In today’s era of digital-first business, customers could stray from their favourite brand based on a costly or poor delivery experience. Gone are the days when “fast” and “free” were the golden tickets to a satisfied shopper. Last-mile delivery has evolved to offer enthralling propositions to the customers, but the basics haven’t changed. Read on to see how.
The cost of failed deliveries
Last-mile delivery is the most complex and costly part of the supply chain, accounting for 40-55% of total supply chain cost as per studies conducted by leading consulting houses. On top of that, if the deliverables to the end-customer are lost, damaged, or late, then the cost to the brand begins to rise exponentially. The expense of having to resend packages comes in addition to the cost of call centre operations and on-field complaints, creating an additional operational burden - not to mention, the unsatisfied (and potentially angry) customer that is probably looking at better value propositions from your competitors. And the numbers say it themselves - today, 84% of customers will not return after facing a single, poor delivery experience. While happy customers may stay silent, the unhappy ones, unfortunately, are vocal in their feedback including taking their feedback to social media snowballing into much larger negative brand repercussions!
In sum, the costs of failed delivery are further compounded by significant risks to brand loyalty and reputation. Acquiring a new customer can be three to five times that of retaining an existing customer. This places superior LMD experience at the top of a pressing list of priorities that brands should be addressing today.
On the flip side
However, numbers weigh on the positive side too: as much as 86% of buyers will pay more for products and services for great (or superior) CX, in addition to buying more from those companies. So, what is Superior CX in Last-Mile Delivery? Is it 10 minute, 30 minute, same-day, or express delivery? Is it providing the flexibility to choose the time window? Is it the ability to deliver to any geographic location - that is, home, office, curbside, a spot in the park, or a train station? Is it providing free delivery? Is it giving access to the driver? Is it providing track & trace? Is it all these & more?
Benchmarking superior CX in LMD
While customers’ expectations of last-mile delivery are important, I believe getting the basics right is key to building a foundation for superior CX. What are the basics? It is as simple as delivering to promise! Whatever your value proposition, once you commit to delivering a parcel, food, grocery, etc., you, as a seller, need to deliver at the first attempt, on time (without delays), in full (no damaged or partial contents).
Hence 'Deliver-to-Promise' is First Attempt Delivery + On-Time + In Full.
If a brand or retailer does that, then the number of calls to the support centre goes down and access to drivers can be nearly done away with - and consequently, cost-optimised. No returns, no re-delivery, no replacements.
In other words, whether your value proposition is 10 minutes, 30 minutes, 1 hour, same day, or next day delivery, the commitment made to your customer must be fulfilled. Deliver-to-Promise was & remains important for B2B deliveries between suppliers to factories, factories to hubs/ warehouses & onto retailers and it's important now for B2C deliveries. It will remain relevant when transitioning to autonomous modes and/or sustainability-driven choices.
To recap, while the cost of unfulfilled promises can be significantly detrimental to a brand, a reseller, or a retailer, the advantages of Deliver-to-Promise are satisfied and loyal customers that shop more from your brand than your competitors. Consider 10 minute, 30-minute or same-day delivery an icing on the cake - but Delivering to Promise is what truly defines your last-mile delivery experience for the customer.
PS. In the next episodes of this blog series on Last-Mile Delivery, we will discuss growing expectations & complexities, the role of technology coupled with relevant practices addressing those in delivering a superior delivery experience.