesn’t know when to expect their package, or hasn’t been informed there’s been a delay, they may not be at home. This could lead to the shipment getting sent back to the fulfillment center, and your customer fulfilling their purchase elsewhere.
Alternatively, retailers may need to attempt to deliver the package a second or third time, further eating into their profit margin. With proactive notifications and updates, you can significantly cut down on returns — like we did by 5% for our client Weltbild.
Minimize customer support calls
If customers don’t know when the delivery service driver will show up, many will try to get an update as quickly as possible. If this happens regularly, your customer service team could be overloaded answering emails and phone calls.
With real-time progress updates that are updated if there are any delays, you can avoid overburdening customer support, while improving customer satisfaction. For example, our event-triggered communication reduced Granit Part’s customer support calls by 20%, and their emails by 15%, saving on costs and the workload of their sales team.
Be a more competitive player in the e-commerce realm
Despite consumer expectations increasing, many e-commerce players are woefully behind in providing a great final mile delivery experience. By making sure you stay connected to the consumer through various touchpoints in the post-sales journey, you’ll guarantee a seamless final mile delivery experience, create lasting relationships, and even boost both your revenue and repurchase rates.
How to successfully implement final mile delivery
Okay, so you’re ready to step up your game and optimize the final mile. But how can you ensure that you’re set up for success?
Here are our top 5 tips to do just that.
Ensure you’re able to centralize orders
To provide a great final mile delivery, a lot of moving parts need to be considered. Retailers often work with several logistics companies, warehousing units, and other shipping companies that could use different software.
To ensure your data is harmonized and your team is working from one single source of truth, opt for an Operations Experience Management solution that centralizes all your orders and data sources into one platform. That way, no matter which carriers you’ve partnered with, you’ll have all the support you need.
Use an Operations Experience Management platform like parcelLab
At parcelLab, we offer brands one portal that takes all their complex data and turns it into powerful, actionable solutions. By optimizing the post-sales customer journey using your branded content, we’ll help you build stronger relationships with your customers, whether it’s through delivery updates, the delivery itself, or returns. Of course, our analytics not only improve the customer experience, but help brands bring down their last mile delivery costs. Now that’s a win-win.
Make sure you have real-time visibility
In a world where consumers can track their pizza or groceries in real-time, the final mile should be no different. Choose a platform that offers integrations for all major carriers, so your customers can see exactly where the delivery driver and their package is, 24/7. Whether they’re checking their order status via an email or SMS you’ve sent them, or directly on your website, the power of up-to-date delivery tracking is one companies need to tap into during the last mile.
Prioritize customer communication
There are plenty of opportunities retailers can capitalize on during the post-purchase experience. Your customers might have all sorts of questions about their order, from when to expect their package, to what to do in case they miss a delivery. Some touch points you can implement for your customers through parcelLab include our order status page, SMS’s, and chatbots. (Want to know more? Read our blog on keeping customers updated through last mile delivery.)
Analyze your last mile data and optimize accordingly
One of the biggest last mile problems is that deliveries can be rife with inefficiencies and ballooning costs. Final mile solutions like parcelLab use bespoke algorithms and intelligent learning to process the immense amounts of data we receive, no matter how many third-parties you work with.
Combined with outside sources, such as the weather, traffic updates, or even opening hours, we translate complex data inputs into an engaging and informative customer experience. Plus, brands can use the data from completed deliveries to minimize weaknesses and bottlenecks (for example, by using dynamic routing, which can reduce fleet miles and delays.)
What to look for in a final mile delivery partner
There are plenty of final mile delivery solutions to choose from, but we believe there are a few key differentiators which set aside some providers from the rest. If you’re on the lookout for the perfect fit, make sure your prospective partner does the following.
Integrates with your existing systems and carriers
Providing an engaging post-sales experience for customers shouldn’t be a hassle. If you’re going to use a final mile delivery partner, make sure they integrate directly with all systems and carriers you use. That way, you won’t have to worry about potentially dropping a carrier and finding a replacement when you make the switch. At parcelLab, we work with over 150 carriers across the world, including local subsidiaries of global third-party logistics providers, such as DHL, DPD, or GLS.
Enables you to customize your customer communication
There’s no denying that waiting for a package can be an emotionally-charged time. That’s why the post-sales experience is the perfect opportunity for brands to stay connected to their customers and build brand loyalty.
parcelLab offers branded communication, so you can customize your emails, landing pages, updates, or messages. By offering a rich experience custom-tailored to your unique style, you’ll make a lasting impression on your customers and stand out in the sea of uninspired customer communication.
Has strong analytics capabilities
To optimize your operational performance, you need a provider that offers powerful data analytics to inform your decisions. With the right tools, you can utilize dynamic routing to increase performance efficiency, optimize your routes, and minimize risks and disruptions. At parcelLab, we strike the balance between cost-efficient final mile delivery and maximized customer satisfaction, making sure everyone’s happy.
In 2022, the final mile experience is an opportunity brands can’t miss out on. With customers expecting a seamless and branded experience even post-checkout, it’s important to match their expectations and provide an enhanced last mile delivery experience.
parcelLab is the leading Operations Experience Management Platform that supercharges your end-to-end consumer contact. From shipping to returns, we help businesses not just meet, but proactively exceed customer expectations. With parcelLab, you’ll deliver improved returns experiences and generate impressive customer reviews by using branded touch points and our powerful post-sales data analytics. Read customer success stories here.
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