How Last Mile Delivery Affects Ecommerce

With the surge of ecommerce companies, the entire scenario of the ‘traditional’ supply chain has come to a toss. To beat cut-throat competition, these companies have revamped their relationship with their customers by facilitating an expedited and low-cost home delivery services. Take the examples of these companies which have debuted in the market a couple of years ago including Myntra, Grofers, Big Basket, Jabong to name few, and made a good name with their quality services, and fast and free shipping. This has raised the expectations of consumers who anticipate free of cost delivery with their purchase, and to receive their items in a short span of time. With the trend of online shopping booming nowadays, the demand to hire X-cart developer is also growing rapidly.

Behind the scene

While online shopping market has seen a tremendous growth in the last few years, not only in metros but also in tier 2 and tier 3 cities, yet there are some challenges that these companies are facing. To keep up with their customers’ expectations, though they are offering free delivery services, the shipping cost is something which is breaking their back. The last mile or the final leg of delivering goods from retailer’s distribution centre to the end user’s door cost these companies an arm and a leg. There is no denying that the entire delivery chain is full of constraints but the last mile proves particularly challenging. The main aspect of the last mile that differentiates it from the entire transportation process is the home delivery service, which solely requires supplier and consumer. In many markets, especially in small cities, delivering packages to the final destination doesn’t come easy because of various reasons including bad infrastructure, increased heavy traffic, lack of signage etc.

Gaining upper hand

To overcome the last-mile dilemma, many major players are looking out for options in order to maintain their product-flow intact and cut down on shipping costs. Spurring ‘fulfillment houses’ seems to be the most preferred option for the ecommerce companies, which allow customers who have placed orders online, collect their packages from a nearby location. This ‘Click and Collect’ option has no doubt decreased the shipping costs to a great extent and exceeded faster delivery. Macy’s, one of the largest departmental stores in the U.S. believes that these fulfillment centers will prove to be productive in expediting faster and same-day delivery services. Macy’s CEO Karen Houget says, “These fulfillment locations will enable customers to buy online and pick-up in store.”  But the question is how far this kind of setting will prove fruitful. For companies like Macy’s that already have existing brick and mortar outlets, this solution can be feasible but what about those which do not have and can’t afford to have.

To add more, many customers prefer this option of collection from a nearby store as they have the flexibility to pick up their items at their convenience. They can collect it while on their way to or from work, without any constraint to be at home for a recommended period. Thus, proving a win-win situation both for customers and retailers- great consumer convenience and more cost effective logistics respectively.

Amazon’s last mile solution goes to the next level

This ecommerce giant has always supported the fact that for the success of any ecommerce company, logistics is one of the most important factors. Taking it to the next level, Amazon is planning to build its own transportation and logistics network. The company has proposed to set up its own warehouses and offered delivery services to third part sellers under a program called Fulfillment by Amazon.

Not only this, Amazon is planning to go even more high tech with the use of drones to deliver parcels via parachute. Although this method involves security and safety issues, this is a breakthrough in home delivery services. With this, Amazon carried out its first drone-delivery successfully in the United Kingdom last year in 2016 and hoping to bring this first-of-its-kind delivery to other markets as well.

What is trending in the last mile delivery system?

So we have talked about the ‘fulfillment centers’, owning transportation and logistics network and drone deliveries, but what else is trending nowadays that has made easier for the ecommerce players to combat with the last-mile woes. Many companies are using smart technology and sensors to get their products delivered intact. They are putting monitoring devices in the packages to trace their status. The companies in pharmaceuticals and frozen foods business are keen to know the temperature and humidity level of their products at every step during the supply chain cycle. This has become an industry standard now.

Conclusion

While there is no such one-size-fits-all approach to solve last-mile blues, e-commerce companies have to be prepared to meet these challenges and work it out to provide an effective and lasting strategy.

Report this Page