As online sales account for more and more of the retail market, last-mile delivery has become an increasingly important touchpoint for brands to differentiate themselves
Food, fashion, flatpack furniture and gifts all flew off websites as consumers sat and shopped at home. By April, ecommerce had reached a record high, accounting for a third (30.7 per cent) of all UK retail sales, according to the Office for National Statistics, a spike of 10 percentage points in just a few short weeks. In one week alone, Tesco fulfilled one million online orders, hiring 4,000 new drivers and 12,000 new pickers to meet demand.
Yes, the shift in shopping habits brought with it brand-new opportunities. By the end of 2020, ecommerce will see a £5.3-billion lift thanks to coronavirus, says Edge Retail Insight. But it has also exposed major challenges and gaps when it comes to customer experience. After all, without bricks-and-mortar stores, the opportunity for consumer interaction has been cut down, with fewer chances to impress and excel at customer service. The only exception? The last mile.
“It’s sometimes the only physical touchpoint, so the doorstep experience is absolutely critical to brand perception,” says Louisa Hosegood, digital and strategy director at Bis Henderson Consulting. “Customers often want speed, but more than that, they want certainty of delivery and good communications.”
These expectations were incredibly difficult to meet, as last-mile logistics became a minefield. “The massive spike in demand on lockdown caused significant difficulties for retailers in terms of mobilising additional resources and capacity at such short notice, all with consideration to the enormous constraints posed by strict social distancing rules,” says Hosegood.
Majed Zambaraji, founder and chief executive of international courier Time Express, says: “Retailers eager to sell more and cut their losses made unrealistic parcel delivery commitments to customers, who in turn put pressure on logistics couriers to deliver shipments on time.”
Using tech to manage customer expectations
At Moo, an online print business delivering materials to customers across 200 countries, the disruption to last-mile logistics was a major sticking point when it came to customer experience. “We had lots of challenges getting stuff to people in the timeframe we wanted to and a big increase in queries to customer support,” says director of customer experience Dan Moross.
“But once they contacted us as the issues were so fractious and spread across different carriers, we didn’t always have the help to give them.”
For Moo and many other companies, the experience has forced an acceleration in the integration of technology and dedicated software designed to help minimise these issues in the last mile. Even in the middle of a crisis.
In April, for example, just as international restrictions gained pace, Moo partnered with data and technology providers parcelLab to send new updates to customers providing more accurate delivery times. Exception emails were also created to keep customers updated on delays or failed deliveries, while insights on international couriers also allowed Moo to provide more accurate delivery timelines at the point of checkout.
“It immediately helped to reduce inbound queries about ‘where is my order’ as customers had better information,” says Moross. Its net promotor score, or customer satisfaction rating, also began to recover.
Reducing costly inbound queries to customer service agents was also a top priority for The Diamond Store as it grappled with a 250 per cent spike in orders over lockdown, explains chief executive Gary Ingram. “People kept calling in and we wanted to stop the calls and let the customer know before they had to question what was going on,” he says.
It used software provider HubSpot to create regular email updates. “They’d say ‘we’re now setting the sapphire; we’re now taking it to the polisher and so on’ for any product where delivery would take longer than 24 hours. It led to a massive decline in queries,” says Ingram. “It saved us, to be honest.”
Retaining customer loyalty through delivery
At vitamin and CBD (cannabidiol) supplement retailer YourZooki, the experience of COVID-19, and a huge increase in demand, has led to dramatic changes to its last-mile logistics operations, says co-founder Marcus Mollinga. The company now has a fully automated shipping integration platform that enables it to ship all orders made before 5pm on the same day and offer more shipping options to customers.
“At the same time, we updated our inventory management to a more powerful cloud-based system,” he says. “This has allowed us to have real-time inventory control and reporting, as well as greater clarity across our suppliers, production and customers.”
A new artificial intelligence chatbot has also joined its customer service team to help manage the increase in queries to its call centre. “Our customer’s experience is incredibly important to us and these tech solutions have enabled us to improve our service,” adds Mollinga.
Retailers invest in new technology for the last mile
Even as retailers emerge from the height of the online rush during lockdown, many are still making moves to improve the last-mile customer experience. In August, Asda confirmed its clothing brand George would be trialling delivery management software Sorted, to track parcels and provide customers with real-time updates.
It came off the back of a realisation that when customers hear nothing about a delay, it can really hurt retention and loyalty, says Sorted founder and chief executive David Grimes. “Asda recognised they were behind and needed to address this issue, particularly as they approach the peak period of Black Friday [November 27] and Christmas,” he says.
The Sorted React software will now enable them to alert customers proactively to delivery status in customer-friendly language, reducing the need to reach out to a support centre, which greatly reduces costs.
Its investment in this technology is symptomatic of a longer-term shift among retailers when it comes to last-mile logistics, one accelerated by the experience of the last few months, says Grimes. “Retailers are now recognising the importance of delivery. It was often the forgotten part of the ecommerce transaction, but we’re seeing a real surge in them acknowledging they need to improve their delivery offer,” he says.
“COVID has made retailers realise their online offer is crucial and a major part of that is delivery; the question of how do I get this product to a customer?”
Perhaps, more importantly, companies need to ask themselves, how do you get your products to a happy customer?