With a massive demand for daily life essentials, the world is staring at another tough time. Whether it is top retailer brands, or small retailers, both are facing the heat to allocate their resources for standard delivery, next-day delivery and same day delivery.
As the in-store traffic has reduced, things are not going smooth for retail businesses. They are necessitated to fulfill their customer orders online to keep their businesses running smoothly. The orders are flowing in for both the long-shelf life and short shelf life essentials.
Increasing order volumes have landed businesses on a crucial stage where they have to work on their same-day deliveries. In this situation, it is important for them to understand how to adapt and build themselves for same-day deliveries. Presently, the big question for them is how to make same-day deliveries work for them.
What is same-day delivery?
Same-day delivery is a quicker delivery option for consumers to receive their packages within the 24 hours they have ordered. If orders are placed in the morning the customer may get it within the end of that day. Whereas if the customer makes the order in the evening, he or she will get it by evening the next day. Hence, we have used the term 24 hours.
Beyond being a quicker option, same-day delivery is expensive and poses some challenges to the businesses.
Challenges of companies implementing same-day delivery
- Continual modification of infrastructure to accommodate on-time delivery
- Lack of skilled drivers and field service professionals
- Lack of data on available inventory
- Difficulty for retailers to manage staff regular in-store sales and same-day deliveries
- Balancing a seamless customer experience and costs
- Lack of planning to anticipate and forecast customer orders
- High costs for small businesses to train and retain drivers
- Shorter product life cycles
- Same-day and Next day delivery competition
- Burden of free shipping costs
- High risk of incorrect shipments
Why are businesses using same-day delivery?
- Retain customers and build loyalty
- Minimize the return rate of goods
- Coordinate and streamline the purchase process for customers
- Increase the conversion rates for businesses
- Increase staff productivity thereby maximizing revenue
- Reduce the risk of damage, spoilage and missing shipments
- Incentive for businesses to raise their price margins
- Easily attract a younger demographic audience
- Expand customer base with improved customer experience
- Reduce the stockpiling of inventories minimizing the inventory cost
Components involved in making same-day delivery successful
Same-day delivery has become the best way for companies to turn their newbie customers into brand loyalists during this tiring COVID-19 pandemic. Here are the necessary elements required for businesses to make their same-day delivery successful.
Tracking Service cost:
Logistics companies that are partnering with the brands should consider the overall cost of same-day delivery services. In order to save shipment fees and avoid paybacks, they should determine the order cut-off time when parcels have to be delivered.
A robust delivery system is essential for logistics businesses to manage their same-day delivery activities. They should have a planned and forecasted system to effectively handle customer complaints or customer disputes. This delivery system should focus on answering questions like:
- How to ensure that parcels have reached the customer?
- How to prioritize the orders and maintain the on-time delivery scores?
- How to validate and manage inventory in real-time?
A proper setup of delivery systems helps logistics companies to organize delivery tasks, distribute the functions, and facilitate same-day delivery.
Real-Time Inventory View
Retailers struggle to determine whether goods are available for the same-day delivery during the checkout process. They should invest more in IT infrastructure that improves the real-time tracking of the inventory and maintain optimum safety stock levels.
Companies should implement several contingency plans when unexpected events reduce the stock levels in stores. A real-time inventory monitoring helps them reserve the surplus stock levels and use them effectively during such dire circumstances.
Same-day delivery demands an increased focus on the delivery speed compared to the other elements of fulfillment. Keeping this in mind businesses should hire the right professionals with experience in logistics, deliveries, accounting, technology and bookkeeping.
If companies approach same-day delivery as an addition to the ordinary delivery service, then they should determine the types of labor for change management and transformation.
Product Availability Locally
Regional product availability is the most crucial factor that determines the success of the same-day delivery. The majority of the same-day delivery product volumes cater to the highly urbanized areas.
Same-day delivery is a service that is still unavailable for the suburban, rural and countryside areas in the US. With local product availability, multichannel retailers can maintain a network of stores for same-day delivery. But online retailers should make huge investments in building their own network of local urban warehouses.
Quick Picking and Packing Processes
Same-day delivery orders require quicker picking and packing processes of products than regular orders. The biggest lesson from Amazon that businesses should implement in same-day delivery is making significant investment in the logistics infrastructure.
The coronavirus pandemic has created a new urge to effectively fulfill omnichannel orders. The retailers should improve their capability to efficiently fulfill the orders in-store. The click and collect e-commerce model has paved the way for making same-day deliveries faster.
Flexibility to handle ad-hoc deliveries
Another crucial element for success in same-day delivery is the flexibility to handle the ad-hoc deliveries. The ability to fast track and manage the ad-hoc delivery requests with the standard delivery orders. With dynamic rerouting and geofencing, logistics providers can quickly respond to the new shipments.
