Retail & CPG
How Retailers in the US Can Step Up Their Delivery Game
Dec 23, 2022
8 mins read
Online shoppers are growing in number year after year, and so are their delivery expectations. According to a study, there were 268 million digital buyers in the United States in the year 2022 alone. This number is said to increase to almost 285 million in 2025. Not only this, 62% of online shoppers in the US say delivery speed is what makes for a good purchase experience. This is reason enough for retailers to double down on their delivery efforts in the last mile. But even with this knowledge, what’s stopping retailers and e-commerce companies from providing excellent delivery experiences to their customers?
Roadblocks for retailers to successful delivery experiences:
Retailers have been pulling out all the stops to make sure that customers have delightful shopping experiences, but are hitting a brick wall due to below delivery challenges:
1. Lack of customized delivery options: Every customer is different. Retailers must be able to cater to the unique delivery preference of their customers. Many retailers try to adhere to customer preference in attempting to commit to faster delivery times but fail in the long term due to capacity and cost constraints, leading to subpar delivery experiences for customers. Retailers need a robust logistics solution that helps them align their capacity with customers’ delivery preferences.
2. Delayed deliveries due to manual warehouse operations: Benjamin Franklin was right when he said that time is money. Delayed delivery is one of the biggest challenges plaguing retailers and hurting their bottom line. According to a study, 69% of shoppers would switch loyalty if the product they ordered didn’t reach them within two days from the assured date. Retailers need to find ways to make sure timely deliveries are their number one priority. Warehouse operations such as manual sorting of packages can be extremely strenuous and lead to delayed deliveries.
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3. Managing peak season load: Not being able to manage huge demand spikes is another major cause for poor delivery experience for retailers. In 2021, retail e-commerce holiday season sales in the United States amounted to about 213 billion US dollars. Forecasts suggest that online sales for the holiday period would grow by about 2.5 percent in North America in 2022.
Managing millions of orders itself is a herculean task for retailers, coupled with huge spikes in demand during the holiday season can really put a load on their logistics. They must think of adopting digital transformation to adapt to these changes.
4. Failed deliveries: What’s worse than late deliveries? Failed deliveries. 5% of total orders never make it to the intended destination. That’s a lot. No wonder retailers are having a hard time providing top notch customer experiences. This could be due to fuzzy addresses to unoptimized route plans. Retailers should leverage cutting edge technology solutions to overcome this major roadblock.
5. Steep shipping costs: According to a survey, 2,000 US retail shoppers say that the top cause (58%) for cart abandonment is high shipping costs. Retailers often partner with third-party carriers to deliver goods. Choosing a suitable carrier can save you money and improve customer experience. Retailers need to have efficient contract management tools to manage carriers better.
6. Visibility gaps for customers: 50% of customers in the absence of accelerated delivery along with real-time tracking status of the product, abandon shopping with that retailer. Every customer craves transparency in the era of digitalization. Providing real-time order tracking can not only put the customer’s mind at ease but also offer you visibility on the deliveries.
7. Lack of insights: Data is crucial to understand your customers. You are bound to fail without a proper solution to support you there. With the last mile having a variety of variables ranging from managing huge volumes of deliveries to on ground execution data, retailers would be flying blind and things could get really messy, leading to a breakdown of the entire last-mile operation.
8. Carbon emissions: Customers are leaning more and more towards environment-friendly deliveries, and some studies show that customers are ready to pay more and wait longer for their packages from eco-friendly retailers. Retailers don’t exactly have a track record of being environment friendly, however, that can change with effective fleet utilization via technology solutions.
Above are all the challenges that retailers face when their logistics system is not aligned with customer expectations. But what if we told you that all your delivery conundrums can be overcome by adopting last-mile delivery technology that provides refined and customized delivery experiences for your customers.
