Naughty or Nice? Getting Last-Mile Delivery Right for the Holidays

‘Tis the season to start thinking about your last-mile deliveries for the holidays. While the end-of-year cheer and festivities might seem like they're still far off, it’s never too early to strategize the best course of action for your business’ last-mile holiday deliveries.

What is Last-Mile Delivery?

Also referred to as final-mile delivery or final-mile logistics, last-mile delivery is the last phase of the delivery process. Typically, last-mile logistics begins with the transportation of products from a distribution center or warehouse and ends with delivering the item to the customer’s doorstep. Having a highly efficient last-mile delivery system in place is a necessity. It's particularly important during the holidays. Especially now.

Online Shopping at an All-Time High

According to industry research, consumers spent a whopping $861.12 billion with online merchants in the United States in 2020. Due to lockdowns, strict curfews, and working from home, the COVID-19 pandemic forced people to spend more time in their homes than usual. This led to an increase in home renovation projects (new or old), online retail therapy, online grocery shopping, and much more. Hearing a knock on the door and seeing a shiny new item at your doorstep was not only convenient, it was exciting, especially when all you’ve seen for the past few months was the inside of your house.

Therefore, U.S. online spending jumped an insane amount — approximately 44 percent — making 2020 the highest annual e-commerce growth in nearly two decades. In fact, 21.3 percent of total 2020 retail sales occurred online. With such an increase in e-commerce spending, it’s safe to say that retailers need to have a game plan for the upcoming 2021 holiday season.

Although many stores have since reopened, consumers have grown accustomed to this new era of online shopping and doorstep deliveries. From here on out, consumers will expect the fast turnarounds and quick-to-respond customer service as a new normal. According to one study, 59 percent of consumers will purchase more frequently from businesses that provide fast, convenient and transparent deliveries. While this influx of shopping is great for both businesses and consumers, the heightened expectation of seamless last-mile deliveries, especially during the holidays, brings about a host of challenges for retail businesses.

Holiday Challenges for Last-Mile Deliveries

Even before the pandemic, the holiday season added an amplified level of pressure on retailers. It’s all too common for customers to scramble for last-minute shopping (both in-store and online) with expectations that their flurry of presents arrives with enough time for them to wrap and gift these items for holiday gatherings.

This expectation hasn’t changed, even with the 44 percent increase in e-commerce shopping. This means even more added pressure for business owners to deliver (no pun intended) excellent service and timely results.

On top of these expectations, the holiday season can also bring about surging parcel fees and struggling capacity. With too many deliveries and too few drivers, the pressure on shipping and logistics companies is at a breaking point as they continuously operate beyond their normal capacity in a chaotic season and clogged supply chain. To meet customer delivery demands and ensure they continue to generate revenue, traditional parcel carriers like FedEx and UPS will increase shipping fees during the busy holiday season. Carriers may also be forced to scale back and accept fewer packages, leaving smaller retail partners scrambling to find a solution and further exacerbating growing shipping delays.

To combat these pressures, there are a few tips retailers can utilize to set themselves up for smooth last-mile holiday deliveries.

Analyze Your Historical Data

If you don’t know your history, you’re bound to repeat it. It’s vitally important for retailers to take a look at their historical data. Analyzing your customers’ shopping habits — and accounting for a shopping increase in 2021 — is key to planning ahead for the holiday season. Implement progressive routing and scheduling resources that can help you prepare for changes in demand throughout the end-of-year holiday shopping. These tools can help you determine the benefits of adding additional vehicles as well as let you know what resources and manpower you must have in place to fulfill large increases in online orders.

Put Reverse Logistics Into Place

With so many online orders being placed, merchants should also prepare for an upsurge in returns. Regardless of the reasoning for wanting to return a product (e.g., the product is damaged, the product doesn't, the customer simply changed their mind), a defined reverse logistics plan is needed in every scenario. In reverse logistics, a product goes backwards — or in "reverse" — through the supply chain. A solid reverse logistics plan should have fluid methods in place (such as vehicles, return policies, third-party partnerships) to account for any product retrievals, disposals or repairs.

Offer White-Glove Services

White glove provides superior delivery services. Instead of dropping off a product at the customer’s doorstep, white-glove services can provide consumers with anything from bringing a product in-house, assembling products for the customer, or hauling away and/or disposing of old products. While these services are highly valued at any time of the year, they're especially coveted during the holiday season when consumers are getting rid of the old and receiving the new. In cases where your services exceed customer expectations, your business can potentially improve its reputation and hopefully gain repeat customers.

Provide In-the-Moment Technology

Customers in 2021 have been spoiled. They not only want to know the estimated date of product arrival, but they also want to know when it shipped, where it’s currently at, and what time frame they’ll receive it. To account for the busy holiday season, ensure that your business has top-of-the-line technology for its last-mile deliveries. Whether it’s moment-by-moment delivery updates via text message or fast customer service replies, retailers with advanced technology will always be favored by consumers.

Have the Right Partners

Last-mile logistics, regardless of the holidays, can be time consuming and overwhelming. However, with the right partners to help you through it, you and your business can sail through the holiday season. If you think it’s time to allocate last-mile deliveries, find a trusted third-party partner that can handle the scheduling, manpower, and logistics for your company. With the right last-mile delivery partner in place, you’ll be sure to stay away from the Naughty List and stay at the top of every customer’s Nice List.

Jay Sackos is the vice president of Dolly, a leading on-demand delivery service trusted by retailers like Lowe's, Costco, Crate and Barrel, Big Lots!, and many more.