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Last Mile Delivery & Why it Matters

Posted on April 29, 2021
by Emma Burgess

Last mile delivery & why it matters

Throughout 2020 and into the second quarter of this year, it’s been difficult to ignore the global dependency that has fallen upon the internet, and with it, eCommerce. What started as a necessity, has become a source of convenience, set to ingrain, and influence future behaviours as consumers venture towards a near-total reliance on online purchases. Figures show that since the pandemic began, 46% of UK consumers purchased a product online that they had previously only ever bought in store. Meanwhile, mobile eCommerce sales soared 169.1%. This surge in demand for purchasing goods electronically puts extra pressure on supply chains to streamline their services, especially when it comes to the last mile.

What do we mean by last mile?

‘Last mile’ is the term used in supply chain management to define the final leg of the fulfilment journey. It describes the movement of people and goods from a transportation hub or warehouse, to its final destination.

Why is last mile so important?

Once an order has left the warehouse and is in the hands of the last mile carrier, the final leg of the journey is taking place. This trip to the products’ destination is the most vital in safeguarding customer satisfaction and ensuring customer loyalty. Thanks to the Covid effect, the pressure on ensuring rapid delivery times can make or break whether a shopper buys from your business, and with so many options of where to shop, it’s vital to ensure your offering meets consumer expectations. New research from logistics provider, UPS highlights how the pandemic has moulded customer’s desires for that last mile. A retailer’s choice of delivery partner is the top deciding factor for 85% of consumers, with 41% saying this will be a key driver in future purchases.  

Tracking

In today’s world, it’s hard to find a product that doesn’t have a like-for-like alternative elsewhere. AAlthough a specifically branded item might be what originally drove the customer online, they can also shop around to decide where to purchase the item based on other considerations, such as price discounts, the courier service being offered, and the ability to track your order. To compete, businesses and last-mile carrier services must ensure they’re providing real-time information that meets the requests of their consumers. Such as:

The cost of last mile delivery

With the growing need to align delivery options with customer expectations, businesses are increasingly looking to create innovative technology and drive improvements. This last stage in the fulfilment journey is the most crucial but it does come with a price. With last-mile costs amounting to 40-50% of the supply chain process, businesses that offer free shipping are having to front these fees themselves. While Huboo-conducted research shows that just 14% of people expect products to show up within 48 hours, while the majority of online shoppers are perfectly content with delivery times of two to three days – so long as they don’t have to pay the costs of delivery.

 Back in Q1 our very own Martin Bysh gave his tips on how to enhance profitability in that final mile.  

Consider how you ship. Is there some measure of exclusivity in your product? Can it be commoditised? If possible, build free economical shipping and lastlycustomise shipping per platform.

Martin Bysh CEO of Huboo 

Read more on why Martin thinks retailers should take a more strategic approach to avoid a race to the bottom. The last mile is the most vital cog in the wheel that is the fulfilment process, it’s where the consumer meets their product. They might have waited five days, or less than 24 hours. The service they receive in this time frame is directly reflective of the businesses they’ve chosen to purchase from. Streamlining your last-mile service is crucial to refining and ensuring eCommerce success.  

If you’re looking for a trusted and competitive fulfilment provider, Huboo is an award-winning outsourced fulfilment provider based in the UK and mainland Europe. You can view their services here to find out more!

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