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Last mile delivery: Black hole or stellar opportunity?

Speed and convenience have emerged among the key drivers for consumers as they contemplate where to spend their hard-earned dollars.

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But some online retailers aren’t always listening, continually outsourcing delivery to third party couriers or contractors who risk their brand reputation time and time again.

Think about it. Once an item leaves your distribution centre, you’re handing over complete control of the ‘last mile’ delivery experience and all interaction that customer has with your brand to a third party.

This is despite the fact that the delivery experience could ultimately make or break your relationship with the customer next time they’re contemplating an online purchase. Recent research revealed one in three shoppers say they’ve chosen not to re-order products from a company because of a poor delivery experience.

Customer loyalty could disappear, despite all your efforts.

What retailers need to remember is that your customer isn’t waiting for a courier company to arrive – they’re waiting for the brand they ordered from to deliver their parcel.

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If your customer’s order is late, lost, broken or doesn’t arrive at all, it’s your brand on the line.

Going in blind

Common issues for retailers outsourcing last mile delivery includes a complete lack of visibility over the parcel journey and third party accountability. Static and outdated technology used by the majority of courier companies in Australia indicates dispatch time, but the journey isn’t often updated again until after the completion (or failure) of a delivery.

Other key issues for retailers include a lack of accountability by third party companies regarding delivery KPIs and poor customer experiences, which are often not accurately tracked.

In food retail, delivery platforms such as UberEATS and Deliveroo have been accused of foul play by blocking retailers from seeing details of customers who order from them via their apps, but those platforms then use customer email addresses for their own marketing purposes.

Brands are completely losing control over their relationship with their customers by utilising third parties who either do not accurately track KPIs and customer satisfaction, or who will not share their data with the retailer.

Outsourcing delivery can be a black hole in last mile delivery for retail brands, who need a rethink if they want to retain customer loyalty and compete in the digital economy.

The future is brighter

Figures show that Australians spent an estimated $23.5 billion on online retail, which accounts for around 7.7% of total retail sales. This represents a 14.4% growth on the previous year, according to the NAB Online Retail Sales Index.

Traditional delivery models are being challenged by a new crop of retailers who are digitising their last mile model as a means of delivering stand-out customer experience.

Major retailers such as The Good Guys, Miele, JB HiFi and Focus on Furniture, are using mobile app technology to streamline last mile delivery operations and provide an UBER-like experience where customers can literally watch driver progress in real time and keep updated with a live ETA on their smartphone.

These technology platforms give retailers full visibility and control over completed deliveries, delivery times, live location tracking and all important customer ratings.

But these trailblazers are in the minority, with customer and business dissatisfaction levels still very high, according to IBISWorld’s report Courier Pick-up and Delivery Services in Australia.

For some, it remains the black hole of last mile delivery, for others it is an opportunity to deliver a truly engaging digital customer experience.

Brenton Gill is the Managing Director of last mile enterprise technology platform Radaro