A package may have traveled a long distance to reach its intended recipient. Possibly even halfway around the world! But the journey isn’t over yet. The package is now at the second-last stop of the way, and it’s up to your logistics business to safely take the package to its final destination—namely, its owner’s hands.
Enter last-mile fulfillment, which is the process spanning this final transport trip. It’s an essential component in e-commerce, where people shop online and expect their orders to reach them in perfect condition.
Your logistics business will need to adopt the right strategy and tools to prove itself as a reliable last-mile fulfillment partner for e-commerce. After all, as Statista shares, retail e-commerce market volume in Southeast Asia is forecast to only grow over the next few years. In this guide, we explore what last-mile fulfillment is and how you can improve your last-mile fulfillment processes to:
- Improve customer satisfaction,
- Facilitate a better business relationship with retailers, and
- Receive a healthy stream of delivery jobs as you ride the e-commerce wave.
What Is Last-Mile Fulfillment?
Last-mile fulfillment refers to the last step of the delivery process that gets a package from the retailer to the customer.
In a typical e-commerce fulfillment process, a customer first orders an item from a retailer. The retailer arranges the customer’s item to be packed and perhaps even flown in from abroad. After that, the package is sent to a central distribution center closest to the customer.
At the distribution center, the package is assigned to a logistics company, which tasks one of its delivery personnel with transporting the package. The delivery personnel picks up the package and delivers it to the customer to fulfill their order. This is the last step in the delivery process, hence where last-mile fulfillment comes in.
What Could Go Wrong During Last-Mile Fulfillment?
So many things. The main concerns during last-mile fulfillment include packages being delivered late or even going missing before delivery. Such scenarios could happen due to myriad reasons, such as:
- Unexpected delays in delivery schedules. For safety reasons, delivery personnel may need to temporarily halt delivery during poor weather conditions. Traffic jams can also impede delivery (traffic in Indonesia and Thailand is known to be notoriously congested, for example!)
- The delivery personnel having difficulty finding the customer’s location. This could happen if the customer had mistyped their delivery address or if the customer’s neighborhood has a confusing layout or lacks signage.
- Having insufficient delivery personnel to deliver orders. If your logistics business doesn’t have enough delivery personnel to keep up with demand, you might be unable to adhere to delivery schedules.
- No one being home to collect the package. The result is a wasted trip for your delivery personnel, who will also need to return at a future date to re-attempt delivery.
Customers have high expectations for delivery. They want their orders to arrive in pristine condition and to arrive fast. Possibly even on the same day or the next day at the latest, for groceries and essential household items.
If your logistics business is unable to deliver (pun not intended), expect many unhappy customers who will express their dissatisfaction to the retailer. Retailers want their logistics partners to handle high order volumes and tight delivery timelines. So when they get wind of how your logistics business is failing in last-mile fulfillment, they may not want to continue engaging you for delivery jobs.
The result? Your revenue takes a hit.
How to Improve Last-Mile Fulfillment: 4 Ways
1. Hire More Delivery Personnel
If a shortage of delivery personnel is affecting your last-mile fulfillment performance, then the clear solution is to hire more.
A popular option is for businesses to crowd-source their delivery personnel on an independent contractor basis instead of putting them on full-time payroll. For instance, Amazon’s Amazon Flex program allows anyone with their vehicle to take up ad hoc package delivery jobs for Amazon on a flexible schedule. Similarly, Grab engages independent delivery partners to deliver freshly prepared meals, groceries, and even documents.
Through such a crowd-sourcing arrangement, logistics businesses can rapidly adjust the size of their delivery personnel base according to the number of delivery jobs received. Having such a skill is vital during major shopping periods where orders—and hence the demand for delivery—will predictably spike.
2. Invest in Smart Technology
Besides beefing up your human resources for last-mile fulfillment, leveraging smart technology can also help you deliver orders more effectively.
For instance, tap on transport management software platforms that help logistics businesses optimize delivery routes and maximize the number of orders delivered within a particular schedule.
These platforms may also include built-in communication features for businesses to contact delivery personnel on the go. This way, if a person monitoring traffic conditions in the business’ headquarters becomes aware of a traffic jam, they can inform affected delivery personnel ahead of time and re-route them to maintain timely delivery.
At the same time, the logistics business can use a customer engagement solution—such as Mobile Marketing Cloud—to send an automated message to the customer that their package is delayed (but still on its way!)
Alternatively, customers may want to make proactive inquiries into the status of their package or change the date of delivery. An intelligent conversation platform like Conversational AI Cloud can provide a 24/7 self-service portal for customers to manage their deliveries anytime and from any location.
Last but not least, look into e-signing software to digitally take customer signatures for deliveries. By doing so, you do away with the tedious handling of physical delivery documents.
3. Explore Alternative Fulfillment Methods
Instead of sending packages to customers’ homes, why not deliver them to a central location that’s convenient for customers to head to? Not only making the last-mile fulfillment more efficient, but it can also prevent the headache of bringing a package to a customer’s address—only for no one to be around to receive it.
For example, smart parcel locker systems are gradually becoming commonplace. These are lockers typically located near a cluster of residential blocks, in which delivery personnel can deposit individual packages. Afterward, customers can retrieve their packages by keying in a unique access code or scanning a QR code associated with their package.
Alternatively, work to establish collection points at merchants near residential areas, such as convenience stores. Your delivery personnel can drop off packages with these merchants for customers to pick up at their leisure. The customer may also choose to purchase something from the merchant simultaneously, creating a win-win situation for all parties involved.
4. Prioritize Your Communication With Customers
Try as you might, not all deliveries will go as planned. You may need to inform customers of delayed delivery due to unforeseen events, or customers may want to reschedule delivery. This is where maintaining an open customer support channel can help smoothen out such last-mile fulfillment complications and leave customers happy with their delivery experience nevertheless.
With Mobile Marketing Cloud, your business can proactively send delivery updates to notify customers of when they can expect to receive their packages. These messages will be saved in Mobile Marketing Cloud, and can also be synced to our Mobile Service Cloud customer service software to facilitate any subsequent customer service conversations.
Mobile Service Cloud then allows your business to engage customers on their preferred communication channels, such as WhatsApp, Facebook Messenger, and Instagram Messenger. Regardless of the preferred channel, all support messages will be consolidated into an Agent Inbox for ease of management by your customer service team.
Conversational AI Cloud also integrates with Mobile Service Cloud to unlock powerful conversational AI features for automating responses to common queries 24/7 (especially delivery status questions from eager customers!) Then, for queries requiring more human support, there is a smooth handover to Mobile Service Cloud, which seamlessly connects customers to a customer service representative for specialized assistance.
Last-Mile Fulfillment May Take Place Last, But It Should Not Be An Afterthought.
No matter the number of miles a package may have clocked in its “travels,” they all count for nothing if the package ultimately fails to reach the customer. As the party in charge of last-mile fulfillment, you don’t want your business to be the weak link that causes a well-executed supply chain to crumble.
Even if your logistics business is faring well at this time, it pays to invest in enhancements for greater scale in the long term. Consider upgrading your last-mile fulfillment tech stack with Conversational AI Cloud, which adds a layer of artificial intelligence to your customer service processes.
When you incorporate Conversational AI Cloud into your operations, you gain deeper insights into your customers and their common delivery-related inquiries. Using such data, you can work on providing information that preemptively addresses such concerns, and foster a more delightful customer experience. You can also look forward to rendering smart and timely responses to frequently asked questions, while freeing up your staff to attend to more complex customer queries.