Consumers have become more vocal and eagerly share bad experiences when it comes to home delivery. The last mile is an important part of retail’s brand loyalty and logistics companies have a crucial role to play. We spoke to Andrew Tavener, Head of Fleet Marketing EMEA, Descartes Systems Group, about how the last mile has changed, what retailers and logistics providers can do to improve efficiency and see more happy consumers and more. Descartes is joining us on the 28th November in London for our Last Mile & E-Com Networking & Roundtable Event. Don’t miss it! Get your ticket now!
Andrew, how has the last mile transformed in your opinion over the last couple of years?
The growth in ecommerce and appetite for home delivery due to the pandemic highlighted the importance of last-mile. Giving consumers choice in home delivery (with associated costs) so that they can decide what is convenient for them at a price they are prepared to pay has a positive impact on buyer behaviour. The last mile is also recognised as a big contributor to cost and customer experience. Minimising cost and providing a positive customer experience will drive loyalty and profitable future sales. Descartes’ Home Delivery Consumer Sentiment Study 2023 revealed that 67% of consumers experienced a problem with a home delivery in a 3-month period and 68% took some form of action against the retailer or delivery company. For the consumer the last mile is the final word and that experience (good or bad) will dictate how they interact with the retailer in the future.
2. What are the most significant changes and how are companies adapting?
Driver shortages, rising costs (fuel and staffing), increased consumer demand and higher customer expectations are all challenges that companies need to adapt to survive and thrive. Companies are now looking at how technology can help in all of these areas. For example Route Optimisation software is able to maximise delivery density, increasing capacity by up to 35% without adding drivers or vehicles. This reduces the cost per delivery and helps to mitigate driver shortages. Customer expectations also need to be managed and this is where real-time customer notifications on the status and estimated time of delivery are essential. Even when deliveries don’t go to schedule due to some unforeseen circumstance, keeping customers informed can ensure that customers’ satisfaction is maintained.
3. The last mile is often what consumers see and brands are keen to make the experience seamless and green. Do they succeed?
In the summer of 2023 Descartes conducted research with Sapio on 8000 consumers in nine countries in Europe and two in North America on their expectations when it comes to sustainability and home delivery. These seem to be at odds, yet both are fully embedded in behaviour of most consumers and increasing in importance. The research revealed that 59% of consumers are willing to act if they are not satisfied with retailers’ sustainability efforts. There is a silver lining, as 60% of consumers are quite or very interested in green home delivery services – many of which are lower cost than traditional delivery alternatives – and are willing to buy more from retailers who are noted for their green credentials. Sustainability is not a challenge, it’s an opportunity.
4. What advice can you give brands in this regard?
With all the challenges in last mile it can be difficult to see the way ahead. But the challenges present big opportunities for companies and investment in technology such as route optimisation software will go a long way to help them overcome them and increase profitability by reducing costs and growing sales. Now is the time to look at what solutions are available and engage with companies such as Descartes that have a proven track record of making a difference in last mile logistics operations. For companies that have old legacy routing solutions, things have moved on and your planners are probably spending far more time than they need to planning and there are more compelling benefits from advanced route optimisation solutions today. They will be missing out on significant opportunities to reduce costs and improve the customer experience, delivering goods when customers want them, rather than just the next day or week.