Your last-mile strategy is integral to your company’s success—and your bottom line. Accounting for more than half of total shipping costs, last-mile delivery is the most expensive and complex leg of the supply chain.
That’s why setting an effective last-mile strategy is key. With the right strategies in place, such as using route optimization software to plan more efficient delivery routes and leveraging automated dispatch tools, you can improve delivery speed and accuracy and boost customer satisfaction, all while minimizing costs.
However, with so many variables in play, many companies make mistakes when setting last-mile strategy. We reached out to a panel of supply chain experts, delivery professionals, and eCommerce retailers to gain some insight into the biggest mistakes companies make when setting last-mile strategy and what you should be doing to avoid them.
In this article:
- What is Last-Mile Strategy?
- Meet Our Panel of Supply Chain Experts, Delivery Professionals & eCommerce Retailers
- The Biggest Mistakes Companies Make When Setting Last-Mile Strategy
- Frequently Asked Questions
What is Last-Mile Strategy?
Last-mile strategy, or last-mile delivery strategy, is all about carefully planning and carrying out the final steps of the delivery process. This involves moving goods from a distribution center or facility to the customer’s doorstep, be it their home or office.
This final phase of the delivery process is incredibly important because it directly impacts how satisfied the customer is with their overall experience. It’s also the most challenging and expensive part of the delivery process, as it involves dealing with things like traffic jams, different distances to cover, and specific customer needs.
Companies employ various tactics and solutions to enhance the last leg of the delivery process, such as:
- Route optimization: Utilizing technology to identify the most efficient routes, thus saving time and reducing transportation expenses.
- Establishing local fulfillment centers or hubs: Establishing multiple distribution points in close proximity to customers to minimize delivery times.
- Providing flexible delivery options: Granting customers choices like same-day delivery, scheduled time slots, or pick-up points to enhance satisfaction.
- Integrating technology: Implementing real-time tracking, automated customer notifications, and mobile applications to improve visibility and communication.
- Collaborating with third-party logistics (3PL): Teaming up with specialized logistics providers to capitalize on their networks and expertise.
- Utilizing crowdsourced delivery: Utilizing a network of independent drivers who use their own vehicles, similar to ride-sharing services, to make deliveries.
- Promoting sustainable practices: Incorporating electric vehicles, bicycles, or walking as eco-friendly alternatives for last-mile delivery, especially in urban areas.
- Testing automated delivery vehicles and drones: Experimenting with autonomous vehicles or drones to automate the delivery process, although these technologies are still in the early stages.
Each company may adopt a combination of these strategies based on their specific requirements, customer expectations, and the nature of their goods.
“What’s the biggest mistake companies make when setting last-mile strategy?”
Meet Our Panel of Supply Chain Experts, Delivery Professionals & eCommerce Retailers:
The Biggest Mistakes Companies Make When Setting Last-Mile Strategy
Keep reading to learn what our panel had to say about the biggest mistakes you might be making when setting last-mile strategy—and how to avoid them.
Dominique B. Dupuis
Dominique B. Dupuis is the business expert & specialist in everything leather, fashion & design for the established company URAD.
“As the CEO of URAD, which does business via eCommerce as well as brick-and-mortar, I can relate that the biggest mistake companies make when setting up last-mile strategy is…”
Failing to deliver products on time. When this happens, customers lose faith in the company and take their business elsewhere.
Even though unexpected difficulties can arise when trying to deliver on quick turnaround times, companies should ensure their customers understand their options—and have plenty of them—when making a purchase or returning or exchanging an item. This is done through omnichannel operations, which integrate all sales outlets and allow customers to order via any digital device as well as on-site.
They also get choices in how to receive their items, whether it’s an in-store pickup or home delivery. Returns and exchanges should have multiple options as well, which make it easy for the customer to try other products instead of shopping elsewhere.
Ben Pu, an eCommerce visionary, founded ShipSage in 2021. With nationwide warehouses and innovative solutions, ShipSage is revolutionizing eCommerce fulfillment. Ben’s expertise and relentless ambition have made ShipSage a transformative leader in the industry.
“One of the most significant mistakes companies make when setting last-mile strategy is…”
Underestimating the complexities of local logistics and not prioritizing customer experience. Many businesses tend to generalize their approach, thinking a one-size-fits-all model will work everywhere.
In our journey with ShipSage, we’ve observed that each region has its own set of challenges, be it traffic patterns, consumer preferences, or local regulations. Companies often miss the mark by not localizing their approach or by cutting corners to save costs, which can result in delayed deliveries and unhappy customers.
Investing in understanding the nuances of the last mile, leveraging technology, and ensuring transparency are pivotal.
Andy LaPointe is the Founder of Traverse Bay Farms.
