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How Last-Mile is Adapting to Challenges in Ecommerce

How Last-Mile is Adapting to Challenges in Ecommerce

During 2020, consumers moved to online shopping platforms with a preference for home delivery for both essential and non-essential items. According to Digital Commerce, 360, worldwide consumers spent $861 billion on online shopping in 2020, a 44% growth over the prior year. 1 As consumers begin to return to brick and mortar retail, they expect a new experience that brings both the digital and physical experience together. The following are just a few consumer needs and preferences that retailers are competing to meet and satisfy.

·       Home delivery preferred. Home delivery is preferred by 66% of global consumers, with 18% opting for in-store pickup and 16% for curbside pickup.2

·       Speed and convenience. Over 70% of consumers say speed, convenience, helpful employees and friendly service matter most. Surprisingly, 54% of U.S. consumers say customer experience at most companies needs improvement.3

·       Negative experience defined. Negative experiences, like out of stocks, product availability, extended shipping time, are critical to purchasing decisions and are considered bad shopping experiences by 33% of consumers.2

·       Last-mile delivery. Over 84% of shoppers are unlikely to buy from a company again after a bad last-mile delivery experience, and 98.1% of consumers say delivery is essential for brand loyalty.3

·       One chance. Customers don't give you many chances to get it right. Nearly one out of three customers (32%), said they would leave a brand they love after just one bad experience. Taking it a step further, it takes 12 positive experiences to repair damage caused by one negative one. And that same consumer will tell an average of 9 people about a good brand experience but will tell 16 others about a bad experience.4

Last-mile delivery is at a tipping point. It accounts for 53% of the total shipping cost.5 As eCommerce continues to grow, last-mile delivery is being pushed to limits with challenges like limited public space, traffic congestion, shorter delivery windows and road safety. With just a few clicks, a consumer is given a day and time for home delivery. For last-mile delivery, the last-click begins a symphonic production consisting of countless digital algorithms, resources, and people to deliver on consumer expectations to have the parcel delivered to their doorstep. This is where online customer loyalty is won or lost. 

If only the last mile delivery were as simple as the consumer's last click. More than 61% of logistics companies agree that last-mile delivery is the most inefficient process in the supply chain.6 The following are just a few of the critical challenges facing retailers regarding last-mile delivery:7

·       Visibility. Consumers expect real-time visibility over their orders. They want to see where the diver is at any given time and exactly when they will deliver their parcel.

·       Delivery Costs. Customers expect deliveries to be free of extra charges. In fact, 55% of consumers say they will abandon their online shopping cards if presented with extra costs.8 Last-mile delivery is expensive when you consider routing, failed deliveries, extra stops in the delivery route, driver salaries, and fleet operations.

·       Late deliveries. Consumers expect the delivery when it was promised. Delivery delays can cost brands their reputation, loss of customers and return business.

·       Outdated technology. Half of the T&L companies (49%)5 say their technology used for last-mile delivery is outdated and believe they have and will continue to lose customers because they cannot expand and effectively respond to challenges in the current climate.

·       Poor route planning and optimization. Route planning and optimization have everything to do with on-time delivery, efficiency, and delivery costs to a minimum.

·       Lower efficiency levels. Efficiency relates to both customers and costs and increasing last-mile fulfillment capacity. This includes making sure that your maximizing people, workflows, processes, loads, routes and more. Do you have a dispatcher manually planning routes, or do you have software? Do you have trucks with partial loads coming back and forth to the warehouse, or do you have maximized loads? Do you have people efficiently working across multiple workflows such as picking, packing, and shipping? Are you spending more money hiring more drivers and resources to deal with extra capacity? 

Last-Mile Delivery Requires A Mobile-First Strategy

To meet and resolve the ever-growing challenges associated with last-mile delivery, over 80% of T&L companies agree they need a solid and transparent mobile-first strategy.6 A mobile-first strategy is defined as viewing mobile devices (e.g., smartphones, tablets) and task-specific apps as the foundation for getting work done. Neglecting the last-mile delivery impacts T&L companies in the customer experience, supply chain management and the ability to acquire new revenue streams.

More than 58% of those who had a mobile-first strategy said it effectively reduced their operational costs.6 The mobile-first strategy helps provide better, more responsive customer experiences, increased speed, minimize costs, real-time decision-making, and transparency between the customer and the delivery channel.

A mobile-first strategy for last-mile delivery comes down to understanding what problems you are trying to fix, what opportunities you want to go after, and the most urgently need?  Answers to these and many more questions mean businesses can manage, track, and monitor their delivery operations anytime, anywhere, with real-time visibility to optimize the movement of goods from the first mile to the last mile, improve operations performance in real-time, and deliver a customer-centric experience.

Software platforms for a mobile-first strategy. Honeywell has partnered with FarEye, an intelligent delivery management platform. Honeywell's partnership with FarEye provides a single delivery management solution powered by Honeywell mobile computers and FarEye's intelligent delivery management platform. The partnership empowers enterprises to have complete visibility of goods while transitioning from the plant right through to the final destination with seamless integration with all available data sources. FarEye platform optimizes logistics through:

·       Real-time visibility.  Provide real-time visibility to all stakeholders, enabling data-driven predictive decisions and providing superior customer service for successful first-time deliveries.

·       Driver orchestration. Leverage a broader delivery ecosystem to increase coverage, drive efficiency and fulfill variable demand. Seamlessly onboard, manage and allocate jobs to partners and crowdsource drivers.

