With the rise of e-commerce, consumers expect faster and more convenient delivery options than ever before. If your fulfillment strategy isn't up to par, you could be losing business to competitors who prioritize it.
But don't worry, there's a solution. You can streamline your operations and improve customer satisfaction by leveraging an omnichannel experience platform and implementing strategies to optimize fulfillment and last-mile delivery.
In this article, we'll explore the impact of inefficient fulfillment, the benefits of prioritizing improvements, along with 10 tactics for optimizing your processes. Get ready to revolutionize your retail strategy.
Why prioritize last-mile fulfillment as your top retail strategy?
In today's digital world, loyal customers demand a seamless and hassle-free shopping experience, which includes fast and reliable delivery. In fact, delivery speed and cost are the two most important buying factors for customers.
Prioritizing fulfillment and delivery services to customers can be the key to unlocking a plethora of benefits for your company. Let's take a look at why it's crucial to focus on final-mile delivery.
1. Elevate customer experience
Delivering orders accurately in a way that’s convenient to the customer is essential to customer loyalty. For example, 50% of business leaders agree that customers expect same-day delivery and that it results in better customer retention.
But it’s not just delivery you have to focus on. Customer support surrounding the fulfillment process is also vital to improving the customer journey. Nearly a third of buyers say that poor customer support with deliveries encourages them to switch providers.
2. Solidify brand reputation
By focusing your attention on final-mile customer service, you can boost your reputation. Lost, damaged, and delayed deliveries are the top contributors to poor brand image.
(On the flip side, 82% of shoppers say they share their positive delivery experiences on online customer feedback forums. If you’ve got your final-mile fulfillment sewn up, positive customer reviews can help boost your brand reputation.
3. Reduce business costs through efficiency
By optimizing shipping and logistics, you can boost revenue and lower costs.
For example, using three shipment centers across the US can cut costs by 25%, as goods are shipped from locations closer to customers. This reduces distance on the final-mile leg and saves on fuel.
4. Uplift revenue
If you want more revenue, fulfillment and delivery needs to be at the top of your retail strategy.
Customers will buy more from a company with reliable delivery services and pay higher prices for products with faster delivery.
In contrast, those who shop with companies with poor delivery processes plan to reduce spending by 45%.
5. Predict future trends
Gaining insights into customer purchase behavior can help predict inventory trends to inform product development and marketing tactics.
Using analytics technology, you can get a deeper understanding of which products customers return to, which they need quickly, and which are gaining traction. That way, you know the products to improve, the ones to ditch, and the ones to fill shelves with.
6. Scale operations
The right final-mile delivery strategies make it easier to scale operations.
For example, companies that use third-party logistics providers can leverage their expertise, experience, and equipment to handle increased order volume and customer demand.
7. Increase sustainability
Sustainability is on the tip of everyone’s tongues, so businesses need to get on board. In fact, two-thirds of shoppers say that sustainability is one of the top five factors that affect their purchasing decisions.
There are plenty of ways to dramatically improve sustainability in your final-mile process. For example, optimizing routes and packing methods, switching to greener packaging, and streamlining management can lead to fewer trucks on the road, reducing your carbon footprint.
8. Gain a competitive edge
The right fulfillment strategies can put you above your competitors. For example, 44% of companies say that offering same-day delivery gives them a competitive advantage.
Customers expect fast, reliable, affordable shipping, with multiple delivery options, and good customer service.
Understanding changing customer experience demands through insights and analytics can help you work out which services are most important to your customer base, so you can snatch them away from competitors.
4 major costs of ignoring last-mile in your retail strategy
Fulfillment and delivery play a critical role in the overall customer shopping experience. Ignoring these processes can lead to detrimental costs for your business.
1. Disjointed customer experience
Not only do customers expect fast, affordable, convenient shipping options, 83% expect regular communication about their orders.
If you don’t have streamlined fulfillment processes, you can’t meet these customer expectations.
Instead, you’ll find you experience high customer support traffic as customers complain about:
- Lost, late, or damaged deliveries
- Limited delivery options
- Expensive shipping
- Complex order and returns processes
- Long wait times for support
Not only does this place your support team under enormous pressure, you’ll also lose revenue as customers choose to shop elsewhere.
2. High operational costs
Consider that 40–55% of supply chain costs happen at the last-mile. If you neglect to streamline these operations, you’ll spend a lot of money fixing mistakes and managing customer complaints.
It’s not just inefficient fulfillment processes that drive up overheads. Inaccurate inventory management, inadequate staffing and training, and poor transportation logistics can all increase your costs.
3. Poor brand reputation
Neglecting your fulfillment and delivery strategy can lead to poor brand reputation.
Inconsistent or unreliable delivery times, incorrect deliveries, and poor communication can all hurt your brand image, eroding customer loyalty and repeat business.
4. Loss of competitive edge
It’s not just a poor shopping experience that turns customers away. The wrong delivery strategy will do the same.
For example, customers want affordable (or preferably free) delivery. 61% would switch brands to avoid paying for costly shipping. If your fulfillment processes aren’t efficient and cost-effective, you’ll have to pass those costs on to the customer through delivery charges.
If your competitors are offering free delivery, your customers will buy from them.
How to optimize your last-mile retail strategy
Maximizing your last-mile delivery strategy is key to improving customer satisfaction and reducing costs. Here's how to do it.
