Last-Mile Delivery Takes Center Stage for Retailers and Brands

With one- and two-day delivery now the norm, Amazon.com has set a high bar for retailers to keep up with consumers’ demand for fast, free shipping and increased control over the delivery experience. These expectations are only heightened during the holiday season, which accounted for 35 percent of all negative feedback in 2018, according to Convey retail customer data.

Cost and Convenience Are Top of Mind

New Convey survey data from 1,500 consumers confirms that delivery has taken a leading role in the online customer experience, with a whopping 98 percent of respondents confirming that shipping impacts brand loyalty. And the stakes are only getting higher.

To keep up with demanding customers, brands have gotten better at creating more positive, personalized delivery experiences. In fact, the percentage of customers who say retailers are improving their last-mile game rose from 41.5 percent in 2017 to 55.7 percent in 2018, a 34 percent increase.

At the same time, the cost of a failed delivery experience is rising. This year’s survey revealed 83.5 percent of consumers are unlikely to shop with a brand again after a poor experience, a 33.8 percent increase from 2017.

When it comes to selecting delivery options, 61.8 percent of shoppers say cost is still the most important factor. Convenience is also an increasing priority, with 59 percent more shoppers citing same-day delivery as their most critical decision factor over last year. Meanwhile, expectations for self-service shipping changes and proactive responses to issues are also on the rise.

Large-Item Deliveries Introduce New Complexities

Interestingly, large-item shipping has seen a recent spike in popularity, with e-commerce sales of furniture and home furnishings growing 18.2 percent last year according to eMarketer, more than any other retail category. While buying a mattress or refrigerator online has never been easier, the cost and complexity of delivering the order is another issue altogether.

According to survey data, 38 percent of large-item delivery issues are due to appointment scheduling problems, with most consumers needing to reschedule a large-item delivery window at least 20 percent of the time. Customers no longer have the patience or time to sit around the house all day waiting for a delivery. In fact, 45.1 percent of shoppers expect a two-hour window or less.

Today, three out of 10 large-item shipments require multiple contact attempts to schedule, and 28 percent of those attempts still fail. This costs an average 4.6 additional days of an item sitting in a warehouse (and not with a customer), and a minimum $69 in added expense for the retailer.

Simply tracking a package is no longer enough. Retailers and brands that want to thrive in this want-it-now era cannot leave the critical last mile to chance. Success depends on proactively managing the customer delivery experience to ensure more positive delivery outcomes. Those at the top of their game are investing to make that happen now through seamless integration of people, processes and tools across their supply chain and customer service operations.

Kirsten Newbold-Knipp is vice president and chief marketing officer at Convey, Inc., a supply chain management solution.