During the last few years we have seen how e-commerce has grown at an accelerated pace. Consumer digitization, driven by the pandemic, has changed shopping patterns by empowering the online channel.
With the rise of e-commerce, the customer experience during last-mile distribution becomes a differentiating effect when consumers make their purchasing decision.
In other words, we expect the purchasing process on websites to be simple, that the products we are looking for are in stock and that our order arrives at the agreed time.
Our customer experience culminates when we have the products in our hands in a compliant manner. This is why it is so important for retail companies to have a distribution process that meets the required standards.
But how can retail companies achieve a high-level customer experience in the distribution process and do it efficiently?
The first thing to do is to define the strategy that our distribution process will follow. The market trend in Chile [1] is to move towards next day delivery or even same day delivery.
next day
(next day) or even same day ( same day).
However, according to studies presented in the MIT Sloan Review [2], customers consider other variables, such as a The smaller time window and the ability to choose the day on which the product will arrive. So, building customer loyalty in the retail world involves getting to know your customers and understanding what they are looking for.
How do we know what our customers are looking for?
Nowadays, it is possible to collect a great deal of information from purchases. Therefore, it is important to obtain, manage and analyze them.
By understanding what attributes are valued by customers, it will be possible to analyze whether the customer is looking for delivery accuracy, faster delivery or lower cost of delivery. Once we know which are the main preferred attributes, we will be able to define the last mile delivery strategy, with the objective of generating better experiences for our customers.
One of the benefits of knowing these attributes is that contracts made with logistics suppliers can be defined according to customer preferences (contract conditions aligned with strategy).
On the other hand, in case consumers are looking for precision rather than immediacy, the delivery date can be managed in order to reduce demand variability, ensuring the efficiency of operational resources.
At Duxpartners and as consultants specialized in logistics and Supply Chain, we have helped our clients to understand the preferred delivery behavior of their customers, in order to design a distribution model aligned with their real needs. Whether the end customer is looking for same day or am/pm delivery or greater accuracy, we have developed the operation formats to meet those expectations.
As an example, we have supported different companies in the fashion and technology retail world with the management of last mile distribution, to achieve deliveries in 24 to 48 hours and helping them to achieve between 20 to 25% savings on last mile cost. This will be achieved through improvements in route zoning, routing process, fleet sizing and profiling, carrier incentive model and contract negotiation.