Last updated on July 30th, 2024 at 01:37 pm

Consumers’ demand for inexpensive and speedy shipping continues to rise. As a result, retailers must adjust their fulfillment strategies to ensure they meet these needs. While omnichannel fulfillment provides many different ways of getting orders into shoppers’ hands, one of the most popular methods is shipping purchases from distribution centers and stores to customers’ homes.

In this scenario, last-mile delivery is crucial to customer satisfaction.

What is Last-Mile Delivery and How Does It Affect Omnichannel Fulfillment?

Last-mile delivery refers to the last phase in the delivery process. It also encompasses the full life cycle of a product moving from the shelf or warehouse to the purchaser’s doorstep. Last-mile delivery helps products get to their final destination in a quick timeframe while curbing costs as much as possible.

The last-mile delivery process typically includes the following steps:

• Placing an order: Shoppers place their orders in store, via website, or via the retailer’s mobile app. Their orders then head to the retailer’s centralized order management system. The system will note customer data – including shipping preferences – and prepare the purchase for delivery.
• Orders arrive at the distribution center: Items will arrive at the transportation hub or distribution center. Later, staff will sort them into their respective orders and prepare them for final shipment.
• Delivery staff handles the orders: Delivery personnel will then group the packages based on their final destinations and delivery routes.
• Delivery staff scans the orders: Delivery personnel will scan each order as they load them onto their vehicles. Then, customers can use real-time tracking information to see when their purchases will arrive.
• Customers provide proof of delivery: Once the delivery staff drops orders off, they must request proof of delivery from each customer. This may include getting an electronic signature. Staff can then update the tracking information to indicate that delivery has occurred.

Examples of Last-Mile Delivery

Several examples of last-mile delivery options that retailers leverage include:

• Offering next-day shipping
• Allowing shoppers to buy products online with a guarantee of two-hour delivery
• Sending products to storage lockers (such as Amazon Hub Lockers), where consumers can retrieve them
• Tapping independent delivery companies, such as Postmates and DoorDash
• Investing in a fleet of their own delivery vehicles

Common Challenges with Last-Mile Delivery

While there are extensive omnichannel fulfillment options that retailers can choose from, last-mile delivery does pose several challenges. Some of these challenges may include:

• High delivery costs: High-speed shipping is costly for retailers, as they must cover storage, delivery personnel’s labor, and fuel. However, brands must keep their shipping fees as low as possible to compete in today’s crowded retail marketplace.
• Lack of real-time order tracking options: If any missteps occur in the delivery process, the orders’ real-time tracking information may not remain accurate. This could lead to customers’ frustration, especially if the final delivery date or time changes.
• Lost orders: If delivery vehicles lose orders or packages are stolen, the retailer will bear the costs associated with replacing the orders and quickly shipping them out again.
• Managing shipping speeds: It may be challenging to guarantee same-day or next-day delivery to customers during peak shopping periods, like the holiday season, or in heavily populated areas where drivers may encounter unexpected traffic.
• Costs associated with returns: If customers choose to return their purchases, the items will need to backtrack on the last-mile delivery process. This could result in additional costs and more management around returns logistics.
• Lack of environmentally-friendly delivery options: Retailers concerned with their carbon footprint may want to promote more environmentally-friendly delivery options, like hybrid vehicles. However, sustainable options are typically more expensive and may not be as feasible to use in certain areas.

Top 3 Reasons to Focus on Last-Mile Delivery

Despite some of the challenges associated with last-mile delivery, it offers several major benefits to both customers and retailers, including:

Greater Efficiency

Last-mile delivery drives more efficiency in the omnichannel fulfillment life cycle, especially as it relates to inventory visibility and optimizing delivery routes. Implementing technologies that support last-mile delivery can help retailers maintain accurate information about enterprise-wide inventory levels.

This then enables brands to make more informed decisions about stocking new products and forecasting demand for certain items. Last-mile delivery solutions can also assist delivery personnel by providing real-time updates on best routes. This results in drivers completing more deliveries.

Higher Customer Satisfaction

Last-mile delivery is especially effective in fostering higher customer satisfaction. It offers shoppers more control over their deliveries, as they can choose high-speed delivery options, or they can leverage the retailer’s platform to adjust their preferred delivery time to better suit their schedules. 

