Transforming the grocery shopping experience with last-mile delivery

Times have changed, but convenience remains the utmost priority for the customers regarding the grocery shopping experience. As urban life becomes hectic and people need things urgently, fast delivery and quick selections have become the two critical pillars that define convenience in the next-gen grocery shopper’s journey. But on the contrary, supply chain companies are dealing with the problems that COVID-19 has brought up. The sudden rise in demand for rapid delivery has created numerous issues for online order distribution regarding the logistics consequences of buying groceries. Such challenges brought the last mile delivery system in pace.

However, the concept of last-mile delivery is not new to the market. It is also known as “the last leg of the distribution chain,” which can be defined as transporting and delivering goods to the recipient as early as possible. The deliveries may occur at the customer’s home or a collecting point, from the last distribution point, i.e., a warehouse.

Warehouse management and delivery of items to the recipient are the two most essential operations in last-mile deliveries. Savvy customers are more faithful and dependent on brands that ensure a resilient online buying experience and work towards enhancing customer satisfaction.

To deliver on these expectations, supply chain leaders need to reconsider their last-mile strategy. Now, conventional hub and bespoke logistics models would not be enough to balance customer experience and profitability. Amazon fulfillment centers are a fantastic example of the issues associated with handling distribution activities for online buyers.

In this article, we have covered how Last-mile delivery brings immense changes to the grocery shopping experience. So, without any further ado, let’s get started.

Last-mile delivery: What & why?

Based on who defines last-mile delivery, it might involve a variety of elements. The movement of orders from a warehouse, shop, restaurant, or distribution hub to the ultimate destination, usually a customer’s doorway or ultimate destination, is known as last-mile delivery. A corporate customer, a consumer, or even a retail store can be the final destination.

Let’s begin with the numbers :

According to the Bureau of economic analysis, the last mile can account for up to 28% of total logistics expenses or up to 41% of inventory costs, depending on the source.

Another report says last-mile delivery charges account for 53% of total shipping costs. The estimated price of last-mile delivery to the shipper was $10.10 all over the world.

This is the most challenging stage because the product is sent to specific end-users in small quantities relative to the retailer’s overall inventory.

What role did the pandemic play in accelerating the micro-fulfillment trend?

Micro-fulfillment was already a big part of customer engagement before COVID. The epidemic provided a new dimension, emphasizing the significance of preserving market share. The implementation of confinement and isolation measures in March 2020 resulted in a significant drop of foot traffic in physical stores.

Consumer demand for same-day fulfillment exploded during this period. Retailers were compelled to pivot and explore new ways to increase the efficiency of their online delivery services.

Moving on, let’s check some challenges!

Challenges in last-mile delivery

One of the most challenging difficulties that multi-channel businesses face is fulfilling orders from various sales channels. Knowing how much inventory you have and where it is located is critical for promptly and accurately fulfilling the orders.

Poor transportation infrastructure is also a problem for last-mile management. Inefficient routes, lengthier journeys, and delivery delays result in customer dissatisfaction. Finally, inaccurate addresses, remote locations, the lack of a receiver for the shipment, and arbitrary order cancellations, to name a few, result in further delays.

Controlling the final mile side of deliveries comes with a slew of difficulties. With the rise in online grocery shopping and the demand for same-day fulfillment, efficient and effective last-mile deliveries are more important than ever.

The majority of the disadvantages of final mile logistics integration are related to technology. Developing the correct systems and models to improve services while leveraging automation is getting difficult for businesses. It’s even worse when it comes to same-day deliveries.

Finally, in the last mile, the logistical process is the least transparent. Customers have no idea where their deliveries are except that they’re en route and have an 8-hour delivery window. These are difficulties that final mile logistics must address.

As we’ve discussed, the challenges. Now let’s move on and discuss some advantages of last-mile delivery.

Advantages of last-mile delivery

Here are several factors that make last-mile delivery a viable option for your business:

1. Sustainability

These new urban centers not only bring the retailers’ merchandise closer to the final customer, but they also enable same-day delivery. Today the same-day delivery becoming the feature that online buyers most want and anticipate. 46 percent of consumers appreciating rapid delivery more since the outbreak — the mix of speed, convenience, and sustainability is more critical than ever. The accessibility of all these elements, in addition to a one-hour accurate delivery slot and a live tracking link, mesmerizes customers to a great extent. It demonstrates that loyal customer relationship allows for more precise delivery, reducing the environmental impact of redeliveries.

2. Improves efficiency

The appropriate pick and pack strategies are practical and time-saving. It streamlines order fulfillment by allowing goods to be inventoried, stored, chosen, and packed all in one place. Because all order fulfillment activities are handled under one roof, the time-consuming procedure of assembling products from separate storage facilities and transporting them to another location for packing and labeling is shortened.

3. Enhances productivity

You can avoid inactivity or spontaneous diversions by using last-mile delivery software. Your drivers can also deliver packages quickly by taking effective routes. Furthermore, by carefully designing routes, you can handle all your deliveries daily.

4. Boost processes

Various processes are automated with the last-mile delivery system. Consequently, a substantial amount of time, money, and energy is saved. It also organizes the shipment and delivery processes. As a result, your total operations become more efficient, and you can serve a significant number of consumers simultaneously.

5. Improves supply chain

There’s a lot of volatility in demand and supply movements in a highly fragmented industry. Such volatile markets can be met by having a decentralized inventory, available across numerous warehouses and demand centers. To better understand these patterns, business intelligence facilitates more use of data-driven and analytics-based solutions.

6. Easy order fulfillment

Amazon, eBay, and other companies have set new standards by offering next-day and even same-day delivery. As a result, consumer expectations have risen. Today they expect that every other company should-

• Speed up their shipping procedures
• Adapt the business models of big market giants like Amazon to deliver things the same or the next day.

To avoid being gobbled up by the major retailers, more enterprises will pay attention to their delivery strategies and last-mile operations in 2021. Again, they may reach this goal by improving their warehouse, inventory, and overall logistics and transportation system.

Moving on, let’s take an overview of a use case

Case study on last-mile delivery

The “Amazon effect” pushes merchants and their logistics partners to enhance their last-mile delivery strategies. Without the right technologies, this goal will be difficult to execute manually.

According to Daniel Gross of Slate.co, Amazon’s recent purchase of Whole Foods Market hints at a developing trend in last-mile logistics; all businesses and shippers must be mindful of the looming Amazon-Effect. This will introduce the last-mile delivery that isn’t generally purchased online and new last-mile delivery and service expectations.

However, last-mile logistics costs lead to increase in the shipping cost, and more companies are exploring methods to profit from this often-overlooked industry. As more customers want better, better speeds in last-mile logistics, shippers must act to guarantee their businesses succeed.

Conclusion

Shippers must be aware of and comprehend delivery model trends to achieve a competitive advantage in last-mile delivery. From delivery robots and drones to electric cars, many exciting and futuristic options are ready to thrive in the delivery market to a great extent. Technology is advancing at a rapid pace, and it is transforming traditional last-mile logistics in its wake.

Amazon and Walmart, both e-commerce biggies, are leading the charge. Because the destiny of last-mile delivery is fast and green, other businesses must be ready to follow their trend. So, what are you thinking of? Adopting last-mile delivery in business operations is a profitable decision.

So, join the digital revolution today with us; we are a leading digital transformation company renowned for bringing change and advancements to our client’s businesses. Partner with us and give a boost to your business with our digital transformation solutions.