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Long before the current crisis emerged, companies in both the business-to-consumer (B2C) and business-to-business (B2B) sectors were trying to figure out how to close the gap between their operations and final delivery stops. For most, that meant finding a means of getting shipments from a final distribution center to a customer’s doorstep or commercial operation—a gap more commonly known as the “last mile.”
Last mile logistics were slowly being honed and improved when the pandemic hit and sent customers online in droves. Rather than visiting retail locations, more B2C customers began buying online and having the goods delivered. And, instead of shopping in showrooms or buying in person from a local distributor, B2B buyers were using vendor websites to procure their goods.
This activity drove e-commerce sales to new heights in 2020, having posted an average overall growth rate of 27.6% for the year. For 2021, B2B online sales are expected to reach $1.2 trillion dollars (up from $889 billion in 2017) and B2C is on track to exceed $5.7 trillion by 2027 (up from $3.2 trillion in 2019).
These huge jumps in online sales presented opportunities and challenges for shippers, many of which weren’t quite ready to accommodate the pandemic-driven shifts in buyer behaviors.
“Traditional supply chain management is being turned on its head by consumer demands for more options, and increased expectations around the last mile delivery experience,” one logistics software provider points out. “The biggest change is that e-commerce has become an increasingly more valuable arena for brands and the logistics providers who deliver for them.”
Keeping Up With the E-commerce Time Machine
Thanks to COVID-19, ecommerce was thrown into a time machine and sent about 5-10 years into the future (depending on whom you ask). Last mile logistics hurled into the future right along with e-commerce, which became a primary selling channel for many organizations in 2020.
“Spurred on by rising consumer expectations for speed, cost, and convenience, major players in the industry are setting new expectations for fulfillment speed, cost, and convenience that competitors have to keep up with, or risk getting swallowed in the massive e-commerce sea,” the software provider notes. “Last mile delivery costs can be prohibitive and shipping companies are struggling to keep up with record-breaking demand.”
To accommodate these changes, shippers began putting more time, effort, and investment into closing last mile gaps in their supply chains, improving visibility in those networks, and shoring up their transportation networks. Here are four steps that all companies can take to achieve these and other last mile-centric goals:
- Focus on creating a great experience for your customers. Keep those customers at the center of your last-mile logistics planning. Ensure that your online store’s ordering system is easy to use and customers can quickly find the right products. “To achieve the right balance, segment SKUs based on what you think customers will buy versus trying to put too much out there and risking the high costs of inventory duplication,” Inbound Logistics
- Experiment with same-day fulfillment. You can use system-based, accurate inventory levels by location; inventory positioned close to buyers; or customized fulfillment that focuses on expedited delivery. Inbound Logistics also tells shippers to consider using a delivery platform with options that ensure the right product arrives at the right place and at precisely the right minute. “If you can’t achieve same-day fulfillment,” it adds, “offer a different version, such as same-day shipping for orders placed before a cut-off time, or pickup of an online order at a retail location.”
- Leverage technology. Use a transportation management system (TMS) in your fulfillment process to provide insight into the most economical shipping mode, offer product tracking capabilities, and help meet customer service expectations, including same-day and next-day shipping, the publication adds. “…arm yourself with a system that continually re-optimizes routes and schedules as per the transport schedules whenever there is the arrival of new order delivery,” Medium “The system must consider account delivery areas, resources, and existing delivery schedules and then analyze and evaluate the best possible delivery time for new orders in the specified time frame.”
- Give your customers voice and choice. To provide 100% customer satisfaction and increase success rates, let them choose their delivery windows, delivery dates, and times. “Allowing customers to edit the location and, date and time until the date of the delivery ensures customer convenience and builds brand loyalty,” Medium points out. “Reaching at customers’ doorsteps with the package in the mentioned time frame works well for the success of your business.”
“While a post-COVID-19 world is expected to recover more slowly than it did after the 2008–2009 global financial crisis, e-commerce is the economic sweet spot as brands and consumers rush online,” Shopify predicts. “Nearly 150 million people shopped online for the first time in the pandemic, and the number of e-commerce buyers will only continue to rise.” Based on these predictions, smart shippers will continue to hone their last mile logistics strategies in a way that accommodates current customer needs while also preparing for future shifts.
Donna Lambert, Global Account Director Retail Fashion Division, DB Schenker said, “With the long-term predictions around e-commerce growth and customer behaviors in flux as a result of the ongoing pandemic, the overall consensus is that things aren’t going back to the “way they were” anytime soon. And, a high percentage of shoppers that moved online are likely to stay there at least for the foreseeable future. So, speak to your logistics expert to plan your last mile.”