“Companies can make several mistakes when setting last-mile strategy…”
Here are top three we have experienced and overcame for our gourmet food business:
- Lack of Real-Time Communication: Customers want to know when their packages will arrive. Thanks to improved tracking capabilities at all stages, we have integrated emails, SMS, and real-time tracking directly from our website. In addition, we encourage our customers to contact us whenever they have a question about the status of their packages.
- Ignoring Customer Preferences. Some customers prefer emails, some prefer SMS messages, and some still like to pick up the phone and call to inquire about delivery time and date. We offer every option to our customers.
- Failing to Follow-Up: Even in a perfect world, packages can be delivered late or lost. If a customer calls and inquires about a late or lost package, we have two-person team specifically tasked with following up with our customers to keep them up-to-date on the status of their package and estimated delivery.
We adopt a holistic approach to every stage of the shipping process, understanding that if one link is broken, it not only effects the current order but future orders, too.
Shaunak Amin is the co-founder and CEO of SwagMagic, a global corporate swag platform that allows organizations to create their own branded swag store or send pre-curated swag kits anywhere in the world.
“Last-mile delivery partnerships are the lifeblood of our operations, and I’ve learned…”
That choosing the right partners is paramount, as our customers rely on us to deliver their orders promptly and flawlessly. Collaborating with third-party delivery providers or crowd-sourced services can be a game-changer, but it’s a delicate balance.
It’s not just about the convenience of outsourcing. It’s about finding partners who align with our values, customer-centric approach, and dedication to excellence. Opting for the wrong partner—one who doesn’t share our commitment to quality and timeliness—can lead to nightmares in terms of service disruptions and inconsistent delivery standards.
We’ve invested time and effort in establishing robust relationships with vetted local partners in more than 200 countries who understand our mission. And not only has doing so paid off in terms of customer satisfaction, but it’s also boosted our brand reputation. This is why, for us, nurturing these partnerships is as crucial as the gifts we deliver.
Joe Giranda is the Director of Sales & Marketing for CFR Classic, specializing in international car shipping and relocation.
“One of the most significant errors that companies commit when planning a last-mile delivery strategy is…”
Neglecting the customer experience and focusing solely on operational efficiencies and cost reduction. While these are important aspects, they should not overshadow the customer’s needs and expectations.
Ignoring the crucial aspects of the customer experience in the last-mile strategy can lead to negative consequences. Here’s why:
- Lack of Real-Time Tracking: When companies don’t offer real-time tracking, they miss an opportunity to provide customers with peace of mind. Knowing the status of a delivery is essential for building trust. Failing to offer this feature can lead customers to feel disconnected and anxious, which damages the overall brand experience.
- Poor Communication: Even the best-planned deliveries can face delays. Companies that don’t communicate these changes transparently risk eroding customer trust. Simple notifications about delays or changes in the delivery schedule can go a long way in maintaining a positive relationship with the customer.
- Lasting Impressions: The last-mile delivery is often the only direct interaction a customer has with the company. A bad experience at this stage can undo all the good done during the shopping and ordering process. Dissatisfied customers are not only less likely to make repeat purchases, but they are also more likely to leave negative reviews, which can have a domino effect on customer acquisition.
Justin Soleimani is the Co-Founder of Tumble, a homeware company that creates beautiful, practical, and affordable home furnishings, including a line of machine-washable and spillproof rugs that are sure to bring together any room.
“One of the biggest mistakes in a last-mile strategy is often capacity constraints…”
Having enough delivery drivers, warehouse space issues, etc., are all examples of capacity constraints that can impact on-time delivery. On-time delivery is critical to meeting customer expectations. Always remaining organized in the warehouse and ensuring one has enough staff to meet customer demand is crucial to addressing these constraints.
Dmytro is the CEO and Founder of Solvid, a leading, next-generation digital marketing agency based in London, UK.
“The single biggest last-mile error that I’ve experienced became painfully apparent in the retail boom of 2021…”
This saw demand for products grow significantly without sufficient infrastructure to fulfill all orders in a designated timeframe. This served as an unforgettable lesson in demand management and managing consumer expectations.
If you have a small warehouse and are unable to ensure that your products are reaching the right customers within the right turnaround time, you have a big problem that needs addressing. It’s essential that you continue to monitor your order volumes, your company’s reputation, and purchase intent.
If you’re seeing higher demand than what your last-mile infrastructure can handle, you must take immediate action. Look to third-party logistics providers to help outsource your warehousing, or adopt a crowd-sourced delivery platform to cope better with demand.
If you’re facing a moment in time where your business can either scale or scale back its operations, you should always look to make the most of the momentum you build.
Eric Jones is the CEO of Couture Candy, a 15-year-old special occasion fashion eCommerce business.
“Companies’ most common mistake while executing their last-mile strategy is…”
Underestimating the importance of efficient logistics and delivery. Many businesses primarily focus on product development, marketing, and online presence but overlook the critical role of the last-mile delivery process in customer satisfaction and overall success.