Delivery Logistics Software
A delivery logistics software is the most crucial component to translate delivery planning to last-mile success for businesses. It adds more intelligence to the logistics operations and guides them to make the right decisions at the right time. Whether it is assigning orders, tracking drivers performance, providing optimal routes, sending alerts, delivery logistics software is the go-to tool for same-day delivery success.
How to Implement Same-day Delivery Successfully
In 2019, the same-day-delivery market in the United States amounted to 5.87 billion U.S. dollars. By 2024, this market is forecasted to reach 15.6 billion U.S. dollars. Same-day delivery in e-commerce in the U.S. is one of the most requested services.- Same-day delivery market in US from 2020 to 2024, Statista
Earlier it was only Amazon Prime and Walmart’s next day delivery that were offering same day delivery services. But now mid-scale and small-scale businesses have jumped into this business.
Same day delivery offers a prospective future for many businesses and its investments are going to increase once the post-pandemic begins. This is hi-time for businesses to learn how to implement their same-day delivery plans successfully.
Limiting to a certain distance and location
The first step crucial for implementing a same-day delivery program is to demarcate the distance and location that businesses will be serving their customers. With location intelligence data, they get insights on where their customers work and reside and location of their fulfillment centers.
Businesses should set up their same-day delivery in areas that are not far from stores or warehouses. The location factor ensures that not every customer who places an order can use same-day delivery as an option at checkout.
Businesses that handle same-day delivery in-house can operate within the proximate areas of their customers. Going beyond this distance can lead to increasing costs and labor charges.
Analyze past customer habits and demand
Businesses entering same-day delivery should analyze the past buying habits and delivery preferences for customers. They should have a detailed estimation of the items that customers highly prefer for same-day deliveries and their frequencies. This provides them with a good idea of what to keep in an inventory regularly.
Businesses should also track the shipping history to track if there is an increase in the same-day delivery requests. They must have a clear analysis of the seasonality of same day deliveries of some products.
Before stepping into the same-day delivery, businesses should gauge the demand by conducting surveys with customers and support staff. Apart from forecasting their customers’ demand, it is necessary to know where they are located.
Regular auditing of the supply chain and delivery performance
Before executing same-day delivery plans, it is necessary for businesses to carry out a supply chain audit. They should monitor their supply chain operations to get a clear and detailed picture on their shortcomings. This helps them keep their supply chains resilient and minimizes supply chain inefficiencies.
A delivery logistics software provides a detailed performance of the past delivery performance and metrics. In same-day deliveries, businesses should monitor their On-Time In-Full delivery scores and keep a detailed track of their delivery delays. This helps them identify and rectify issues that plague the same-day delivery operations and make them more efficient.
Finding an efficient distribution model
After making a detailed audit of their supply chain and delivery performance, businesses should find the distribution model that suits their same-day delivery needs.
Traditional same-day delivery models lack flexibility when an urgent last-minute order comes. Hub and spoke distribution model is the best for implementing same-day delivery. It is excellent in terms of getting recurring product shipments and is effective to manage returns.
Hub and spoke distribution model requires cross docking facilities and a combination of major distribution centers near customers location. It requires a decentralized distribution network model rather than a centralized warehouse model.
With asset heavy solutions, hub and spoke network models are great at logistics. But as efficiencies are gained, this model conflicts with the new same-day delivery demands, speed and visibility for different items.
Crowdsourcing is another distribution model to implement same-day delivery successfully. This model helps businesses to tap into resources and make just in-time deliveries. It is an asset-light logistics model that helps retailers to meet the fluctuating needs of their customers with more efficient delivery.
Selecting a proper delivery method
Delivery component is the most important in same-day delivery. Businesses should decide whether they should execute same-day delivery in-house or outsource it to a 3PL company (third-party logistics companies). Companies that want same-day delivery success without hefty upfront investment and long-term commitment opt to partner with 3PL companies.
Companies that want to attain flexibility and scalability with minimal resources and cost constraints can go with some crowdsourced delivery partners. Crowdsourced delivery partners help many retail businesses to expand their delivery zones and flexibly meet volumes of customer demand with less operational costs.
Small retail businesses that want to serve their hyperlocal customers in a very limited area prefer in-house fulfillment of same-day delivery. Hiring 3PL companies can be too expensive for retail businesses that do not have a lot of customers. They will look for ways to partner with some startups that specialize in delivery services to cover their needs locally.
The delivery zone presence, cost requirements, number of customers served, sustainability, proximity, investments, and flexibility determines whether a business opts for in-housing or outsourcing their same-day delivery operations.
