The battle for the last mile: the challenges of getting access and building connections
The challenge of delivering billions of packages globally is already being met by Amazon, while Alibaba is achieving the same thing in China and, in their modest way, online vendors in France and the rest of Europe are all attempting to follow suit. The entire question of the ferocious battle being fought in the online retail sector can be summed up in the fight for control over the famous last mile: how is it possible to ensure that a package arrives exactly where it is supposed to be, at the time that the end customer expects?
How is it possible to ensure that a package arrives exactly where it is supposed to be, at the time that the end customer expects?
The idea that customers have, that retail is now available everywhere and at all times, promising that almost anything can be delivered anywhere and at almost any time, represents a risk for many brands and businesses. There have, therefore, been two different strategic concepts, either created on the basis of the product offering or drawn from experience. However, studies show that customers are ready to buy other products than those initially selected purely because the other product can be delivered faster and more conveniently. Let’s not forget that 72% of consumers blame the online store for late delivery and that over half would not order again if they had a poor delivery experience!
What are the challenges of the last mile?
The first involves distance. The concept of proximity, or the ability to reduce distance, has become a genuine source of competitive advantage. A kilometre is a vast distance for a consumer. Similarly, customers can no longer wait a few hours to receive their deliveries. In France, home delivery at a precise time is customers’ number one priority: a local pick-up point comes a distant second, challenging the distribution model that major retailers believed they could impose.
Cost is a key factor: in other words, if deliveries are more reliable, and projected delivery times are more accurate, the overall cost is demonstrably less. The cost of a note showing a missed delivery, or the cost of a second delivery attempt, are punitive and frustrating for the customer experience. If an online retailer can limit the distance travelled and optimise the time taken to complete each delivery, success is guaranteed. Easy access to the product is a core expectation on the part of the customer.
How can the last mile be optimised?
The concept of a continuous connection with the customer is clearly understood to be an essential one. Not only must the package be tracked continuously: constant communication between the supplier, the courier, and the customer must flow naturally, with a flexible approach and relevant information. The quality of information and the speed with which it is conveyed, combined with ultra-accurate geolocation of both packages and customers, are key success factors in this crucial task. Meanwhile, customers are willing to give up their data to work closely with suppliers to improve their purchasing experience. As for retailers, they must be capable of processing information, interacting with their couriers, and ensuring that their products are fully traceable. Technical solutions are already operated by all market players, efficiency gains are still possible by integrating the advances that are made possible by technologies such as Artificial Intelligence and the Internet of Things.
To read also: The market of the last mile is rapidly evolving