As CEO of an eCommerce business, one should prioritize last-mile logistics as a core strategy to avoid this mistake. This includes optimizing delivery routes, investing in tracking and communication technology, and partnering with reliable providers. Neglecting this can lead to delayed deliveries, damaged goods, and dissatisfied customers, ultimately harming the company’s reputation and growth potential.
In today’s competitive eCommerce landscape, a well-executed last-mile strategy can be a significant differentiator and a key driver of customer loyalty.
David Anaya is the co-founder and sales director of Serviap Logistics, which provides warehouse setup, refits and relocation services, including supplying and installing the likes of racking, signage, and floor taping. Having started out in Mexico in 2021, Serviap Logistics has expanded into Brazil and the United States and counts some of the biggest companies in the world among its clients, covering the likes of the eCommerce, automotive, and distribution industries.
“As a leader of a company for logistics solutions, I believe some of the biggest errors committed are…”
- Choosing cheaper technology over efficiency: Many managers want to save money in initial investments but don’t realize that a cost-efficient balance needs to be achieved. Collaborating with setup consultants can bring great solutions.
- Ignoring location: Last-mile plans need to be tailored to specific geographical areas, products, and populations. Companies that operate under a one-size-fits-all approach may face difficulties in navigating the challenges of different regions.
- Neglecting wider issues: When you sacrifice the health of staff and streamlined processes only in the name of faster delivery, this will eventually clog operations, and the last-mile stage will gradually become a problem.
Michael Klein, the Founder & CEO of Herbaly, brings a rich tapestry of experience to his role, thanks to growing up in a family-owned manufacturing business. From warehouse planning to product design, he’s seen it all, honing a multidisciplinary approach inspired by his three older siblings.
“Hire a third-party delivery service with competitive employee training…”
The delivery of goods is often the most sensitive leg of the journey—when your products can get damaged, and customers look out their window to see their fragile packages being thrown in front of the door. Seeking a top-tier third-party delivery service will improve customer satisfaction and save you money in the long run, even if it’s more expensive in the short term.
Cheryl is a blogger at TeamReedblog.
“The biggest mistake companies make when setting last-mile strategy is…”
Not taking a properly forward-looking or holistic approach. Automation is the key here, whether that’s for an urban or rural setting.
Companies need to start building automation into their processes because consumers increasingly expect same-day delivery. If you’re not Amazon, you’re probably already behind in being able to deliver on this.
Bringing automation into the equation will also help with more accurate delivery. It’s also time for eCommerce companies to begin exploring partnerships with organizations that offer security for that last inch of the last mile.
Smart mailboxes are coming. Smart retailers will be ready to showcase how they’re ready to use them.
Jesús Zabala is the Founder & Designer of Jewelry Lab. Jewelry Lab is a handmade jewelry design and production studio that aims to empower and inspire others to live their best selves to embark on the journey of adventure, freedom, and magic.
“The biggest mistake companies make when setting the last mile strategy is…”
Not optimizing their delivery vehicles’ routes. It is very important for you to have good route planning so that you can cut down your delivery time.
For that, you can also use software that can schedule your routes, and it will recommend the most efficient routes by analyzing all the factors like location, vehicle capacity, traffic and, most importantly, time.
It is very important to have updates on traffic because it can affect the timeline of your delivery. So it is very important to use dynamic routing for your delivery vehicle routes.
As the CEO of AB&M Logistics, Walter is a seasoned executive with a distinguished track record in the logistics sector. His extensive experience encompasses roles such as the President of The Expedite Association of North America and active involvement in numerous other trade organizations.
“The biggest issue we see at AB&M Logistics is that the customer has become an afterthought in last-mile delivery…”
YouTube is having a field day with videos of packages earning frequent flyer miles. Many companies mess up their last-mile delivery plans because they don’t think enough about the customer’s wants.
They often care more about saving money and being efficient than making sure customers are happy. This can lead to late deliveries, bad communication, and a lack of transparency.
To do better, companies that utilize last-mile logistics should focus on what customers really want. They should give accurate delivery time estimates, let their customers choose how they want things delivered, and keep them updated every step of the way. It’s crucial to be open and clear about where orders are.
Additionally, businesses should explore value-added services, such as expedited delivery, to further enrich the last-mile experience. By investing time and resources in tailoring strategies to meet customer needs, companies can avoid costly errors and deliver an exceptional last-mile experience that distinguishes them in the market.
Jake Munday is the quintessential entrepreneur, busying himself with successful business endeavors since before he left school. An entrepreneurial visionary Jake is adept at identifying and monetizing opportunities. Jake is the CEO and Co-Founder of Custom Neon.
“The biggest mistake companies often make when setting last-mile delivery strategy is…”
Underestimating the importance of the customer experience in this final stage of the purchasing journey.
Businesses, of course, place a lot of emphasis on the logistical and operational aspects of their product delivery—ensuring that products get from point A to point B efficiently—but they often fail to keep the customer in the loop and this is where issues can arise.
