Carriers powering through that last mile, the final delivery approach to the customer’s front porch with their order, can be the bane of existence for retailers. A wet package, a missed delivery appointment, or even a cold pizza can crush customer satisfaction.
The National Retail Federation estimates 108.5 million Americans shopped online the weekend after Thanksgiving this year. So as Black Friday and Cyber Monday morph into a protracted holiday sales season, the stakes on perfecting e-commerce fulfillment grow.
Those orders, and millions more, make for many last miles this holiday season. Each last mile, in turn, tests a logistics process that increases in risk as shipments get further away from the retailer and closer to the customer.
Invest in visibility to diminish risk of returns, while protecting your brand
E-commerce may have shifted the process by which goods are acquired, but consumers still expect timely, non-damaged goods irrespective of the source.
Whereas previously retailers could display only the best quality goods on their shelves and record damaged products for claims to their suppliers, retailers now find themselves ironically held accountable for the same damages by the end consumer.
An October survey of 558 online shoppers by Dotcom Distribution found 47% of respondents decided to not shop again at a retailer due to poor delivery experiences. Meanwhile, a Dropoff study found that 94% of consumers blame the retailer for poor delivery, while only 42% blame the delivery provider.
Imagine, for example, ordering a Secret Santa gift five business days in advance, only to receive a damaged good, or not receive the product at all.
Supply Chain Dive
However, poor delivery is not limited to damaged goods - many consumers now consider on-time to delivery to be just as important, and are willing to pay a premium to ensure it. Dropoff estimates 89% of consumers are concerned about receiving a product late, while 83% are concerned about damaged products.
Imagine, for example, ordering a Secret Santa gift five business days in advance, only to receive a damaged good, or not receive the product at all.
In light of the increased importance of e-commerce fulfillment, some retailers are investing in visibility solutions to improve their delivery capacity.
“With the increasing pressure on quick response to things like online and store replenishment orders, the importance of maintaining visibility throughout the lifecycle of an order continues to grow,” said Ross Elliott, co-founder and chief strategy office of Minneapolis based supply chain management software provider Highjump.
“The vantage point of the stakeholder determines whether inbound or outbound visibility is of primary importance, but both play a vital role in providing ongoing customer service improvements,” he added.
From reactive to proactive: How visibility shapes the customer experience
“[The] ability to take action, either proactive or reactive, is dependent upon the timeliness of information that is available to [our customer],” said Rob Taylor, CEO of Convey. “They care about whether an inbound order is on time so that they can build contingency plans to meet their customer’s expectations.”
A proactive approach to managing fulfillment is the focus of the Austin based logistics software company Convey, which focuses on delivering large items like washing machines and works with Jet.com, Build.com and Livingdirect.com.
“Retailers can have up to 20 carrier relationships, including parcel, less-than-truckload, and white glove delivery services,” said Taylor. “We can get the API data, normalize and integrate it into our optimization software, analyze it, and serve it up to retailers in a dashboard approach.”
Taylor notes that their real time data analytics can often identify carrier issues before even the carrier is aware. “We can recognize stalled shipments at a terminal and work to proactively advise the retailer to reroute the shipment or notify the customer of a potential delay,” said Taylor. “Twenty percent of distressed in-transit shipments, even something simple as an incorrect address, can be escalated and resolved before the customer even knows about it.”
Real time data analytics can often identify carrier issues before even the carrier is aware.
Rob Taylor
CEO, Convey
The delivery from the local freight terminal to the customer, an example of last mile, is one area that gets the attention of Taylor. “The performance of the carrier is often not aligned to the needs of the customer,” he said. “The carrier often tracks on-time delivery when the freights hits the local market terminal, not when the freight is delivered to the customer to complete the order.”
This misalignment impacts not only the retailer’s delivery commitment, but the customer expectation as well. “The customer experience suffers,” said Taylor.
The buyer needs to have a level of control for the final delivery, especially for a large item that has a specialized delivery like an appliance. “The customer should be able to receive a text that the shipment is in the local market and be invited to make a connection with the carrier to schedule a delivery appointment, online,” says Taylor.
Returns are also an issue that Convey is working on, using a web interface to schedule the pick-up. “Customers may get shipments that are damaged or defective, and it is cumbersome to get the shipment out of the house,” said Taylor, noting that sometimes the product will need to be shipped to another location via an alternate carrier. “We need to reinvent the customer experience.”
A practitioner turned educator, Rich Weissman has more than 25 years of experience in all facets of supply chain management. He is past president of the Institute for Supply Management –Greater Boston, and the recipient of the Harry J. Graham Memorial Award, the highest honor bestowed by the Association.
