Delivery Matters Most: How E-Commerce Retailers Can Craft Superior Customer Experiences In Last-Mile Delivery

We’re speaking with Kushal Nahata, CEO and co-founder of FarEye, a last-mile delivery platform that helps companies optimize their last-mile deliveries and provide superior customer experiences. We’ll discuss the complex last-mile, how to simplify it, make it efficient to reduce costs while increasing customer loyalty.

Worldwide e-commerce sales are expected to hit $6 trillion by 2023. With this continued online shopping growth, consumers are demanding shorter delivery time frames. As companies face this surge in demand for deliveries, they must also consider their bottom-line costs.

Gary Drenik: Is last-mile delivery important to consumers?

Kushal Nahata: Last-mile delivery has become so important that 85% of shoppers won’t shop with a retailer again after a bad delivery experience. Consumers want fast deliveries along with delivery tracking and ETA alerts. They want to know their packages are in route and when they will arrive and not delivering those experiences will not bode well for retailers. Both consumers and retailers want a smooth and seamless post-purchase experience.

Drenik: What do consumers expect and demand with deliveries?

Nahata: Amazon has set the bar for consumers with their extensive, low-cost last-mile delivery options. In the past few years, consumers have gotten used to choosing when and where they receive their goods. More importantly, they expect every company to deliver their goods either same-day or within two days and sometimes for free, regardless of the size of the company.

Consumers, especially Gen-Z and Millennials, who now make up the largest share of buying power in the U.S., are focused on convenience in their busy lives. According to a recent Prosper Insights & Analytics survey, these two groups are the most likely to choose home delivery methods for their groceries.

Gen-Z (22.4%) and Millennials (25.2%) want their groceries delivered in one or two days.

Both groups of consumers rank same day delivery as Very Important/Important to them with Gen-Z at 52.8% and Millennials at 57.5%. Gen-Z and Millennials also find free shipping Very Important/Important at 74.3% and 80.4% respectively.

Not surprisingly, according to the Prosper Insights & Analytics survey, Gen-Z (39.2%) and Millennials (33.9%) prefer contactless delivery when making a purchase. Their preferences for convenience and a positive consumer experience can make or break a brand’s reputation. This puts increased pressure on retailers to optimize their last-mile logistics.

However, according to FarEye’s “Eye on Last-mile Delivery Report”, only 23% of U.S. retailers claim they can deliver the same day or the next day, so retailers definitely have room for improvement on speed of delivery.

Drenik: What defines a superior delivery for a retailer, food and grocery or logistics provider?

Nahata: Superior deliveries are defined as low-cost, fast and on-time, flexible and adaptable, visible, and sustainable.

• Low-cost - according to FarEye’s “Eye on Last-mile Delivery Report”, 55% of retailers are focused on reducing cost-per-delivery. The factors that go into cost-per-delivery include fuel, labor, first delivery attempt failures, address location, routing, returns and lost package costs. Reducing any of these factors can lead to a lower cost-per-delivery for a retailer.
• Delivery Speed - It is generally assumed that consumers want the deliveries as fast as possible though it isn’t always cost-effective for retailers to offer same-day delivery. Retailers may not have the partnerships or infrastructure to be able to offer same-day deliveries. FarEye’s “Eye on Last-mile Delivery Report" found that 64% of retailers claim that outsourced delivery networks allow for faster delivery times and 43% of retailers claim that outsourced delivery networks allow for increased capacity.
• Flexibility and Adaptability - Consumers today want customizable deliveries, with the ability to change delivery dates, times and locations. Being able to accommodate these wishes is challenging for retailers. They must have the technology to be able to make on-the-fly changes to last-mile deliveries.
• Visibility - Last-mile delivery technology provides visibility, allowing logistics managers to know where a product is in the last mile with the ability to intercede if exceptions crop up. Visibility also helps a company see if they have enough carriers to make a delivery or return when requested. Visibility for consumers lets them track where their packages are and change delivery times and dates if needed.
• Sustainability - Parcel deliveries are estimated to increase by 78% globally by 2030, resulting in up to 30% greater emissions. Retailers have to deliver more quickly than ever while worrying about reducing carbon emissions. They must make the last mile more sustainable through route optimization and making their delivery fleets greener. Optimizing deliveries through efficient routes can mean driving less miles while also incorporating returns pickups into delivery routes reduces miles driven and allows a higher amount of first-delivery attempts. Validating shipping addresses and allowing consumers to indicate special delivery instructions helps increase first delivery success.

Drenik: Why is last-mile delivery so complex?

Nahata: As e-commerce grows, retailers diversify and outsource their delivery networks, partnering with couriers, gig-fleets and postal services to enhance service for their customers. Outsourcing allows retailers to be more flexible, increase their capacity and scalability while also allowing for speedier deliveries.

Outsourcing deliveries helps retailers fulfill their customer’s demands, but it makes last-mile delivery complex and it means retailers have to hand over control of the customer experience to their delivery partners.

Drenik: Can retailers solve simultaneously for reducing last-mile delivery costs while pleasing consumers?

Nahata: Yes, with the use of a last-mile delivery platform retailers can decrease cost-per-delivery while also providing a superior customer experience. Today’s technology tackles a variety of complex problems through the use of artificial intelligence, machine learning and automation that integrates easily with existing processes. Simplifying the last mile and making it cost-effective while also keeping an eye towards a superior customer experience is key.

Drenik: Can you tell me about FarEye and its role in last-mile delivery?

Nahata: FarEye is a last-mile delivery platform that helps companies in retail, e-commerce, logistics and CEP companies, and food & grocery to simplify the complex last-mile delivery process. Our platform provides optimized routes, real-time visibility to managers and customers and branded customer experiences for companies using our technology.

Drenik: Is there anything else you’d like to add?

Nahata: With the right delivery platform, companies can ensure every delivery in the world reaches its destination every time, on-time, accurately, efficiently and with minimal environmental impact.

Drenik: Thanks Kushal for your insights on last-mile delivery technology and how it can help retailers reduce cost-per-delivery while also helping provide superior customer delivery experiences.