·       Intelligent carrier selection. Make better-informed carrier selection decisions to accomplish deliveries at contracted prices and make the best use of all the carrier options you have with data.

·       Real-time customer scheduling. Empower your customers to schedule deliveries at their convenience and orchestrate deliveries based on the capacity to deliver a superior, state-of-the-art customer experience.

·       Predictive management. Enable proactive cost controls and service enhancement with event alerts and notifications to trigger action to ensure service level agreements (SLAs) are met. User customizable Workflow Engine to assign task and receiver input to drive operations and make informed decisions.

Purpose-built devices for mobile-first strategy. Technology can be leveraged as an enabler to improve performance in real-time and deliver an improved customer experience while driving process improvement through device usage, analytics and reporting. According to Gartner, 70% of the new mobile endpoint investments will be for the frontline worker over the next few years. 8 These workers typically represent the "heart" or face of the organization to customers, such as a warehouse worker, a delivery driver or a retail associate. These workers manage large amounts of information, report status and problems, access organizational knowledge and interact with colleagues. Let's take a closer look at what some of these features mean in real-time performance deliverables to help the last-mile delivery.

·       Honeywell CT60 Mobile Computer. Honeywell has seen rapid adoption of contactless proof of deliveries. This new workflow has been adopted by many courier and logistics companies. Honeywell CT60 Mobile Computers are designed for delivery drivers that require real-time connectivity to business-critical applications. At every doorstep/location, the CT60 mobile computer enables the driver to scan the items and verify delivery with photos or SMS, which can be sent to the customer as proof-of-delivery. The CT60's sound recorder application can also capture the customer's voice as a signature instead of requiring them to touch the device, resulting in a contactless delivery. The CT60 scan engine reads barcodes that are damaged or poorly printed at non-traditional fulfillment centers with ease, ensuring that packages that would not have been delivered reach their destination.

The CT60 is part of the Honeywell Mobility Edge family of devices that offers an integrated, repeatable, scalable approach to workflow automation based on a standard hardware and software platform.

·       Mobility Edge Platform. Honeywell mobile computers are based on the Mobility Edge platform. Honeywell Mobility Edge is a leader in Android version support, providing the best available security, features, and lifecycle duration of any ruggedized device in the world. Honeywell is deeply committed to the longevity and quality of the Mobility Edge platform.

Last-mile service providers can deploy Honeywell's ruggedized mobile computers, which can be pre-loaded with the track-and-trace software. Users of the devices can scan product labels, access tracking information and document the movement of goods at every stage. The following products are built on the Mobility Edge platform: Honeywell CT40, CT40XP, CT60, CT60XP, CN80, CN80G, CK65, RT10A, and Thor™ VM1A, and VM3A.

·       Honeywell Smart Talk for T&L Communications. Honeywell Smart Talk is a true voice-enabled unified workforce communications application for Transportation & Logistics environment that tackles the problem of fragmented communications. You receive enterprise-grade security for voice calling, text and media messaging, and user presence.  Smart Talk can be added to Honeywell CT60 Mobile Computer or to most types of mobile devices workers already carry. Device-enabled employees are always connected and can access critical information from company headquarters and operational dispatch while out on the road making deliveries. You enable smarter communications for the entire team from a single mobile device. One device to manage and maintain. One device replacing the need to support and buy consumer mobile phones.

·       Honeywell's Operational Intelligence. Operational Intelligence is a centralized, cloud-based platform to manage the complete lifecycle, operational visibility and performance information of assets, people and tasks. It bridges the productivity gap commonly missed by asset management or mobile device management solutions. The software platform enables workers and enterprises to predict upcoming problems before they happen and gain critical business insights. The software now has a Smart Actions feature, alerting workers on how to resolve and address business issues – be it hardware issues or ensuring social distancing guidelines are being met – when they happen. Honeywell Operational Intelligence is the sum of what our customers told us they needed for a robust solution to manage their mobile device fleet's operational lifecycle's productivity.

Conclusion

Honeywell Productivity Solutions and Services develops and deploys an innovative range of solutions, software and services that help keep people healthy, workers and workplaces safer and more productive, and supply chains and assets more efficient, accurate and reliable. For more information, visit sps.honeywell.com or Contact a Honeywell Solutions Expert today! Call 1-800-934-3163.

 

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1 A decade in review: Ecommerce sales vs. retail sales 2007‑2020

2 Anatomy of Change

3 Last Mile Delivery: What Shoppers Want

4Experience is everything: Here's how to get it right

5 What Is Last Mile Delivery? Costs & How to Optimize

6 Last-Mile Delivery is the Most Inefficient Process for More Than Half of North American Transportation & Logistics Companies

7 Seven Last-Mile Delivery Challenges, and How to Solve Them

8Source: Gartner, Critical Capabilities for Industrial IoT Platforms, 2020, Alfonso Velosa, Eric Goodness, Ted Friedman, Emil Berthelsen, Peter Havart-Simkin, Katell Thielemann, Scot Kim., Published 26 October 2020.

9Customer Experience Is The Future Of Marketing

Barry J. Ewell
SPS BLOG EDITOR

Barry J. Ewell is a Senior Content Marketing Communications Specialist for Honeywell Safety and Productivity Solutions. He has been researching and writing on supply chain topics since 1991.