Customers are becoming more demanding when it comes to delivery – which is why getting your logistics right on the last mile is crucial.
In a world affected by a global pandemic customers are getting increasingly aware of the quality and environmental footprint of their daily delivery. This is putting pressure on retail and e-commerce to manage the so-called last mile well – the last part of the journey when the goods are delivered directly to the customer. In fact, the delivery personnel are the only in person touch-point in a standard e-commerce transaction. Here is what customers expect: Increasingly same-day delivery (ideally in a couple of hours), but they also expect it to be in the most environmentally friendly way, as they are becoming more and more aware of the impact their shopping has on the environment.
Once an order has been processed, the customer’s entire purchase experience takes place during the last mile. Their satisfaction is affected not only by the availability of accurate information throughout the delivery but also by contact with the carrier itself. An unfriendly and unprofessional courier can cast a shadow over the entire buying experience and impact your brand. A helpful, smiling and carefully trained one increases customer satisfaction and willingness to shop with you again.
A study of the Bibloo fashion store, which decided to outsource last-mile logistics through DoDo serves as a case in point. According to the survey, customers using express delivery (within two hours) had a 47 per cent higher retention, and the average value of their orders was 65 per cent higher than that of customers using slower delivery methods. Dodo achieved this mainly by professional and friendly personnel and uncompromised quality in delivery.
Now or never
Same-day delivery, previously seen as a premium service, is becoming the norm. But although 75 per cent of consumers are interested, according to a PwC survey, most retailers are unable to offer this type of delivery. The figures also show that 41 per cent of consumers are willing to pay for the privilege, while almost a quarter (24 per cent) of shoppers would pay a further fee for an additional one or two-hour delivery window of their choice.
This is why Amazon began using predictive models years ago, enabling it to send goods to warehouses in areas where they were more likely to be ordered. One of the basic problems of the last mile is the constant struggle with inefficiency, and every minute gained plays a crucial role. In less exposed areas, delivery points on a specific route may be several kilometers apart; in cities, transport is an obstacle and the cost to the customer is largely influenced by the standard of delivery, such as delivery in a selected hourly window. This creates a huge space for the development of technological innovations that would reduce inefficiencies and meet customer needs.
Through data to fresh delivery
The coronavirus crisis has shown that there is no room for chance and error in last-mile logistics. This is even more true in the case of fresh food distribution, where it is necessary to strictly adhere to the temperature chain and all hygienic measures.
The solution is data, as evidenced by Czech logistics startup DoDo, which already operates in Berlin and Munich. The fastest-growing technology company in the Czech Republic, and the second-fastest growing in Central Europe according to Deloitte Technology Fast 50 CE, DoDo delivers thousands of orders a day for e-shops, fast food chains and supermarkets. Its clients include brands such as KFC and Tesco. Within the DoDo Fresh division, which specialises in the delivery of fresh food, specially designed refrigerated boxes, certified cars and carefully trained couriers are used. The maximum efficiency of distribution is ensured by DoDo’s GAIA logistics platform.
When technology reduces costs
The last mile is the most complex and expensive stage in the entire logistics process. It accounts for as much as 53 per cent of the total cost of goods distribution, making it more expensive than transporting goods between a remote factory on another continent and the destination city. It is not such a big surprise that this area causes great interest in the implementation of new technologies and logistics models, process optimisation and data-based decision-making. Every unused area in the transport space, every unexpected obstacle in city traffic, every kilometer and every minute affects the final price of transport.
Outsourcing last-mile logistics through a technologically advanced partner lets you focus on your own core business, instead of having to spend time untangling HR, fleet management and scalability problems. DoDo comes with a comprehensive solution that offers a system, cars, couriers, dispatching, customer and marketing support. In addition, it can tailor everything to the requirements of the company, whether it is a logistics model with a guarantee of availability according to the client’s needs or branding of the entire fleet. Wide possibilities of individualisation are possible, among other things, thanks to the GAIA platform. The modular platform can be adapted to the client’s business and offers – for example – business intelligence reporting.
The platform not only monitors the movement of orders and all logistics processes in real-time, but also scores the behaviour of couriers behind the wheel; all this with the aim of streamlining the last mile for an ever-growing number of partners who want to succeed in omnichannel trading and fulfilling customer promises.
The entire DoDo fleet is powered by CNG, which, together with delivery planning and the ability to respond immediately to operational barriers, reduces the NOx and SOx levels in inner cities, a major headache for mayors of European cities. Currently, DoDo also has maximally utilised electric cars in pilot operation, with couriers able to handle the maximum number of orders within one route and will introduce to the market as soon as feasibility is proven.
DoDo also offers solutions to companies that deal with reverse logistics. In some instances, customers may return goods, the distributor may not sell out of stock, the goods cannot be delivered, or part of the product (especially packaging) must be returned for recycling. After all, according to a survey by the Shopify platform, the return on e-commerce is around 20 per cent, and in the case of brick-and-mortar stores, the average is around 8 to 10 per cent, depending on the type of goods. Building logistics as a one-way-street does not necessarily pay off.
Challenges as an opportunity
New challenges in logistics, from delivery within hours to greater sustainability, represent a great opportunity. Technologies that include, for example, machine learning, or rethink shipping practices, can help retailers meet customer expectations. Companies such as DoDo cover last-minute logistics solutions that free companies from having to invest in the costly development of their own tools or the purchase and maintenance of cars in the fleet. The result is an effective last-mile available to all merchants, regardless of the kind of goods or volume of orders.
Greening inner cities
The interest in the combination of modern technologies and an effective tailored solution of the last mile is growing rapidly, as is the entire e-commerce segment and the requirements of increasingly demanding customers. It is no coincidence that DoDo has grown by more than 8,400 per cent in the last four years, the second-fastest-growing technology company in Central Europe. DoDo currently operates in more than 50 cities across six countries.
However, our ambitions are much greater: Our green DoDo cars will be seen more and more often on the streets of German cities.
For more information please visit www.idodo.de
by Richard Vlcek, CESO, DoDo