The e-commerce business has shown a remarkable growth over the past years. But, at the same time, it has also been going through quite a few challenges related to sourcing, warehousing, and distribution. With growing popularity and increased technological innovations, expectations of customers are also on the rise. Customers expect to receive their orders at the earliest and more so they are also looking at same-day delivery and real-time tracking of their order. While addressing these expectations, e-commerce businesses also need to take care of the most challenging bit of the whole order journey i.e. the last mile delivery – the last leg of order fulfilment indicating movement of goods from the fulfilment centre (hub) to the customer. Often, this stage becomes the potential determiner of customer satisfaction and locks in loyal customers.
All e-commerce businesses, supply chain, and logistics companies understand the complexities of last-mile delivery and also understand that it isn’t an easy problem to solve. It has been found that the last leg of order fulfilment involves around 30% of the total logistics cost. Here are the four challenges of last mile delivery for e-commerce:
I. Poor infrastructure:
Growing popularity of e-commerce business and the convenience of receiving the order at the doorstep have increased the customer base not just within the city limits but also in the suburbs and remote areas. But, catering to such a huge customer base through the city’s jam-packed roads or long journeys to reach remote areas, in addition to poor road infrastructure in developing countries add to the woe of delivery pilots. The time spent and fuel expenses hugely impact the finances of the e-commerce business.
II. Order units per customer and fragile products:
Most often, the number of packages delivered per customer is one. And driving around city roads or covering long distances to fulfil single unit deliveries undoubtedly ups the fuel cost. In addition, some orders of customers may fall under fragile categories like perishable, breakable, toxic or flammable – requiring careful handling during delivery. This adds to the challenge of the delivery pilot in particular and the e-commerce company on the whole.
III. Delivery instructions:
Sometimes customers will provide special instructions for how their order should be delivered such as ‘don’t deliver before 8 a.m.’, ‘leave it with the neighbour’ etc. In such cases, there should be an open platform for the customer and delivery pilot to communicate directly. This requires technology that can enable e-commerce business to regularly update customers about their order status along with details of the delivery staff. The absence of this element in the last-mile delivery process may lead to friction and loss in customer loyalty too.
IV. Customer-related factors:
This probably is one of the most unpredictable challenges of all. Factors like incorrect address, unavailability of the recipient at the time of delivery, parking problems, the likelihood of return or change in mind where the customer no longer wants the product and many such issues have a negative repercussion on cost and time.
Well, though there is no straightforward solution to these challenges, e-commerce businesses can only cope and optimise their last leg of order fulfilment process by harnessing the potential of innovative and evolving technology.