1. Create a truly omnichannel strategy
Omnichannel retail strategies drive sales. Brands make 12% more when they add an additional sales channel.
But it’s not enough to offer products on lots of platforms. You need coherent fulfillment options that give buyers the freedom to choose their preferred delivery method from all brick-and-mortar stores and digital channels.
Not only does this improve the retail experience, it also enables you to optimize fulfillment from multiple locations and more efficiently assign delivery vehicles.
Plus, you’ll get real-time visibility into inventory levels across all sales channels in one place. That way you can better predict future buying trends and scale operations without having to switch between platforms.
2. Automate fulfillment processes
51% of businesses say their fulfillment costs have increased, with labor being the biggest factor.
Automating your fulfillment processes can reduce labor demand, speed up processes, and lower overheads.
(There are many ways to automate logistics and fulfillment, such as:
- Automated order processing
- Inventory management automation
- Robotics for picking and packing
- Route optimization
- Customer service bots and automatic notifications
- Predictive analytics
3. Utilize data to enhance processes
Data is invaluable for improving your delivery systems. By analyzing patterns in your fulfillment mechanisms, you can pinpoint what works and what doesn’t.
For example, demand forecasting, inventory tracking, and returns analysis can help identify bottlenecks in your fulfillment processes to reduce waste and lower costs.
To improve the buyer experience, you can analyze customer segmentation data to personalize services and reengineer systems to fit your customer profiles.
4. Personalize post-purchase communication
By automating post-purchase communication and tailoring it based on customer behavior data, you can reduce the workload on your customer service team.
Instead of hiring an army of customer service agents to deal with tiny issues, automated systems can solve simple problems quickly and easily. This means your team can focus on more complex issues.
This significantly improves the customer experience by lowering support wait times and handling issues quickly.
It also makes it easier and cheaper to scale your operations without needing to grow your customer support team.
5. Optimize inventory management
Nearly a quarter of customers agree that problems with product unavailability and slow delivery times have the biggest impact on their shopping experience.
If the products that potential customers demand aren’t available at the right time, they’ll simply go elsewhere. In this respect, optimizing inventory management can have a significant impact on your revenue.
Demand forecasting and inventory management tools can streamline fulfillment for retail businesses by predicting demand and reducing overstocking and understocking. This can ultimately lead to a more efficient pricing strategy, increased customer satisfaction, and improved profitability.
6. Offer multiple fulfillment options
Customers want convenient fulfillment options. Offering multiple ways to receive products, such as BOPA, BOPIS, curbside pickup, same-day delivery, and locker collection is crucial to gain a competitive advantage.
This is especially important if you’re selling across multiple channels. 42% of retailers say that having multiple fulfillment options is the most important aspect of their omnichannel brand strategy.
Multiple fulfillment options provide flexibility and convenience for customers across all platforms. Plus, it means customers can choose a delivery option that suits their budget.
7. Optimize packing
Efficient packing of delivery vehicles reduces costs and improves sustainability.
By optimizing how trucks are loaded, companies can reduce the number of vehicles needed to transport the same amount of goods.
This not only benefits the environment but can also save money. Fewer trucks on the road means lower fuel costs, reduced wear and tear on vehicles, and lower maintenance costs. It’s a win-win for companies and the environment.
8. Partner with third-party logistics providers
57% of businesses already use a third-party provider (3PL) for some or all of their e-commerce fulfillment needs. This is because 3PLs offer dedicated services that can help you scale.
Retail businesses that partner with third-party services and final-mile carriers can leverage their expertise and infrastructure to streamline and scale their logistics and delivery operations.
Plus, 3PLs offer specialist solutions for retailers, such as same-day delivery, big and bulky, refrigerated options, or assembly services. This enables retail stores to meet their customers' unique delivery needs more efficiently.
9. Optimize delivery routes
Route optimization software enables companies to create efficient delivery routes that reduce delivery times by driving fewer miles.
This not only helps improve customer satisfaction but also reduces the number of trucks needed and the distance they need to travel, resulting in lower fuel costs and reduced carbon emissions.
10. Implement real-time tracking
Customers want real-time tracking. If you have an order tracking page, customers are three and a half times more likely to track their orders.
By giving customers a place to track orders, you decrease the burden on your customer service team and reduce missed deliveries.
Leveraging unification for fulfillment efficiency
Omnichannel unification and orchestration can significantly enhance fulfillment efficiency for businesses.
Delivery Solutions' platform is a centralized hub that enables retailers to manage and optimize their “after cart” operations seamlessly. By slotting into the order, warehouse, and transport management tech stack, businesses can streamline their fulfillment from various channels in one place.
Offering a range of analytics and operational tools for post-purchase processes, logistics, delivery, pickup, returns, and more makes it easier to identify bottlenecks and tailor processes to your business model.
Plus, businesses can connect with and manage all 3PL providers on one unified, flexible platform.
On top of that, automated customer communication and real-time tracking enhance customer experience, reducing inquiries and increasing satisfaction.
Enhance your last-mile retail strategy
Implementing a streamlined fulfillment and last-mile delivery strategy should be the top priority for any retail business looking to succeed in today's competitive landscape.
Prioritizing fulfillment operations and utilizing technology solutions like Delivery Solutions platform can reduce costs, improve customer satisfaction, and help you gain a competitive edge.
Don't wait to take action — schedule a demo of our platform today to see how it can transform your retail strategy.
Topics from this blog: Retail Management Efficiency