The COVID-19 outbreak disrupted demand at its onset, but after the initial fluctuations, eCommerce has only boosted throughout the year. According to the data from Adobe Analytics, were up by 55% and would surpass total online sales in 2019 by late 2020 itself.
The pandemic induced a wave of anxiety worldwide and much of the surge in sales has been attributed to the fact that most consumers sought the comfort of retail therapy, especially earlier into the global lockdown. A fact highlighted by the dip in online sales as stores began slowly reopening – it is however obvious that COVID-19 has paved a new-normal for consumer habits and last-mile delivery expectations.
Last-Mile is the last stage of the order fulfillment process. It is the shortest distance-wise but it is the most pivotal stage of product distribution and often the most challenging one as well. It is the most expensive – due to fuel, transportation and labour costs that quickly add up – and accounts for 53% of the total shipping cost. It is also heavily affected by variables like customer’s location with respect to the warehouse, traffic on the route, customer’s availability, routing errors, discrepancy in tracking, inventory shortages, etc.
Truth be told, last-mile is a critical factor for most retailers’ reputation. 59% of consumers said in a survey that they would buy from a seller more frequently if they have a transparent, fast and easy delivery service. 48% of the customers between the ages 18-26 are most likely to voice their displeasure with poor service on social media.
It is clear that Last-Mile Logistics can build up or bring down a retailer’s reputation. Which drives many retailers to disrupt and innovate their last-mile solutions to make it more transparent, affordable or efficient.
Here are 5 emerging last-mile logistics trends of 2020:
Crowdsourced delivery models have gained popularity for reducing costs greatly and improving customer satisfaction as well. There is no need to hire a delivery team – these drivers deliver using their own vehicles, accepting pick-ups and drop-offs according to their convenience and availability. Online orders not only get delivered faster but customers also have the option of scheduling their delivery reducing immensely on lost/missed drop-offs. Crowdsourcing is a sought after solution for last-mile because it has a low set-up and operating cost and is an asset-light operation.
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2. Smart Tracking
By deploying IoT, smart technology and sensors, it is possible for both retailers and customers to have eyes on their package. Constant SMS updates, geo-tracking and thorough transparency go a long way in satisfying and retaining customers. Retailers, not strictly limited to tracking shipment progress, can even get live updates on weather condition and traffic status to ensure that the parcel can avoid as much disruption as is possible to reach its location in pristine condition and on time.
3. Autonomous and Robotic Deliveries
Labour accounts for an estimated 60% of the last-mile delivery cost. Prices even add-up drastically if there are any breakdowns along the way or unforeseen traffic. This has led to many retailers to experiment and innovate with robotic deliveries. Although yet to completely be integrated into the mainstream delivery methods, drones and autonomous vehicles appear to be the way of the future, especially post-COVID-19.
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While outsourcing remains the popular way to go about in 2020, owing to many companies offering an efficient 3PL (3rd Party Logistics) solutions, some retailers have turned to insourcing. In plain words, shippers use their own trucks to transport products to their immediate customers. However, since most retailers don't have a fleet at their service, they co-op to pool their resources with their competitors in the region to share their assets and reduce tremendously on their operating costs.
5. Rapid Fulfillment
We are the age of speed, quick, instant. Customers of today want fast deliveries and fulfilment, pushing shippers to move more products at higher than before rates. With companies like Amazon who have mastered their last-mile, offering customers premium next-day delivery or 2-3 days delivery at the very least, it is a priority for other retailers to catch-up if they want to compete with behemoths like that. The way for most retailers has been partnering with 3PL providers and powering their sales with their expertise in smart logistics.
Last-Mile Logistics is going through a revolution. With each day we see new technological advances pushing the roof of what is possible in the realms of last-mile deliveries and same-day deliveries. The future is only going to see eCommerce continue its growth.
As a retailer, if you wish to implement any of these trends in your eCommerce fulfilment strategies, reach out to Kuuka’s customer support where our experts will help you craft a customised solution that is tailored specifically to meet your delivery objectives and retail needs.