With the COVID-19 lockdowns drastically increasing online shopping, consumer behavior has changed, shifting all parameters – with no signs of returning to the status quo.
The increase of demand for delivery has put additional pressure on the last-mile phase, through which emerged new and exciting trends.
E-commerce businesses must now be more agile, invest in smarter technologies and improve customer service – and here are 5 of the trends they need to look out for in 2021.
1- OTIFNENC – On time, In full, No error, No contact
Supply chain specialists use the reference OTIFNENC to describe the last-mile delivery foundational formula: On time, In full, No error, No contact.
With a higher demand for deliveries, e-commerce businesses need to adhere to the OTIFNENC principle to stay ahead of the curve – as a failed delivery is not just one that was not delivered, but one that had not met the customer’s expectations.
‘Convenience’ has now become the key word – and customers no longer want to wait for their delivery. So, in addition to an accurate delivery, a speedy one is a given.
With the COVID-19 cases still on a rise, a contact-less delivery has become the standard. It is not enough for riders to leave the package outside doorsteps – businesses also need to notify customers about delivery completion, without them needing to open the door. To further ensure no-contact delivery, businesses are also replacing card payment and cash with online payment only.
2- Same-day delivery and Options
Same day delivery is becoming increasingly important, as research shows that more than 80% of customers – millennials in particular – are willing to pay a 30% premium for same-day delivery.
It is crucial to optimize certain elements such as vehicle capacity utilization, routing, and logistics management before committing to same-day delivery, due to how complex and tricky it is.
Nevertheless, this trend is still expected to reach a 25% market share by 2025, showing the opportunity for e-commerce businesses to make additional profit on delivery.
In addition to same-day ones, delivery options are catching on as customers want more convenience.
Choosing specific delivery days, parcel lockers and click and collect are all options which customers are on the look out for.
3- Real-time tracking
Retails and logistics companies are investing more in technology, which offers essential elements to the last-mile phase, such as Location Intelligence (LI). Through LI, retailers keep customers in the loop when it comes to their parcel. This also decreases the number of calls a retailer would receive from customers asking for updates regarding their orders location.
Real-time tracking also improves the overall customer experience, as most customers are willing to accept a late delivery if they have been priorly notified of it.
In addition to real-time tracking, businesses can leverage LI to find optimum delivery routes and have better visibility over the last-mile phase. The data from the tracking platform can be analyzed to further optimize the delivery process, ensuring an enhanced customer experience in the future.
4- Autonomous delivery
While we are not yet ready to turn to autonomous delivery vehicles, some door-step deliveries will be done via drone.
Retail giant Amazon has invested over USD 500 million in Aurora, the autonomous technology developer – while other retailers are experimenting with self-driving vehicles, drones, robots and bots.
These new-age delivery solutions will first need to be approved from local governments before they can launch, but will be eventually be crucial to and disrupt the last-mile phase.
Technology can eliminate human intervention, which is the main cause of delays and complications in deliveries (such as staff unavailability during shifts), while also reducing costs (such employees’ salaries and other labor costs).
5- More urban warehouses and fulfillment hubs
With e-commerce booming and the demand for same-day delivery increasing, online retailers will need to build more hubs and warehouses around the city. Closer warehouses lead to faster deliveries, less transit time and easier access to the e-commerce’s last-mile partners.
Due to the pandemic, foot traffic in physical stores has fallen, which has led retailers to use them as fulfillment hubs to send out deliveries faster.