At Custom Neon, we believe that the delivery experience should be an extension of the premium service we strive to provide at every other touchpoint.
Customers’ expectations should be managed. Of course, there are environmental and circumstantial events that are out of our control. Weather, natural disasters, even strikes, but what we can control is how we update our customers every step of the way.
We communicate their tracking details, delivery date, and expected delivery times on the day of delivery.
The customer knows exactly where and when their products will arrive.
Companies that aren’t providing this type of service are making a huge mistake. They are leaving themselves open for negative feedback and reviews surrounding their order fulfillment and delivery times, which will often be for issues outside of their control yet still lead to customers shopping elsewhere.
This tracking also covers you as a business. I once had a customer reach out to say that a sign hadn’t been received, but we also got access to the tracking and could see that it was delivered, and an employee signed for it, and left it in storage but forgot to notify someone before they went on leave!
Having the employee’s name and signature covered us, and the customer was able to track down their shipment.
These touchpoints all work towards solidifying relations with customers. It demonstrates that you have their best interests at heart, and responding promptly and proactively when issues do arise signals to the customer that their satisfaction is a top priority.
Abhi is the Growth Marketer & Automation Expert at AbhiBavishi.com, specializing in B2B SaaS & no-code development.
“Companies often err in last-mile delivery plans…”
They treat it as an afterthought. This is a mistake. It is a key part of the customer experience.
Businesses focus on product and marketing. The importance of last-mile delivery is overlooked. This is the final step. It puts the product in the customer’s hands.
In eCommerce, last-mile delivery is crucial. It’s not just about logistics. It’s a brand engagement touchpoint. It’s the final interaction with the customer. Any poor experience here can hurt customer satisfaction. It can affect customer loyalty.
Another error is not using technology.
Tools exist to help with last-mile delivery. They can track deliveries in real-time. They can optimize routes. They can aid customer communication. They can manage returns well.
Avoiding these tools can lead to issues. It can lead to higher costs. It can lead to poor customer experience.
Finally, companies often ignore environmental impact. Last-mile delivery operations can harm the environment. Consumers are more environmentally aware now.
Businesses need to consider sustainable deliveries. They could use electric vehicles and optimize routes to lower carbon emissions. Ignoring this can not only harm the environment but also the company’s reputation.
Cort Adair is the CEO and founder of an online wholesale clothing supplier, The Adair Group.
“In the world of eCommerce, the most significant mistake companies often make when crafting their last-mile strategy is…”
Underestimating the importance of real-time visibility and flexibility.
It’s imperative to have robust tracking systems and the ability to adapt swiftly to changing circumstances. Many businesses fail to anticipate unexpected challenges like traffic, weather, or sudden demand spikes, leading to delayed deliveries and dissatisfied customers.
Maintaining a well-coordinated last-mile network demands constant monitoring and the capability to make on-the-fly adjustments to optimize routes and meet customer expectations. In an industry where timely delivery is paramount, overlooking this aspect can be costly.
Autonomous routing and dispatching is not only necessary, but is the future for many last-mile operations. Learn where your last-mile operations are today and make your AD&R plan. https://t.co/s5fAP9Ms4M pic.twitter.com/DK5fLF2Juq
— Wise Systems (@goWiseSystems) April 24, 2023
Eran Mizrahi is the CEO of Ingredient Brothers.
“Unless you are a trained specialist, route planning can frequently be really perplexing and intellectually demanding…”
The fact that it is dependent on a multitude of circumstances, including fuel efficiency and environmental restrictions, is possibly the most frustrating aspect of it. Not only does route optimization have a significant effect on costs, but it also has a direct impact on ETAs (estimated times of arrival).
You have most likely encountered a routing delay on occasion, so you are aware of how frustrating it may be. Due to road construction, the street’s direction has changed. The steady movement of traffic is disrupted by stoplights and other types of signals.
The volume of daily traffic also contributes to an increase in the likelihood of collisions. And various more unforeseen circumstances when driving.
Then there are the clients that live in remote areas. Therefore, in order to fulfill an order, your delivery worker may occasionally need to travel outside the confines of the city.
Jeff had the privilege of leading five entrepreneurial ventures and currently serves as the CEO of Champion Leadership Group LLC, where they specialize in helping businesses optimize their operational strategies.
“Failure to prioritize customer-centricity is a common mistake…”
Many companies prioritize cost-cutting over customer needs. This error can cause inefficient routes, late delivery, and unhappy customers. Businesses should use data and technology to optimize delivery routes, provide real-time tracking, and offer flexible delivery options to improve the customer experience.
Not adapting to market changes is another big mistake. eCommerce evolves with new technologies, customer expectations, and competitive pressures. Without regular last-mile strategy reviews, companies might lag behind.
To be competitive and meet customer requests, companies must be adaptable and receptive to new ideas like autonomous delivery vehicles, micro-fulfillment centers, and sustainable distribution.
