Datasets:
SURVEY REP ORT
SP ONSORED BY
EXCLUSIVE SURVEY
ARE YOU
THE LAST MILE OF RETAIL?
TABLE OF CONTENTS
Are You Winning The Last Mile Of Retail? ............................................................................................................................
3
Major Challenge: Managing The Customer Experience .............................................................................................
6
Byline: Delivery Imperatives To Compete With Amazon Without Breaking The Bank ..........................
8
Success Story: Uncommon Goods ...............................................................................................................................................
10
Retailers Seek Innovative Returns Solutions .....................................................................................................................
11
Byline: Final Mile Strategies: Balancing Customer Satisfaction And Profitability........................................
15
Success Story: Kohl’s And Amazon ...........................................................................................................................................
16
Retailers Turn To Technology And Disruptors ..................................................................................................................
16
Success Story: Neiman Marcus .................................................................................................................................................
19
Conclusion ................................................................................................................................................................................................
19
About Retail TouchPoints ................................................................................................................................................................
20
About Oracle ..........................................................................................................................................................................................
20
About Convey .........................................................................................................................................................................................
20
ARE YOU WINNING THE LAST MILE OF RETAIL?
In retail, the “last mile” is becoming more crowded, more rushed, more expensive, and
an ever-more-critical contributor to a positive customer experience.
Over the past 18 months, there has been a 50% increase in last mile services, with most of the demand coming from B2C e-Commerce, according to The Last Mile Retail Study, 2018 conducted by eft Supply Chain and Logistics Business Intelligence.
In addition to the growth of online sales, consumer demands are adding fuel to the
competitive fire:
• 65% of consumers want greater flexibility for deliveries;
• 61% want faster deliveries; and
• 51% want real-time visibility into the status of their orders.
This inaugural Retail TouchPoints Last Mile Benchmark Report, based on a survey of 146 retail executives, provides a snapshot of the challenges retailers face in
managing the last mile, including shipping and delivery; post-sale services such as setup
and installation; keeping customers informed; and the tricky (and expensive) area of
product returns.
There has been a 50% increase in last mile services over the past 18 months, with most of the demand coming from B2C e-Commerce.
— EFT LAST MILE RETAIL STUDY 2018
3
ARE YOU WINNING THE LAST MILE OF RETAIL? While 36% of retailers deliver less than 10% of orders directly to customers, 19% deliver 25% to 50% of orders direct to consumers; 24% deliver 75% of more.
The Last Mile survey indicates that delivery of products to customers’ homes or offices already is widespread — and growing. While 36% of retailers deliver less than 10% of orders directly to customers (versus shoppers taking them directly from a store), 19% deliver 25% to 50% of orders direct to customers, and 24% deliver 75% or more of orders direct to customers. Presumably, though, this last group of respondents are
online-only retailers that lack brick-and-mortar stores as distribution points.
What Percentage Of Products Are Delivered To Shoppers’ Homes/Offices? (Versus picked up/purchased in-store)
LESS THAN 10%
10% TO 25%
25% TO 50%
51% TO 75%
MORE THAN 75%
24%
36%
19%
14%
7%
4
ARE YOU WINNING THE LAST MILE OF RETAIL? Retailers have seen their volume of direct deliveries increase over the past 18 months: less than 10% said their percentage has decreased.
In line with the results of the eft study, Last Mile respondents have seen their volume of direct deliveries increase over the past 18 months: 29% say the percentage has increased significantly, and 39% say it has increased slightly. Less than 10% said the percentage has decreased, and 23% say the volume has remained the same.
How Has The Percentage Of Products You Deliver To Shoppers Changed In The Last 18 Months?
23%
29%
INCREASED SIGNIFICANTLY
INCREASED SLIGHTLY
DECREASED SIGNIFICANTLY
DECREASED SLIGHTLY
STAYED ABOUT THE SAME
5%
4%
39%
Which Fulfillment/Delivery Services Do You Offer? (Among retailers with both stores and e-Commerce sites)
BUY VIA MOBILE SITE/APP, DELIVER TO HOME
BUY ONLINE, PICK UP IN-STORE
BUY VIA MOBILE SITE/APP, PICK UP IN-STORE
BUY ONLINE OR VIA MOBILE APP, RETURN IN-STORE
BUY VIA STORE ASSOCIATE’S MOBILE DEVICE, DELIVER TO HOME
BUY VIA IN-STORE KIOSK, DELIVER TO HOME
46%
44%
31%
28%
21%
16%
5
ARE YOU WINNING THE LAST MILE OF RETAIL? MANAGING CUSTOMER EXPERIENCE AND EXPECTATIONS TOPS RETAIL CHALLENGES
The volume of last-mile activity is not the only thing that’s on the rise. Customer expectations around delivery times, service levels and visibility into the process all are increasing rapidly. That’s reflected in the fact that two of the top three concerns among retailers responding to the Last Mile survey are related to customers: Customer expectations around delivery times is the leading challenge, at 49%, and customer expectations of free/low-cost shipping is third, at 44%.
