Looking at the last mile: adapting to meet the demands of today’s shopping habits

Bren Standell, Commercial Director for Parcel Locker Solutions, Quadient

Beginning March 2020 retailers faced unprecedented challenges in their handling of parcels and packages. Customers’ ability to visit shops literally changed overnight as did the way they began to consume products and services. Goods delivery was thrown into a state of flux. Contact-free delivery and package pick-up options became important features within the retailer’s offering.

Throughout all this, retailers have had to adapt business models, operations and delivery processes to meet customer needs. This has been particularly apparent in the area of online order fulfillment.

Managing an increasing volume of goods to deliver can place a strain on logistics. Retailers must balance the cost effectiveness of their delivery operations with the need to meet high customer expectations. In this, it is imperative to minimise repeat delivery attempts and customers having to get in touch with delivery queries. Such eventualities are inefficient, generate cost and negatively impact the customer experience.

Last-mile delivery is the stage that finally brings parcels to consumers’ doors, or close to. A deceptively simple term, it must solve a range of problems to be successful. These include meeting expectations around speed and convenience.

While home delivery is generally favoured by consumers, it can be fraught with difficulties such as aligning customer availability with delivery schedules. Also, individual deliveries are costly and customers are reluctant to pay for this service.

Many retailers now offer click and collect for parcel pick-ups and returns. This, in addition to helping with customer convenience and the management of costs, has the added bonus of bringing consumers back into stores for upsell opportunities. However, once in-store, the experience must be positive, with customers served quickly and packages found efficiently.

Technology can help alleviate the issues associated with last-mile delivery in retail. Electronic track and trace of parcels with secure storage from which customers can collect their parcels in-store or at convenient pick-up locations, helps retailers meet delivery challenges and ensure a satisfying customer experience.

Striving to meet consumer expectations

Consumer expectations of retail are changing. Choice and convenience lead an increasing number of shoppers to look for what they need online.

Retailers are having to evolve their propositions to make any physical stores work harder for them. Some are incorporating value-add services into the traditional offering so that a trip to the shops becomes more than just shopping, it becomes an experience. Similarly, some shopping centres are transforming into leisure outlets, offering entertainment and dining in addition to retail.

Competition is high. Customers have a lot of choice, not only in what they buy but also how they buy it. Brand loyalty is therefore hard to build and maintain. In this environment, customer satisfaction with service as well as goods is key, with shoppers quick to take their money elsewhere if the offering falls below expectations.

Improving last-mile services

In an omnichannel environment, where customers shop both in-store and online and expect to switch between these channels easily, expectations are high that delivery will be seamless and convenient. In response to this, and the continuing growth in online shopping, the pressure is rising on last-mile.

By optimising key aspects of delivery, retailers can strive to meet customer expectations of the service. These include:

  • Speed: Between 2013 and 2015, the proportion of UK online shoppers choosing next-day delivery grew by 50%
  • Information: Keeping customers informed helps with customer satisfaction and minimises queries, thereby containing the cost of delivery
  • Choice: Over two-thirds (68%) of respondents to one survey had a parcel delivered to their home in the past year while click and collect is forecast to rise to ten per cent of retail sales by 2025   
  • Price: While consumers like the option for same-day or instant delivery, their willingness to pay for it is limited. To meet this, retailers need cost-effective ways of providing the service

Delivery Man

How technology helps transform last-mile delivery

Retailers and their courier company suppliers are striving to fulfil rising volumes of deliveries, while at the same time meeting expectations around speed, price and keeping customers informed.

They are turning to technology to help them. This takes many forms, including automation and robotics in warehouses and online tracking.

Yet, one of the biggest challenges remains last-mile delivery and specifically getting parcels into the hands of customers. While home delivery remains a firm favourite of shoppers, customer availability does not always align with delivery schedules. This can result in missed deliveries, parcels left in unsecured locations and trouble tracking down missing items.

So acute is this issue that Citizens Advice in the UK found it takes on average two hours for people who have had a problem receiving a parcel to get a resolution. This doesn’t make for high levels of customer satisfaction.

The growing click and collect trend

Reflecting the problems with home delivery, click and collect is gaining in popularity. With this solution, customers collect items in-store at a time that suits them. According to research by Savills, 47% of stores offer click and collect services in the UK, while Cybertill (2016) revealed that 72% of UK shoppers used click and collect with 49% saying they use it more than a year ago.

Click and collect goes some way to meeting customer demands for convenience, helps retailers manage costs and – perhaps most significantly – encourages further spending. So much so, that 65% of consumers made additional purchases in-store when collecting their orders.

Click and Collect

However, there are drawbacks to placing an additional burden of click and collect on in-store staff, in particular service delays. In fact, almost a third (32%) of shoppers said they had endured long queues at collection points, while the same percentage had experienced long waits while store assistants tried to find their parcels.

Secure locker storage solutions provide the means to address in-store collection issues and, for customers not electing store pick-up, the opportunity to collect from another convenient location. Customers are kept informed of the status of their delivery through electronic notifications, including a unique PIN and barcode when their parcel is ready to collect from a parcel locker. They can then collect at a time that suits, without the need for in-store staff to serve them. They simply enter the code via a touchscreen or scan the barcode to open the relevant locker.

In summary, as shoppers make an ever-greater proportion of their purchases online, it’s important that receiving their parcels will be simple and convenient. In this way, well-managed last-mile delivery becomes a selling point for retailers in the drive to attract and keep customers.

For more information about Quadient’s recently launched ‘Parcel Pending Lite’ solution – aimed at enabling retailers of any size to adopt the use of lockers, visit the Quadient website here.

Bren Standell, Commercial Director for Parcel Locker Solutions, Quadient

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