Eric Lam is the Founder of Exploding Ideas.
“The biggest mistake companies make when setting last-mile strategy is…”
Not having a community that backs you. Retail brand management is impossible alone. In PR, marketing, IT, and fulfillment, you need a strong community to grow your brand. Successful retail brands have a supportive environment that helps them provide excellent customer service and reach more customers.
Make this part of your retail strategy. Need expert help where? This may require hiring vendors or workers to grow. It’s crucial to your small but mighty product brand’s ambitious goals.
These are the most typical pricing models, while others are hard to identify and make market comparisons difficult. Counterintuitive circumstances develop when sending huge goods from New York to Boston is cheaper than delivering them from a warehouse to a client on the neighboring street.
Alexa Stimpfel works with The Shoe Fairy, where they are dedicated to bringing you the best in high-quality, stylish footwear. Their selection of heels is perfect for all women, from bodybuilders and models to busy moms on the go. They are proud to specialize in clear heels and bikini competition heels, providing you with the ultimate in style and comfort.
“One of the most common mistakes companies make when setting their last-mile delivery strategy is…”
Underestimating the significance of customer expectations and failing to align their strategy with evolving consumer demands. With the growth of eCommerce and the Amazon effect, customers now expect faster, more flexible, and transparent delivery options. Neglecting these expectations can lead to dissatisfied customers and erode brand loyalty.
Another critical mistake is inadequate route optimization and poor logistics management, which can result in inefficiencies, increased costs, and delayed deliveries. Companies must invest in technology and data analytics to optimize routes, track deliveries in real time, and ensure a seamless last-mile experience.
Ultimately, neglecting to prioritize customer-centricity and efficient logistics can significantly hinder a company’s last-mile delivery strategy, impacting both customer satisfaction and the bottom line.
Ben Stewart is the Owner of Rusty Rooster Fabrication & Design, a small family-owned business that handcrafts only the highest quality custom metal art signs in the industry. Additionally, he provides valuable insights into leadership, fabrication process, design, and marketing where he acquired his professional experience for over 15 years.
“One of the biggest mistakes companies make when setting their last-mile strategy is…”
Underestimating the complexity and cost associated with this critical stage of the supply chain. Many businesses fail to account for the intricacies of urban delivery, including congestion, route optimization, and the challenges of delivering to individual homes or small businesses. Overlooking these factors can result in higher costs, delays, and customer dissatisfaction.
Additionally, failing to invest in robust technology and data analytics to optimize last-mile delivery can hinder efficiency. Companies that don’t prioritize customer communication, tracking, and flexibility in delivery options also risk alienating consumers.
A successful last-mile strategy requires careful planning and adaptation to the specific demands of the market, and neglecting these elements can be a costly mistake for businesses.
Jordan is the CEO and owner of ShirtMax, an eCommerce wholesale clothing company operating since 2014.
“The common error when establishing a last-mile strategy is…”
Failing to account for evolving customer expectations and preferences. Neglecting to adapt to these changing needs can be a costly mistake.
Businesses often overlook the significance of investing in advanced tracking and communication systems, which provide customers with real-time updates and the ability to customize delivery times.
Additionally, not optimizing routes for efficiency and ignoring the potential of technology-driven solutions like route optimization algorithms can result in higher costs and longer delivery times. These errors can ultimately impact customer satisfaction and loyalty.
Niall John Lynchehaun
Niall is the owner and director at Midland Stone, a leading supplier of natural stone products with a long-established and trusted reputation within the stone industry for reliability, expertise, and exceptional customer service.
“The most common mistake companies make in this regard is, without a shadow of a doubt…”
The oversight of real-time adaptability.
One of my early ventures faced a pretty serious challenge: I optimized our last-mile strategy based on historical data, thinking that the patterns would persist. However, the dynamics of demand, traffic, and delivery preferences are subject to rapid change, to put it mildly.
The fact that I completely ignored the need for a flexible last-mile approach led to delayed deliveries and, consequently, dissatisfied customers.
And that’s precisely why I highly recommend implementing a last-mile strategy that is genuinely dynamic and incorporates real-time data. Try utilizing technologies like AI and machine learning to analyze the current trends. Adapt to changing circumstances and optimize routes for efficient deliveries.
Benzo Lee is the Founder of Autoboxup. His background in marketing and MBA has made him intimately familiar with both the strategic and operational aspects of the supply chain, including last-mile delivery.
“The biggest mistake companies make when setting last-mile strategy is…”
Ignoring the ‘human element.’ In our early years, our last-mile delivery approach was primarily logistics-driven, focusing on speed and cost-efficiency. While this seemed effective on paper, it overlooked the ‘human element.’
In one quarter, we received 75 customer complaints specifically pointing to delivery issues, such as missed delivery windows and lack of communication. These complaints were not merely numerical; they were accompanied by strong customer feedback that we were dropping the ball at the finish line.
