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Future gazing last-mile delivery

By Jack Underwood, CEO and co-founder of Circuit

In 2020, there was a significant increase in online shopping. According to an Ofcom report, customers across the UK spent over £110bn last year, a 48% increase from 2019. Whilst this is a relatively recent trend, it shows no signs of slowing down. Our survey found that 85% of online shoppers will either increase their online shopping or maintain it in 12 months.

Online retail gives an excellent opportunity for retailers to reach customers beyond their local high street. However, with increased demand in e-commerce comes an increase in the potential for issues to arise. To mitigate such problems, retailers must make sure that customer satisfaction remains a top priority during the delivery experience.

One of the most frustrating elements of delivery is the gap in communication between customers and couriers which can result in missed or lost packages. After a failed delivery, couriers will re-attempt the drop-off. Yet, the potential for the same issue to reoccur remains if the communication gap is not bridged. This wastes valuable time for drivers and frustrates consumers, costing retailers both productivity and satisfaction levels. However, we can fix this issue.

The future of last-mile delivery will be better. Technology-first processes will improve the delivery experience in a way that is cost-effective and efficient.

Outsourcing last-mile delivery

On-demand delivery is already here, but it is not yet commonplace. Increasingly, customers seek instant gratification and the opportunity to buy goods and have them delivered on the same-day. Amazon is renowned for being at the forefront of delivery development. They offer same-day delivery on certain products, as do couriers, including FedEx and DPS, in some markets. As e-commerce grows and customers get used to buying everything online, the demand for same-day delivery is only going to increase.

For couriers, same-day delivery is costly. In the future, we can expect to see them outsource this part of the supply chain. Gorilla and DoorDash have already moved into this space for groceries. More businesses will soon capitalise on this need for super express deliveries for all other online shopping sectors. These businesses will be able to undercut the traditional couriers by transporting goods straight from the retailer to the customer, without stopping at the depot. Retailers and customers will save valuable time and money. Retailers will also have a wider choice of last-mile delivery partners as more businesses compete for same-day delivery services. It is allowing them to choose an alliance that works best for their needs.

The splitting of local and national deliveries

Pricing structures and strategies will change as last-mile delivery grows. Customers currently pay the same price whether the retailer is three or three hundred miles away; a missed opportunity for retailers to gain favour with local customers. In the future, we can expect to see couriers splitting local and national deliveries. Same-day deliveries, where the courier can go straight from retailer to customer, will become cheaper than national deliveries that need more time and often a drop-off.

A further change will be in the increase of same-day deliveries being assigned based on the locality of the drivers. Data on driver routes is currently available but not set up to assign which drivers deliver which packages. Significantly increased delivery efficiency will be made by allocating packages to drivers already travelling in a specific direction, giving retailers even better value for time and money.

Recruitment supported by data

Lastly, in the next five years, data-driven delivery driver recruitment will likely see a big increase. Capturing data whilst drivers work is one of the main benefits of delivery logistics technology. . Capturing data whilst drivers work is one of the main benefits of delivery logistics technology. However, it is rare to compare customer feedback against this data, which often overlooks valuable insights. Retailers should look to integrate software that can receive recipient feedback already built-in. This significantly increases the feedback retailers can collect. 

Retailers should view delivery drivers as an extension of the brand. As e-commerce and delivery grow, the delivery driver is often the only human link a customer will have with an online retailer. This means that the delivery driver will have an enhanced role in the customer’s retail journey.. The driver’s customer service and the delivery process have  a huge impact on a retailer’s reputation, as around 1 in 4 customers (24%) told us that they would be actively discouraged from giving a recommendation after a poor delivery experience.

In the future, retailers and courier companies will analyze customer feedback on the delivery service to better plan driver routes and salaries. Couriers will choose the most efficient delivery drivers. They will no longer be competing purely on price but a balance of price, speed and customer satisfaction.

By Jack Underwood, CEO and co-founder of Circuit

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