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The holiday season may only come around once a year, but the annual habit of gift-giving and package sending remains a huge challenge for distribution networks. While time has always been a critical factor for posts and other logistics companies, it is often the last-mile that defines both the customer and the delivery experience during the last few weeks of the calendar.
Material Handling and Logistics Magazine cited a recently released industry report that said around 91.3 percent of customers consider the last-mile delivery experience to be a crucial part of the digital shopping and shipping process. E-commerce still only accounts for less than 11 percent of all retail purchases, but the number of people who buy online is increasing – 25 percent of all shoppers bought 50 percent of items online in 2019, a year-on-year increase of 50.2 percent. This year, 94.9 percent of people plan to shop online during the holiday season.
The report, which was based on a survey of over 2,550 shoppers about the importance of delivery in their purchasing decisions, said that customer expectations had “skyrocketed” in the last 12 months, with speed of delivery and shipping costs cited as key factors. Unsurprisingly, companies that offered free options for delivery and potential returns were deemed to be the preferred choice for customers; 80 percent of shoppers said it was important to have free two-day shipping and 67 percent wanted free return shipping.
These figures are likely to remain fairly consistent for 10 months of the year, but they take on an added significance when November and December arrive. When you also consider that eCommerce companies have become adept at shipping boxes that often have no relationship to the items contained within – it’s a safe bet that all of us have received at least one package that is filled with a combination of bubble wrap and air plus a small product – and it becomes clear that the last-mile challenge is a puzzle in need of a solution.
As a result of our increased online purchasing decisions, established distribution and logistics networks such as posts are coming under pressure to deliver goods in a timely fashion. Amazon, which has an eCommerce market share of just under 50 percent in the United States alone, is spending a fortune on last-mile delivery technology and there is a consensus that people have been “trained” by the company to expect that a high-quality delivery experience is achievable every time.
Irrespective of the high bar that Amazon has set for eCommerce, the simple truth is that there are sometimes during the year when last-mile delivery becomes more important. The holiday season is one of those times. And while the number of letters may increase – Christmas cards, for example – it is parcel delivery that becomes more of a concern to consumers and, by association, postal networks.
Thanks to the oft-cited Amazon effect, the logistics and distribution sector will be braced for not only an increase in physical delivery options but also end-user requirements for a positive shipping experience. The challenge of last-mile delivery is one that has plagued the industry for years, especially as the last-mile is not a literal interpretation of how far a parcel must travel from a distribution center to a person’s home.
Factor into the mix that there has been a rise in what can be called “porch pirates” – malicious actors who steal delivered packages from doorsteps – and the pain points for posts are not limited to the speed of delivery.
In fact, theft was deemed to be the second-highest problem for customers, with more than 21 percent of respondents to the aforementioned survey anxious that their packages would be stolen after delivery. Late delivery itself was the number one concern (38.6 percent), but these two defined issues are likely to be the reason why 66 percent of survey respondents said that the option to track packages through the distribution process was an important part of the experience itself.
There is no doubt that the stakes are high for the entire distribution and logistics sector throughout the calendar year, but the holiday season is the time when customer demands go through the roof. As a result, there is a need for delivery networks to raise their game.
A full 98.3 percent of survey respondents said they wanted a notification if a holiday season delivery was going to be late – a year-on-year rise of 11.5 percent from 2018 – and only one in 10 said that they would visit a tracking page to discover where their package was.
This latter metric is extremely telling, and (once again) puts pressure on the delivery network to make sure that it communicates potential problems or delivery roadblocks with customers wherever possible. In addition, the last mile is often the least efficient element in terms of eventual delivery and is the most likely to be affected by problems that may (or may not) be within the control of the distribution network itself.
Speed is such an important part of the last-mile delivery process that it can define both consumer trust and brand reputation. Only seven percent of people said that the shipping date was immaterial, but 72.7 percent of respondents said that they would not buy from a brand again if the delivery experience was poor.
Naturally, the brand is often reliant on its internal and external delivery ecosystem to get packages to customers in a reasonable time frame, albeit that the last-mile is often the most challenging part of the puzzle. As we have noted above, the holiday season puts that challenge firmly in the spotlight. The question that posts need to answer as the end of the year approaches is whether they are up for an annual challenge that appears with the tedious inevitability of an unloved season. And, if not, why not?