From the e-commerce fuelled home deliveries to intracity deliveries of heavy goods consignments, be it for commercial or household purposes, last mile delivery is a fundamental part of a supply chain. If done right, it can retain the target consumers for life or else one might risk alienating them.
Last mile or local delivery of goods is the latest trend in the logistics field today among the consumers, retailers as well as the online and brick-and-mortar stores. Although this business practice has been in existence for decades for delivering goods to the consumers and helping B2B retailers and distributors deliver supplies to local companies, today, it is no longer just a back-end process. Thanks to e-commerce and their same-day delivery strategies, last mile logistics has become an aggressive differentiator that has the competence to drive sales and boost customer loyalty. In fact, the segment is expecting to grow at a CAGR of 12.17 percent by 2020 as per market research.
Numerous internet retail start-ups failed to accomplish the same day delivery process when it was initiated as they lacked store fulfillment inventory and final delivery logistics solutions. But eventually, they were able to overcome these hurdles with new strategies, processes, and technologies to maintain a market share as well as attract and keep customers intact. E-commerce and e-retail exist on the assurance of convenience and a major part of the convenience is quick and reliable delivery. This makes last mile delivery an indispensable factor in this space. Unfortunately, limited stock of products and the fear of redundancy of inventory make fast delivery in a wide range of stock keeping units across the country a challenge for these retail start-ups. They end up restricting their business to limited locations with the help of their in-house logistics arms. However, players have now started working towards intensifying their services covering as many pin codes as possible and out-sourced logistics are helping them in their strategies.
Retailers have often faced problems in concluding the last mile when customers are unavailable during the time of delivery. It not only costs the company crucial time and money but also exposes the goods to various risks. Logistical solutions make up for a large chunk of the last mile problem. In our country, where 75% of commercial vehicles in this space are owned by small fleet operators, only 1% logistics players fall under the organised sector. The rest exposes the entire industry to a vicious cycle of ineffective deployment of resources and flawed services. The entry of startups in the last mile logistics space is efficiently knocking off the barriers that affect the last mile logistics and customer acquisition. Although it may not seem viable for the small online retailers who aren't in a position to compete with the market giants, even such retailers must emphasize on their overall value proposition as much as possible by looking out for outbound logistics services. This will help them to augment the shipping experience significantly.
Authored By: Pushkar Singh, Founder, LetsTransport