LAST-MILE DELIVERY: 4 TRENDS RETAILERS SHOULD KNOW
Last-mile delivery presents an excellent opportunity for eCommerce companies to make their services faster, more transparent, and more efficient. By optimizing last-mile delivery, companies can also cut costs, build their brand value, and enhance the customer experience.
So what can retailers do to make final-mile delivery work in their favor? New last-mile delivery channels are emerging all the time due to increasing demand. Let’s take a look at four emerging options and see which ones could help your business reap the rewards of last-mile delivery.
- Crowdsourced Package Delivery
Just as ride-sharing apps have revolutionized transportation, crowdsourcing is starting to shape delivery too. As customers demand faster delivery at a lower cost, some retailers are crowdsourcing last-mile delivery through local courier apps such as Postmates or Doordash. Customers simply select their preferred delivery time through the app, and a local, non-professional driver will deliver the package to the customer.
The biggest benefits of crowdsourced solutions are lower cost and flexibility. Crowdsourcing platforms can ramp their capacity up or down as needed, and more easily match supply of drivers with the fluctuating demand for deliveries.
Another benefit of crowdsourced delivery is that it can reduce overhead costs. Contracted couriers provide their own transportation to make deliveries and are typically paid per delivery or per shift. For companies, this means not worrying about warehouse operations, fleet management, or employee benefits — thereby offsetting some of the high costs and complex logistics associated with last-mile delivery.
- Personal Shopping
Some larger big-box retailers are deploying the crowdsourcing model even earlier in the delivery chain. Using services like Instacart, these retailers pay non-professional drivers to select ordered items off the shelves of their brick-and-mortar store, then drive those purchases directly to the customer’s home. This combines personal shopping and same-day delivery, strong value-adds for convenience-minded customers.
Personal shopping also helps retailers to better understand their customers. While many retailers can gain an understanding of customer needs through data analysis, forming a direct relationship with the customer gives retailers access to incremental information about the customer, enabling a truly personalized experience.
- Autonomous Last-Mile Delivery
Fully automated delivery may sound like science fiction, but it might not be far off. Amazon’s drone delivery service has made headlines well before its launch, and numerous startups have developed their own delivery robots. Some of prototypes can take consumers’ packages right to their front door, even navigating stairs and elevators.
Other retailers are considering autonomous vehicles to retain a more typical last-mile infrastructure while lowering personnel costs. For instance, Walmart has partnered with Ford in a pilot program that uses autonomous vehicles to deliver purchases directly from stores. The two companies will test out the concept as part of an existing grocery-delivery partnership between Postmates and Walmart. Ford is currently testing research cars in autonomous mode (with safety drivers behind the wheel) to collect high-definition mapping data across the Miami area. By 2021, the Ford vehicles are expected to be fully autonomous, allowing consumers to retrieve their groceries without the help of a human driver. According to experts, using self-driving vehicles to deliver goods to consumers would slash shipping costs roughly in half.
- USPS Destination Delivery Unit (DDU) Shipping
The delivery channels mentioned above offer insights into what the future may hold for last-mile delivery. However, that doesn’t help retailers who are looking to improve their last-mile delivery today. Fortunately, that’s where destination delivery unit shipping comes in.
Using this model, a retailer’s shipping partner will transfer their products to a USPS destination delivery unit (DDU) for the last mile. These postal service facilities sort and deliver mail within a specific postal code. Because USPS vehicles deliver along predetermined routes, retailers can use this existing infrastructure to handle last-mile delivery faster and more cheaply. And if a retailer’s shipping partner has a strong relationship with the USPS, this can further help keep shipping times and costs low.