Moreover, these issues led to a 10% decline in repeat purchases from affected customers, which in raw numbers meant a loss of approximately 50 repeat orders that quarter. This was a clear indication that something needed to change.
To remedy this, we launched ‘DeliverEase,’ a customer-centric last-mile delivery program. We poured $50,000 into this program. It included a feature that allowed customers to select delivery time slots and provided real-time tracking via our app.
The first month post-implementation saw a significant drop in delivery-related complaints, down to just 15 complaints from the previous 75. Customer testimonials started coming in, praising our thoughtful approach to delivery. Our Net Promoter Score (NPS) rose from 50 to 62 within a quarter, leading to a revenue increase of $75,000, effectively making the program ROI-positive within three months.
To summarize, last-mile delivery is not just a logistical hurdle but an invaluable touchpoint for enhancing customer experience. At Autoboxup, we’ve turned this challenge into an asset by carefully considering customer feedback, continually refining our strategies, and measuring our success through both numerical and anecdotal evidence.
Sophia Tang is the founder of Nako Cosmetics. As an SEO expert, Sophia has over 20 years of relevant experience in the field of marketing. Their foray into eCommerce has been a journey punctuated with learning curves, especially in the domain of last-mile delivery.
“The vast landscape of logistics often tempts companies to opt for generic solutions, an approach that can sometimes backfire, as we learned firsthand at Nako Cosmetics…”
Our 2018 launch of the AquaLuxe skincare line, a range that boasted natural marine ingredients, was met with anticipation and excitement. However, these products, with their intricate formulations, demanded storage within a temperature band of 18-22°C.
Our initial batches, shipped using our standard logistics channels, faced temperature fluctuations. This lapse resulted in compromised product efficacy.
In tangible numbers, this oversight translated to approximately 1,200 product returns within the first two months post-launch. Customer feedback portals highlighted the issue, and our monthly sales graph for the AquaLuxe range showed a noticeable dip, with a 20% decline in sales.
To rectify this, we partnered with CoolLogix, a logistics provider specializing in temperature-sensitive shipments. In addition, we introduced QR codes on our product packaging, enabling customers to access a detailed temperature log throughout the product’s journey from our warehouse to their doorstep.
This revamped approach led to tangible improvements. Not only did product returns plummet, but the QR code initiative also resonated with our customer base, offering them an unprecedented level of transparency. By the first quarter of 2019, the AquaLuxe range saw a sales uptick, registering a 25% increase compared to the previous quarter.
In retrospect, our experience with the AquaLuxe line underscored a pivotal lesson: the need to tailor logistics strategies to the unique demands of the product. It’s a testament to the fact that in the intricate dance of eCommerce, every step, especially the last mile, counts profoundly.
Matt Furneaux is the Global Director of Loqate. Loqate is the world’s most trusted location intelligence specialist. Their purpose is to help every business in the world reach every customer in the world.
“The biggest mistake companies make when setting last-mile strategy is…”
Ignoring data quality. Fast, timely fulfillment has become a critical battleground in eCommerce, and the last mile often causes the most significant problems.
Complexity for shoppers often begins at the address entry stage. Whether it’s a lapse in concentration, a finger slip on a mobile device, or a missed letter from a ZIP code, it’s not uncommon for customers to accidentally provide incomplete or inaccurate address data.
Despite this, 33% of retailers either don’t verify address data or leave it to the courier.
The solution lies in collecting more accurate data in an easy, frictionless fashion.
Best practice involves the implementation of address validation solutions that allow customers to provide data that is as accurate as possible. The software strips away checkout frustration whilst ensuring the correct delivery address.
Not only does accurate address information play a vital role in last-mile logistics, but it also reduces friction for a better shopping experience and opens the door to customer data analysis that can supercharge acquisition, onboarding, engagement, and retention.
Lily Li is the Customer Service Manager at Suproto, a leading CNC machining service provider based in Guangdong, China.
“The biggest mistake companies make when setting last-mile strategy is…”
Overlooking the human element. In 2018, we encountered a significant challenge when dealing with a crucial client, John, the procurement manager at Johnson Aerospace. Our delivery personnel were overwhelmed, following an impractical schedule with too many stops.
To address this issue, we revamped our last-mile strategy. We simplified schedules, reduced stops, and provided additional support to our delivery teams.
The impact was substantial. John and his team at Johnson Aerospace noticed our improved efficiency, resulting in a higher level of trust and satisfaction.
Customer contentment increased by 20%, leading to a 15% rise in purchase rates. This change boosted customer contentment, increased purchase rates, and reinforced our reputation for reliable last-mile delivery.
Another common mistake is ignoring local insights. In 2019, we expanded our operations into the Shunwei area in Guangdong, a region known for its unique challenges, including traffic congestion and poor road conditions.
To address these challenges effectively, we actively engaged with the Shunwei community. We hired local staff who possessed an intimate understanding of the area’s road conditions, traffic patterns, and delivery challenges.