Additionally, consumers can receive real-time updates as they track their purchases, which results in greater transparency.

Boosting Sales

More efficient processes and higher customer satisfaction both lead to a greater likelihood of increased sales. Retailers can expand the number of deliveries made each day, provide easier routes for their delivery personnel, and give more transparency to shoppers about when their purchases will arrive.

As a result, they stand a better chance at reducing expenses such as fuel costs and encouraging consumers to choose their business over a competing brand.

3 Strategies to Support Successful Last-Mile Delivery

Brands can leverage a variety of strategies to ensure successful last-mile delivery efforts, some of which span:

Opening Retail Stores and Micro-fulfillment Centers

If a brand does not currently have any brick-and-mortar retail stores, it may find benefits in opening several locations. This is especially beneficial in more densely populated areas. These stores can then serve as miniature distribution centers, from which delivery personnel can take products and deliver to local customers within a day or two of purchase.

Brands may also want to explore leveraging micro-fulfillment centers (or MFCs) inside these retail stores or as standalone warehouses. A micro-fulfillment center serves as a small fulfillment location that can complete store purchases as well as orders from online and mobile channels. These centers typically house up to 15,000 products in a compact space. 

If brands can station their MFCs in areas where they maintain a large customer base, delivery personnel can pull items from these locations and get orders into customers’ hands sooner. As a result, retailers will achieve faster delivery turnaround times and likely boost customer loyalty.

Investing in Distributed Order Management Systems

Brands can choose from several types of technologies to support last-mile delivery, including distributed order management systems. Distributed order management helps businesses optimize their fulfillment and order processing. 

It also provides inventory visibility across the retailer’s channels and minimizes delivery time and shipping costs where possible by fulfilling purchases from places closest to the shopper. Additionally, it offers customers several fulfillment options at the point of purchase, such as buy online ship-from-store and buy online pickup in-store.

Implementing Smart Order Routing

Retailers should also consider implementing smart order routing, which will allow them to automate the process of selecting a shipping location for orders. They can configure specific rules in their order management systems regarding fulfillment instructions. For example, brands may choose to ship products to customers from a store located closest to them, from a ranked location (such as a distribution center with high inventory levels), or from another warehouse that carries the largest number of items in the customer’s order.

Smart order routing enables more strategic order fulfillment. It also promotes more sustainable shipping practices by reducing split shipments, resulting in brands using less packaging materials and cutting transportation costs.

Last-Mile Delivery’s Factors for Success

According to PricewaterhouseCoopers’ PwC Retail Monitor 2023 report, last-mile delivery relies on four factors to achieve success in today’s competitive retail landscape. The four factors are accuracy, speed, convenience, and profitability. While all four are critical to customers, accuracy overtakes speed in importance. 

This underscores that transparency throughout the entire order and delivery process is key to winning customers’ loyalty. And to attain the real-time data that will provide the level of transparency that consumers are seeking, retailers must invest in the right order management platforms.

Interested in learning how your business can optimize last-mile delivery? Speak with one of our experts today.

Last updated on July 25th, 2024 at 05:00 pm

In today’s digital era, many aspects of retail are going contactless – from payments to inventory tracking. One technology that’s powering the ability to visualize inventory across its shipping and purchase life cycles is RFID. Thanks to RFID solutions, retailers can transform the way they approach their inventory management. This allows for more product visibility, streamlined operations, and additional contactless payment options.

RFID technology also provides benefits to consumers and removes friction from the in-store shopping experience. It enables shoppers to quickly scan products and check out via mobile point-of-sale (POS) solutions. Ultimately, the benefits of RFID technology in retail have made it a vital asset to brands. It especially aids retailers that want real-time data to gain better insights on their products and their consumers’ shopping habits.

What is RFID?

RFID stands for radio frequency identification. It’s a form of technology that enables retailers to track items from initial shipment to point of purchase. RFID technology encompasses four major components: RFID tags, receiving antenna, RFID readers, and software.

The RFID system uses wireless communication and electromagnetic coupling to assign a unique identifier to an item. These unique identifiers become RFID tags that brands can link to specific products. RFID technology has started to eclipse the popularity of barcodes, as it offers real-time data updates and the ability to identify items not in direct view. 