What Are Your Most Significant Last Mile Challenges?
Two of the top three concerns among retailers are related to customers: expectations around delivery times at 49%, and expectations of free/low-cost shipping at 44%.
49%
47%
44%
18%
CUSTOMER EXPECTATIONS AROUND DELIVERY TIMES
RISING SHIPPING COSTS
CUSTOMER EXPECTATIONS OF FREE/ LOW-COST SHIPPING
HANDLING CUSTOMER QUERIES/COMPLAINTS EFFECTIVELY
17%
14%
12%
DELIVERY/FULFILLMENT LOGISTICS
RETURNS MANAGEMENT
MANAGING POST- PURCHASE SERVICE PROVIDERS
6
ARE YOU WINNING THE LAST MILE OF RETAIL? “Ultimately, the most important factor in the last mile is the experience of the end customer (the consumer),” according to the eft Last Mile Retail Study. “Consumers have the same expectations of service and engagement from the places they shop online as
they do in-store, except they expect it faster, in line with the speed of the digital world.”
Amazon is playing a large part in raising the bar of consumer expectations. The Amazon Prime service effectively “hides” shipping costs in an annual fee, which
increases pressures on competitors to offer low- or no-cost shipping. Amazon and others have poured investments into offering two-day, next-day, same-day, and even less than one-hour shipping to a wider swath of consumers, and it has had an impact on the whole customer mindset.
For example, the maximum number of days people are willing to wait for an item to be delivered in exchange for free shipping has decreased, from 5.5 days in 2012 to 4.1 in 2018, according to the 2018 AlixPartners Home-Delivery Shopping Survey. Amazon Prime members are less patient than the population at large: only 19% of Prime members would wait a week in exchange for free shipping, compared to 31% of non- Prime members.
Free shipping has become very much the rule, not the exception. A December 2017 survey by L2 revealed that 77% of brands offer free shipping on their web sites. Among this group, 35% do not require a minimum spending threshold to qualify for free shipping. For those retailers that do require a minimum order, the median dollar amount of $50 has not changed since 2016.
The maximum number of days people are willing to wait for an item to be delivered in exchange for free shipping has decreased from 5.5 days in 2012 to 4.1 days in 2018.
— ALIXPARTNERS HOME-DELIVERY SHOPPING SURVEY
7
ARE YOU WINNING THE LAST MILE OF RETAIL? DELIVERY IMPERATIVES TO COMPETE WITH AMAZON WITHOUT BREAKING THE BANK
By Rob Taylor, CEO, Convey
As retailers fight to stay relevant in the face of Amazon, last mile delivery is being pushed front and center. While Prime
delivery has made the words “fast” and “free” synonymous with a seamless shipping experience, companies have had to
align their operational costs with quickly changing customer expectations, or risk customer loss — 70% will not return after a
poor delivery experience.
Consumers continue to report that they are unimpressed with delivery standards today — nearly 60% of shoppers say that
the delivery experience is mediocre at best, and similarly, for those returning parcel shipments, 42% said that they were not
satisfied with retailers’ return processes.
This has driven pressures to create the perfect delivery experience, with 83% of supply chain executives saying that CX is
now a companywide goal. While the delivery experience is now a standard KPI, many still struggle with legacy technology.
By investing in visibility solutions, retailers can identify exceptions that derail delivery, resolve issues before they result
in an angry customer and reset expectations to create a positive outcome. For retailers, this responsibility involves defining
appropriate expectations through proactive communication, keeping delivery date promises and providing
self-service options.
Communication: Like any great relationship, the retailer-consumer bond needs to be fueled by communication and met expectations. For the 93% of consumers who say they want to stay informed and receive proactive updates about their
shipments, communication creates a sense of transparency. This visibility and communication helps them answer, “Where is
my order?”
According to our research, returns communication is equally important, as it was a source of anxiety for 70% of customers.
Customers returning items indicated that the “Where is my money?” question was most pressing, and they did not want to
deal with the retailer to get that information.
Commitment: While customers care about “fast and free shipping,” over 90% indicated that missing a promise date comes with consequences ranging from expected compensation to disloyalty. If a retailer misses a promise date, consumers
expect a proactive response, and this expectation is amplified over the holidays. Over 57% of consumers said they would be
impressed if their retailer either refunded shipping costs or expedited a new shipment in response to a late shipment.
Control: When it is possible for the consumer to resolve the exception or an anxiety, 97.5% of customers will opt for self-service options. This includes the ability to re-route an in-transit shipment or expedite a new delivery, with younger
consumers also asking for self-pickup options such as lockers. In reverse logistics, consumer control gives the consumer the
ability to schedule the return themselves. In either scenario, they seek convenience — they do not want to pick up the phone
to call a carrier’s 1-800 number.