How to help retailers achieve customer delight
In the digital era, technology is revolutionizing the way retailers do business. From e-commerce to home deliveries, digital transformation has made customer experiences better. But customers always want more. Modern customers now want faster and customized delivery experiences to project delight. Here’s what your logistics software should possess to hit that delight button:
1. Delivery Linked Checkout: Retailers should implement a customized slot-based delivery system that factors in fleet, cost and customer behavior while providing the necessary insights for each delivery. Retailers can adhere to the preferred delivery times of customers without compromising operation excellence with our delivery linked checkout feature that provides capacity-led delivery plans to make the endeavor a successful one.
2. Automated package sorting: Implementing fulfillment centers close to high-density order areas will help you deliver goods at a faster rate and avoid delayed delivery. This is particularly helpful during the holiday season. But that doesn’t get rid of the vital issue—sorting of packages manually at fulfillment centers/warehouses corresponding to the address, contents of the package and vehicle type. This is cumbersome to say the least.
Deliver/hub managers need to leverage a logistics solution that has automated sorting capabilities. Locus provides just that. Locus’ dispatch management software, the entire sorting process is automated saving precious time for personnel and reducing time under the roof for drivers, thereby improving delivery speeds and driver and customer experiences.
3. Robust order management: Managing orders manually is a herculean task for retailers, considering the volume of orders that they receive. This is amplified further during the holiday season, as suggested by data above. Locus’ order management system powered by self-learning AI algorithms make your last-mile fulfillment smarter, saving you significant time spent on planning and scheduling day-to-day order.
4. Smart geocoder: Failed deliveries usually happen due to wrong addresses and having a logistic solution that provides exact locations by converting addresses into precise coordinates. Locus’ state-of-the art dispatch management software can convert even the most ambiguous addresses into accurate geographical coordinates to decrease the chances of failed deliveries and empty miles and increase drivers’ satisfaction.
5. Cut down carrier costs with contract management: Partnering with the right carrier will help you cut down shipping costs and retain customers. Locus’ contract management system helps you manage your carrier partners effectively by recommending the right carrier for your delivery needs based on cost, cargo size, track record, etc., giving you the best shipping price to quote for your customers.
6. Real-time tracking: Many customers, especially Millennials and Gen-Z, want complete visibility of their product journey from when they place their order. Retailers need to provide their customers with end-to-end visibility after they place their order. Locus’ dispatch management software provides real-time status of the order and ETA on a tracking page, which can be accessed by customers any time.
7. Data analytics solution: Leveraging a logistic solution that provides insights post every delivery to make future deliveries better. Locus’ last-mile solution is powered by AI-driven analytics that takes into consideration 180 real-world constraints to make last mile deliveries a walk in the park for retailers. Our advanced analytics not only provides insights to improve current deliveries but also considers on-ground post-execution data to provide insights that can lead to faster deliveries in the future.
8. Fleet management with CO2 emission tracker: Implementing a solution that reduces time of road for your fleet, effectively cutting down carbon emissions is the first step towards achieving sustainability. Our solution with optimized routing can help drivers make deliveries faster without worrying about traffic, bad addresses or other typical roadblocks, leading to high first-attempt deliveries and fewer empty miles and CO2 emissions. Our solution also offers analytics into how much CO2 emissions were emitted post each delivery.
Most, if not all of retailers’ challenges pertaining to delivery can be solved by adopting a robust last mile technology equipped with a customized slot-based delivery system.
Where does Locus fit in?
Locus has been helping retailers like Croma, Capitol Lighting, Lulu Group, to name a few, reduce operational costs and increase speed of deliveries, revenue, and overall end-customer satisfaction with our real-world ready dispatch management software, designed to deal with all last-mile logistics challenges We helped our clients enable over 650 million + deliveries, adhere to 99.5% of SLA, provide on-demand routing in under 30 seconds all leading to over $200 million in logistics savings. If adoption of last-mile logistics software is part of your business plan to improve delivery experiences for 2023, we can help you get the ball rolling.
Looking to enhance the delivery experience for your customer? Talk to our experts!
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ABOUT THE AUTHOR
B2B content writer with a keen interest in educating industry leaders on how leveraging technology can solve many business problems.Read other blogs by this author
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How Retailers in the US Can Step Up Their Delivery Game