Kris Barton, Senior Director of Market Development – RFID at Avery Dennison, recently sat down for an Endless Aisle podcast to discuss the rapid adoption of RFID technology in the retail industry.

“What RFID does is allow you to collect a lot of data in a very precise fashion in a very fast period of time,” said Kris. “When I think about a typical retail environment, the inventory is going to be about 65 to 70% accurate. The ability to collect this data and make better decisions is what really is driving RFID across the board.”

For more insights on the benefits of RFID in retail, listen to the full podcast and read on below.

“When I think about a typical retail environment, the inventory is going to be about 65 to 70% accurate. The ability to collect this data and make better decisions is what really is driving RFID across the board.”

Kris Barton, Senior Director of Market Development – RFID at Avery Dennison

Top 4 Benefits of RFID Technology in Retail

RFID technology offers many benefits to retailers, with the following notably streamlining experiences for store associates as well as shoppers.

1. Achieve High Levels of Inventory Accuracy and Supply Chain Visibility

Inventory management is crucial to both retailers and consumers. It allows brands to view real-time information on sales, stock levels, and consumer demand for specific products. This then lets retailers make more informed choices about which products to stock, reducing out-of-stock situations and minimizing overstocking.

Meanwhile, real-time supply chain visibility allows consumers to browse up-to-date products online or via mobile. They may then choose from a variety of fulfillment options at the point of purchase, such as buy online pick up in-store (BOPIS), same-day delivery, and ship-to-home. RFID solutions also offer a faster returns process, which saves consumers time.

2. Enable Omnichannel Fulfillment

RFID technology’s real-time tracking analytics offer numerous ways to streamline retail operations and fulfillment. The ability to quickly locate products via tags enables store associates to order more inventory as needed. They can also quickly find customer-requested items in the store.

If the customer’s desired items aren’t available in a particular location, associates can check nearby stores’ stock. This omnichannel approach to fulfillment helps staff ensure that customers can receive the items they need.

3. Improve Loss Prevention and Product Management

Another benefit of RFID technology in retail is its ability to support better inventory management across many sectors. For example, RFID tags can monitor certain product temperatures and alert if moisture compromises storage conditions. They can protect luxury goods by including product authentication information as well.

RFID technology also helps manage smaller products, including beauty items. It can monitor the number of items left on shelves to ensure that shelves always remain stocked, displaying all available options to shoppers.

Additionally, RFID systems offer discreet anti-theft solutions. If an individual attempts to leave a store with a stolen product, that product’s RFID tag will transmit a wave to the nearest receiver and alert the staff. This results in greater loss prevention.

4. Enhance the Customer Experience

RFID technology can serve as a shopping companion for customers, especially when used in smart fitting rooms. Retailers that offer RFID-enabled fitting room experiences enable shoppers to walk inside with their items and access personalized information about other available product styles and colors, as well as styling suggestions. This can also be an optimal way for brands to upsell other products and services. 

While consumers enjoy a completely customized shopping experience, brands will also gain important data. This can include data around shopping habits, such as conversion rates for items brought into fitting rooms and information on which products garner the most interest.

Another common use of RFID technology in retail is for line busting in stores. This occurs by supporting seamless and faster checkout experiences. Line busting is when store associates leverage mobile technology to help customers quickly move through lines at brick-and-mortar retail locations.

Mobile point-of-sale (POS) systems or self-service kiosks with RFID technology can scan products and let customers check out from anywhere in the store – without encountering long lines. Shoppers can also use contactless payments to make purchases, which results in a much more convenient experience. Solutions like Tap to Pay on iPhone capture payments via platforms including Apple Pay, physical credit cards, store gift cards, and more. Ultimately, contactless payments help drive more sales, especially during peak shopping periods.

How RFID Technology is Powering Omnichannel Retailing

The many benefits of RFID technology in retail underscore why it’s a staple in the commerce ecosystem. As brands consider strategies to enhance in-store experiences for sales associates and shoppers, investing in RFID-enabled solutions offers a significant return on investment. RFID technology also allows retailers to seamlessly manage their digital and physical offerings, as well as forecast potential best-selling products or shopping trends.

This ability to monitor inventory across its lifecycle and personalize consumers’ shopping experiences – all within one technology’s system – helps brands become true omnichannel retailers. 

Speak with one of our experts today to learn how your business can reap the benefits of RFID technology in retail.