With our newly formed local team in place, we adjusted our delivery schedules to align with the specific traffic patterns in Shunwei. Moreover, we proactively collaborated with local authorities to improve road conditions and address bottlenecks that had previously hindered efficient last-mile deliveries.
Last-mile performance in the Shunwei region saw significant improvements, with a 40% reduction in delivery delays. This led to a 25% increase in customer contentment, directly correlating with a 35% boost in purchase rates from the Shunwei community.
Amarjeet Barnwal is a Supply Chain Consultant & Founder of EducationDragon.
“The biggest mistake companies make when setting last-mile strategy is…”
They often underestimate the complexity of last-mile delivery. They think it’s just A to B. But it’s more like A to Z with traffic, weather, and customer availability in the mix.
According to a Capgemini study, 53% of organizations face increased costs due to last-mile delivery complexities.
Actionable advice: Don’t go solo; partner with local delivery services. Use real-time tracking and analytics. Train your drivers in customer service. A smile can save a bad day.
Andrei Vasilescu is the Co-Founder & CEO of DontPayFull, and brings extensive expertise in finance, economics, business, and marketing to the table. His leadership has propelled DontPayFull to prominence in the online savings and deals industry. With a focus on innovation and consumer-centric solutions, he serves as a trusted source for insights into financial matters and effective marketing strategies.
“One of the biggest mistakes companies make when setting their last-mile strategy is…”
Underestimating the importance of customer experience. In my experience, businesses often focus solely on the speed and efficiency of delivery, neglecting the overall satisfaction of their customers. However, it is crucial to remember that the last mile is the final touchpoint with the customer, and it can leave a lasting impression.
By prioritizing customer-centricity and ensuring seamless delivery experiences, companies can differentiate themselves and build strong customer relationships. As the saying goes, you never get a second chance to make a first impression.
Therefore, investing in personalized, on-time deliveries and clear communication can ultimately lead to happy, loyal customers who are more likely to repeat purchases and recommend the brand to others.
Tyler is the enthusiastic founder of To the Cloud, your go-to online shop for new and certified used vaporizers and accessories. He is deeply ingrained in the dynamic worlds of the cannabis industry, eCommerce, and consumer electronics.
“As an experienced eCommerce retailer, I’ve observed that one of the most pervasive mistakes companies commit in setting last-mile strategy is…”
Underestimating the value of customer communication. Many firms solely focus on logistics, forgetting that today’s customers demand transparency and real-time updates regarding their deliveries. For example, my company, ToTheCloudVaporStore.com, implemented an enhanced tracking system to keep customers informed, improving customer satisfaction and retention.
Another common error is neglecting to factor in delivery speed. With giants like Amazon setting new standards, consumers anticipate fast delivery times.
In response to this trend, we partnered with reliable last-mile delivery services, offering our clients expedited shipping options at checkout. Businesses must balance cost-efficiency with customer expectations to ensure a positive last-mile delivery experience.
Robert Khachatryan is the CEO and founder of Freight Right Global Logistics. He has expertise in ocean freight visibility, supply chain design, eCommerce shipping, freight marketplaces, and booking automation. With a background in rates and supply chain dynamics, he offers insights into current industry trends and challenges.
“The cardinal error is a lack of real-time visibility and not leveraging technology-driven solutions…”
Here are some key statistics:
- Surprising Costs: The last mile can account for up to 53% of total shipping costs. Yet, inefficiencies caused by not leveraging technology can amplify these expenses by another 10-15%.
- Consumer Expectations: According to a recent study, 88% of consumers are willing to pay for same-day or faster delivery. A disjointed last-mile strategy can hinder a company’s ability to meet these expectations, risking customer loyalty and repeat purchases.
- Return Rates: With eCommerce sales hitting all-time highs, return rates are averaging at around 30%. An ineffective last-mile strategy not only affects deliveries but also complicates and amplifies the cost of returns.
The underpinning issues include:
- Lack of Real-Time Tracking: Without tech-driven solutions, many companies remain unaware of delays, route deviations, or issues until it’s too late. This results in a domino effect—missed delivery windows, increased redelivery attempts, and disgruntled customers.
- Inefficient Route Optimization: Manual route planning is error-prone and often not optimized for current traffic conditions, delivery windows, or real-time contingencies.
- Inadequate Data Analysis: Companies without a tech-backed strategy miss out on invaluable data that can offer insights into customer preferences, frequent pain points, and areas of potential cost-saving.
Freight marketplaces, booking automation, and technology integration are the future of last-mile delivery. By integrating these solutions, businesses can:
- Enhance visibility across the supply chain
- Make real-time adjustments to improve efficiency
- Leverage data analytics to predict and respond to challenges before they escalate
The future of eCommerce and customer satisfaction is intrinsically linked to a company’s last-mile strategy, and it’s high time businesses acknowledge and rectify this critical misstep.
