Last Mile Technology
Last mile logistics is constantly changing as e-commerce businesses are looking to improve their service offerings to customers. Last mile solutions are becoming cheaper and more consumer-friendly, driven by data and user experience.
The last mile is the transport leg closest to the consumer. This means it’s ripe for opportunities to win over the customer—or to lose their loyalty entirely. Businesses are constantly looking to optimize the last mile to increase customer service and engagement. Today’s customer expects fast, cheap delivery, which means businesses have to find new means of streamlining operations for consumer experience.
Last mile technology has proven successful in building this customer experience. Tech solutions are creating serious innovations and reinventions in the last mile of transportation. The last mile is often the most expensive part of the transportation process, but technology has been shown to decrease costs and increase efficiencies—while improving customer service.
If done well, the last mile can be a competitive differentiator that improves customer loyalty and drives sales. Technology is the key to enhancing the last mile.
How can you go the extra mile in the last mile?
Tech In Last Mile & Ecommerce
According to the MetaPack 2016 State of Ecommerce Delivery Consumer report, 38% of consumers would stop purchasing from a retailer if they experience a negative delivery.
Moreover, 45% of customers will abandon a basket online if the business doesn’t have satisfactory delivery options, and 61% of customers will choose one online retailer over another because of delivery options.
The delivery of goods is equally as important as the product or brand itself.
E-commerce businesses today need both price and speed in order to compete. This means you need to find means of streamlining operations in the last mile to ensure customers can quickly get products for a low cost. This is especially important as more and more businesses are offering a range of delivery options, including same-day deliveries.
In fact, Home Depot even invested nearly $300 million in supply chain tech and improvements to enable same-day shipping and delivery.
Your entire supply chain has to support your last mile strategy if you want to see success. Planning for transportation has to start with the last mile. Understanding what you need to do to make the last mile efficient can influence how you approach the rest of your supply chain.
For example, a company might choose to house their products in multiple warehouses across the state if they want a last mile strategy that focuses on speed. Or a company may have a central hub for warehousing so they can focus on cutting costs for the consumer.
The last mile is the customer mile. As an e-commerce business, your transport service is the face of your brand. The drivers are the ones interacting with your customer in the last leg of the purchasing process. It’s critical that this be a positive ending customer experience.
Last mile technology streamlines operations in order to both reduce costs and enhance customer experience.
What kinds of last mile technology are transporters using to streamline and improve last mile deliveries?
Blockchain technology has improved data accuracy and enabled more precise tracking processes in the transport industry. Blockchain technology has proven one of the strongest means of customer relationship management. Users have better visibility to the delivery timeline as well as in-depth information about the product and business.
Blockchain allows the supply chain partners to better interact with one another. This also allows customers to have a more accurate estimate of the package’s arrival.
Customers are demanding on-time deliveries with accurate ETA of delivery. As data collection and sharing becomes more transparent with blockchain, customers will have greater access to package information.
Cloud solutions and SaaS (software-as-a-service) technologies create a network of local carriers. A single solution provider can organize thousands of trucks and packages on the same network. These online networks are able to better organize trucks, track metrics, and reduce costs.
Network-based platforms are proving especially useful for the reverse logistics process.
These platforms also enable real-time changes to deliveries. For example, 46% of consumers want to be able to make changes to their delivery after placing an order. With network-based platforms, different hubs and partners can quickly interact as customers make changes to their order.
Contact LTX Solutions to see how we use network-based technologies with our clients.
There are an increasing number of delivery crowdsourcing apps, like UberRUSH, Postmates, Deliv, and Amazon Flex. These apps alert independent drivers when nearby deliveries are available. This uses the growing gig-economy to reduce costs and minimize route management.
Right now, though, there is a limited geographic reach for crowdsourcing apps. There are still some liability and privacy concerns as well, which is preventing crowdsourcing deliveries from becoming mainstream. Some proper regulation processes may make this more commonplace in the future, though.
Drones, robots, and self-driving cars are quickly moving into the transportation industry. The highest cost of delivery is labor, which accounts for nearly 60% of the cost. Robotic deliveries are likely to be faster and less expensive.
The future is here—and robots are quickly going to take over the last mile. McKinsey believes that autonomous vehicles and drones will deliver 78% of items in the future, with traditional delivery accounting for only 20% and bike carriers 2%.
Amazon has especially begun to implement drone technology for last mile legs in rural areas. Yelp Eat24 is also testing robots in San Francisco with human accompaniment.
Testing is underway, but these technologies are not commonplace just yet. These types of solution are going to be highly regulated, especially in urban areas. We’ll be watching regulations and trends to see how these robotic technologies grow in the market.
Shipment starts with packing and picking. Improving the fulfillment process at hubs will allow for enhanced last-mile logistics, especially for local deliveries. This means building a strong distribution network that’s connected with cloud-based technology solutions.
This also means implementing technologies within the warehouse, like RFID and scanning processes, in order to quickly find and prep items for shipment.
Robots are making their way into warehouses as well. Robots are able to scan for products, take them from the shelves, and prepare them for shipment. As autonomous picking becomes commonplace, the distribution will enrich the origination of last mile logistics.
Some companies are even making apps that alert drivers when customers are available to accept and sign for deliveries. If a customer is not home, the driver can see if a neighbor or other collection point is available. This reduces the number of “we missed you letters” while giving additional peace of mind to customers who don’t want packages left on doorsteps with the potential of damage or theft.
For example, a customer may get a notification that says: “It’s raining and you’re out of the house. Shall we leave your parcel with your neighbor Doug at house number 27?”
The customer can then approve or deny. Some customers find this invasive, so these technologies may take a new approach or function an optional offering for customer service.
Nevertheless, these kinds of technology prove that delivering packages is becoming an integral part of the customer’s everyday life.
The Bottom Line
Right now, local delivery services are fragmented with a loss of transparency and lack of streamlined operations.
E-commerce business wants to improve this customer experience to offer faster and better delivery to their customers.
With technology, customers can make changes last minute, have updated information about deliveries, and more control over their packages. This improves customer service while streamlining the last mile process for cost reduction.
“It’s never crowded along the extra mile.” – Wayne Dyer
The best way to utilize last mile technology is to hire a 3PL with industry knowledge.
LTX Solutions is constantly updating our technology to offer the best solutions to our customers.
Contact us now to optimize your customer transport with last mile technology.