This post concludes our two-part article on the aspects of e-commerce logistics. Today we continue to study the delivery issues from the point of view of the end-customer and the impact it creates for e-retailers and logistics providers.
Last week we dwelled on the importance of low shipping price and simple returns policy, now we will look at other crucial issues: when and where a customer gets his online purchase.
In the highly competitive market of e-commerce two-day delivery has become a norm, and it creates an enormous challenge for retailers.
There are however different types of demands concerning last-mile delivery. Sometimes customers are ready to pay more to get their parcels the next day after the purchase or even the same day. Others prefer to wait longer but get the advantage of free delivery.
But what the majority wants is to stay informed. This means first of all that consumers want to see a clearly-state delivery date when they make a purchase. Besides, there can be some additional ways of being informed, for example via an e-mail (“your shipment just left our facility”) or via a dedicated section on the retailer’s or provider’s website (where customers can track shipments in real time).
Speaking about tracking solutions, GEODIS provides a secure web portal called e-space which enables to manage the shipment from preparation to proof of delivery. End customers can schedule their delivery and stay informed at each stage of the delivery process.
It should be underlined that customers do not only want fast delivery, but delivery at a precise date, maybe even at precise time of the day. So it is up to retailers to provide a wide variety of options.
Probably our readers already know that some giant e-retailers offer yearly or monthly paid subscriptions that provide faster delivery (the next day, the same day or even in several hours after the purchase). Thus, customers have a choice to pay once a year, and have free rapid delivery during all this period, no matter how many purchases they make.
What can retailers and 3PLs do to improve the delivery time limit?
First of all, increasing the number of warehouses and distribution centers and placing them strategically. Some global 3PL providers like GEODIS, offer analysis on finding the optimal location, or a barycenter, for a warehouse or distribution center. It helps to limit the travel distance, lower transport costs and, of course, minimize the delivery time. The choice of location is not only about the geographical position; numerous factors have to be taken into account:
- Distribution issues: desired delivery time limit and transportation costs (may vary according to geographical area),
- The cost of transport from supplier (that is often lower that the distribution costs thanks to bigger quantities),
- The cost of renting or buying surface for a warehouse,
- Expenses on running a warehouse (labor cost, equipment, software systems, etc.),
- Stock volume.
It is well known that e-retailers often have issues due to season peaks (holidays etc.). To cope with this challenge there is a trend to use predictive analytics. It consists in extracting information from existing data sets to predict the approximate number of future orders. According to these predictions, the staff working shifts can be scheduled in a more productive way and the orders can be treated fast. Flexible shift patterns enable to meet variable demand through the week. During season peaks, there may be a need for off-shifts, night shifts and weekend shifts, as well as a need for seasonal employees. Seasonality also could be managed through support from other sites of the 3PL partner.
Striving for shorter shipment time, retailers and logistics providers are working on new technologies. Innovations in this area can go very far, for example using self-driving cars or drones for delivery. The day it becomes reality will change the delivery time significantly, knowing that robots can work 24 hours a day, 7 days a week.
Customers want to have various options concerning destination point of delivery. It could be home, but also they can prefer to pick up their purchase at a store, or at a carrier’s pick up location, or have it delivered at a workplace, a friend’s or family-member’s place.
Shoppers also expect retailers to give them more control of delivery (ex. shipment tracking, possibility to redirect the parcel to another destination point, possibility to set the delivery time for the shipment).
All these demands encourage implementing omni-channel supply chain so that inventory is available for all the channels (stores, web, catalogue, mobile, concessions).
When it comes to customer’s experience, it is not only about the product itself, but also about when and how the customer gets his purchase. There is no doubt that the quality of the delivery service is one of the major decision-making factors for online shoppers. Retailers would better be sure that the customer is satisfied with the service implemented as much as with the product itself.