Zarina Bahadur is the CEO and founder of 123 Baby Box, a monthly subscription box for babies aged 1 to 3. Zarina graduated from the University of California Irvine last year and started her company while still in school.
“The biggest mistake I’ve noticed companies make when setting their last-mile strategy is…”
Not putting the customer at the center of their planning. It’s crucial to understand that the last mile is often the most direct interaction a customer has with your business. Failing to prioritize their needs can lead to dissatisfaction and lost business.
Another common error is ignoring the importance of technology and data. With the rise of eCommerce, companies must leverage data and technology to optimize routes, provide real-time tracking, and ensure efficient deliveries. Neglecting this aspect can result in higher operational costs and poor customer experiences.
Additionally, companies often underestimate the complexity of urban logistics. City-specific challenges, such as traffic congestion and varying regulations, must be considered. Failure to do so can lead to delays and compliance issues.
Some companies don’t adapt to changing customer preferences and market dynamics. In the age of on-demand services and environmental concerns, flexibility and sustainability in last-mile strategies are vital. Not adapting to these shifts can put your company at a significant disadvantage.
Wayne Mills is the Head of Operations at Seven Seas Worldwide. As the country’s leading international shipping company, they help over 40,000 people transport personal effects safely, catering to holidaymakers, expats, students, and work travelers.
“Ignoring the influence of infrastructure development and urban planning is one of the most common mistakes made while implementing last-mile strategies…”
Businesses frequently fail to recognize how cities are changing and fail to modify their last-mile strategy accordingly. Traffic patterns, road infrastructure, and even legislation can alter significantly as metropolitan areas expand and develop. Inefficient last-mile techniques can result in longer delivery times, greater prices, and inefficiencies when they are not coordinated with urban planning.
Companies specializing in last-mile logistics must interact with municipal authorities, urban planners, and lawmakers to comprehend and shape the development of transportation infrastructure and laws in ways that are advantageous to their operations. They will have a competitive advantage in negotiating the dynamic urban environment if they accomplish this.
An effective last-mile strategy improves accuracy and efficiency, enabling your company to minimize costs while still delivering exceptional service and maintaining customer satisfaction. The Wise Systems delivery automation platform offers a suite of solutions that support last-mile optimization, from dispatch to route optimization, customer communication, and more.
These tools not only help you optimize your last-mile delivery processes, but they also help to overcome many of the common mistakes companies make when setting last-mile strategy. Request a demo today to learn how Wise Systems can play a vital role in your last-mile strategy.
Frequently Asked Questions
What is the strategy of last-mile delivery?
Last-mile delivery strategy encompasses the processes and systems involved in the last step of of the supply chain, delivering goods to the customer’s home. In this phase of the delivery process, companies carefully plan and carry out the transportation of items from a distribution center to the customer’s doorstep.
To ensure this process is smooth and satisfactory for the customer, companies employ different strategies. These include optimizing delivery routes, integrating technology into the process, and partnering with third-party logistics providers, among others. By doing so, businesses aim to make the last-mile delivery efficient and customer-friendly.
What are the key success factors last-mile delivery?
To ensure successful last-mile delivery, there are several important factors to consider.
- On-time, accurate deliveries: It’s crucial to make deliveries on time and with accuracy. Customers rely on their packages arriving promptly and in good condition.
- Offering a range of delivery options: Offering flexibility and a range of delivery options is essential. Not everyone has the same schedule or preferences, so providing alternatives can enhance customer satisfaction.
- Real-time tracking: Last-mile tracking allows both the customer and the delivery provider to monitor the progress and location of the package, ensuring transparency and peace of mind.
- Effective and clear communication with customers: Providing updates and addressing any concerns or issues promptly can go a long way in establishing trust and a positive customer experience.
- Cost-effectiveness: Finding ways to optimize route planning and investing in a well-trained and reliable delivery workforce can streamline the entire last-mile delivery process, ultimately leading to success.
What is the biggest challenge with last-mile deliveries?
Last-mile deliveries pose a major obstacle when it comes to maintaining efficiency and dependability without inflating costs. Various factors like heavy traffic, distant destinations, and limited customer availability contribute to the lengthy duration and expensive nature of last-mile delivery. Moreover, the customers’ demands for quick and adaptable deliveries further complicate the management of this aspect of the supply chain.
Is last mile delivery expensive?
Yes, last-mile delivery is often regarded as the most expensive phase of the supply chain. This is because it involves a number of intricate tasks, like navigating through residential areas, coping with traffic, and adhering to specific delivery timeframes in order to reach the customer’s doorstep.
To accomplish this, it necessitates substantial resources like manpower and fuel, as well as advanced technology to streamline routes and ensure seamless communication with customers. Because it accounts for more than half of total shipping costs, it’s crucial to focus on optimizing last-mile delivery processes when setting last-mile strategy.