Be transparent in providing delivery cut-off times
Cut off time is the latest time by which the orders placed by the customers are processed for the same-day delivery. This makes it convenient for the businesses to effectively manage the time slots of customers without burdening their workforce.
For instance: A business that works from 9.00 am to 7.00 pm receives orders for same-day delivery till 5:00 pm. Customers who try to place their orders beyond this cut-off time of 5:00 pm will not get their orders delivered on the same-day. But their orders will be moved to the next-day for delivery and their time slots for delivery will also be fulfilled.
In order to be successful in the same day delivery, businesses should be transparent with their cut-off times, blackout dates and days for dispatch. If the store is closed on some particular days, this has to be mentioned on the checkout page too. This transparency adds value and builds credibility in customers over the business.
Batch multiple orders during allocation
Allocation of delivery tasks is the most crucial step to execute same-day delivery successfully. Consolidating and picking up items at the same time for multiple customers adds to efficiency than a one-to-one. Beyond efficiency, this form of batching multiple orders helps to cut down the costs on the number of trips.
Batching multiple orders during allocation ensures that businesses don’t ship low volumes of merchandise multiple times a day.
Create new order alerts and notifications
Alerts and notifications help businesses check the on-ground status of their deliveries on a given day. It quickly and automatically communicates the order issues like vehicle downtime, idling or other delivery delays. These alerts help management to internally keep a track of crucial delivery metrics that impact their same-day delivery performances.
A proper real-time tracking software in the form of an app is the best tool for the businesses undertaking same-day deliveries. Its instant alerts and easy sharing of delivery reports make it easier for logistics managers to optimize their fleet performance. It enables them to manage high volume delivery tasks without burdening their fleet drivers.
Regular testing of site
Whether it is a retailer or a logistics company undertaking same-day deliveries, they have to check the workability of their website or app. Frequent testing of the website for load time, misspellings, updated product listings, or glitches on the checkout page is necessary. This helps them avoid the frustration of customers leading to exit their services.
Utilize Rightly skilled drivers
Skilled drivers and trained field professionals are necessary to handle the same-day delivery complexities. Each member in the delivery team should know each step of same-day delivery and amount of time taken to complete it. Adequate training is required to educate drivers on the protocols to be followed during the same-day delivery.
In case, a retailer or other brands are teaming up with third-party delivery companies, they should ensure that staff members are well acquainted with the courier services.
Explore ways to simplify fulfillment
It is necessary for businesses involved in the same-day delivery to streamline their fulfillment process based on what they did in the past.
Logistics managers and store managers should discuss with the entire fulfillment team about the process and timing of orders. Also, they should chart plans to get their orders from stores or warehouses based on the customers preferred delivery window, including driver availability and drop-off points.
Making quick and effective communication to customers
Today, customers need quick and effective communication on the status of their order till they are delivered. They need the updated status of their orders and entire tracking information of its status. It is necessary to send direct messages to customers on orders like “We have shipped your order from the store ABC”. etc
A proper delivery logistics software sends delivery notifications to customers through messages. Beyond sending tracking links and messages, what differentiates a good brand from a usual brand in same-day delivery is the customized and personalized communications. The customers must be given a anytime chat, email and call option to know about offers and their order status.
Cost- effective and optimal route plans
Customers expect consistent on-time deliveries when businesses are set to make same-day deliveries. The most essential key to be successful in same-day deliveries is route planning.
A good dynamic route planning software generates optimal routes for drivers after factoring in numerous delivery constraints like delivery windows, traffic etc. It reduces significant time and distance travelled by a driver between the number of stops. It quickly accommodates ad-hoc delivery requests and automatically reoptimizes routes within seconds, making it easier to manage last-minute order requests.
Effective order allocation
Effective assignment of delivery tasks is the key to same-day delivery success from the managerial side of a logistics business. With limited skilled drivers, it has become crucial to allocate same-day delivery tasks to the right drivers.
A delivery logistics software enables warehouse managers to prepare delivery schedules based on driver skill sets, scheduled breaks, driver availability, vehicle capacity, vehicle health status, and delivery windows. It helps them place highly skilled drivers for high priority orders without disturbing their scheduled break times.
Businesses that once depended on local customers have been pushed to explore same-day delivery to retain their loyal customers locally. The interest in same-day delivery is expected to increase for small sized retail businesses who majorly depend on local customers. We will witness businesses racing to implement eco-friendly same-day deliveries with minimal manpower in the near future.
Same-day delivery requires businesses to work with financial, logistics and human resource challenges. A business tool like Locus Delivery logistics software makes efforts of businesses in delivery operations worthy. It helps them attain on-time order fulfillment with the right delivery agents. Also, it ensures that resources and assets are optimally utilized without burdening them.