Customer experience is becoming increasingly important in final mile delivery. Those who can embrace the rise of digital and
bend to their customers’ demands can also increase their own flexibility for package delivery. Ultimately, these retailers will
be able to create a memorable delivery experience and a loyal following without compromising their operations budget.
8 ARE YOU WINNING THE
LAST MILE OF RETAIL?
CLEARING UP CONSUMERS’ VISIBILITY CHALLENGES
Retailers are paying attention to shoppers’ last-mile demands. According to the eft survey, 47% have implemented delivery feedback surveys, and 40% have increased last mile visibility for customers.
Respondents to the Last Mile survey use a variety of tools to keep customers informed about the status of their deliveries: 86% rely on email notifications, along with online tracking links (38%), text messages (33%) and phone calls (29%). Retailers’ self- evaluation of their communication skills is generally positive. A majority, 54%, rate them as “good,” and only 8% rate them as “poor.”
47% of retailers have implemented delivery feedback surveys and 40% have increased last mile visibility for customers.
How Do You Inform Customers About Their Delivery Status? (Check all that apply)
— EFT LAST MILE RETAIL STUDY 2018
38%
33%
29%
86%
EMAIL NOTIFICATIONS
ONLINE TRACKING LINK
TEXT MESSAGES
PHONE CALLS
How Would You Rate Your Last-Mile Communications With Customers?
8%
14%
EXCELLENT
GOOD
SATISFACTORY
POOR
54%
24%
9
ARE YOU WINNING THE LAST MILE OF RETAIL? SUCCESS STORY
VISIBILITY SOLUTION BOOSTS ENGAGEMENT AND CTR FOR UNCOMMON GOODS
Uncommon Goods, a heavily gift-oriented online business devoted to sustainability and customer service, knew that its customers expected visibility into where their packages were at any given time. The retailer launched the Engage
product from Convey in November 2016 to provide communication and proactive exception management, and has
used the platform since then to deliver exceptional customer experiences.
When an order ships, customers receive an email with a tracking link that takes them to a mobile-optimized branded
page on the Convey platform. Behind the scenes, Convey integrates and translates all carrier information, allowing
customers to watch and understand what’s happening as the shipment progresses. Shoppers can sign up for text
messages and exception emails; rate the experience and submit feedback to the Uncommon Goods team; click back
to FAQs; and in some cases place additional orders via special promotions.
Key results include:
• 12% of shoppers subscribe to SMS notifications;
• 54% of shoppers leave feedback before delivery; and
• 6% of shoppers are clicking through to the Uncommon Goods site from the tracking page.
Early knowledge of customer feedback and shipment issues such as delays, incorrect addresses or damaged shipments
gives the retailer’s team more time to proactively correct problems. “Customers really appreciate being in the loop, and
alerted when there’s an unforeseen delay,” said MC Halfpenny, Director of Operations, Uncommon Goods. “Rather than
causing them to be angry, often Uncommon Goods looks like the hero because we’re being proactive.”
10 ARE YOU WINNING THE
LAST MILE OF RETAIL?
RETAILERS SEEK NEW SOLUTIONS TO PERENNIAL PROBLEM OF RETURNS
One of the most challenging aspects of the Last Mile is that it’s a two-way street.
Customers can (and do) return items, and the rise of digital commerce has raised the
stakes — and the costs — in this critical area.
“Return rates for online retail are higher — sometimes four times higher — than for
traditional brick-and-mortar retailers,” said Patrick Bohannon, Vice President, Retail
Strategy for Oracle. “Return policy is very influential to online sales. Consumers want to
have easy and cost-free returns, so many retailers are liberalizing their return rates.”
A Deloitte 2017 holiday shopping survey indicated that consumers’ top perks for online shopping were free shipping, at 72%, and store policies for easy returns, at 44%.
While the majority (61%) of retailers responding to the Last Mile survey are able to keep their returns percentage below 10%, more than one in four, 26%, have a returns percentage in the 10% to 20% range.
Returns percentages appear to be on the rise; only 13% of retailers reported decreases over the past 18 months.
What Is Your Returns Percentage?
3%
10%
61%
26%
LESS THAN 10%
10% TO 20%
21% TO 30%
31% TO 40%
Returns percentages appear to be on the rise: 26% of retailers reported a slight increase over the past 18 months and 5% reported a significant increase. Only 13% reported decreases.
11
ARE YOU WINNING THE LAST MILE OF RETAIL? How Has Your Returns Percentage Changed Over The Past 18 Months?
56%
5%
26%
7%
6%
INCREASED SIGNIFICANTLY
INCREASED SLIGHTLY
DECREASED SIGNIFICANTLY
DECREASED SLIGHTLY
STAYED THE SAME
Cost of returns top the list of retailer challenges at 48%, followed by customer issues with packing/ shipping items for return, at 39%
RETURNS CREATE MULTIPLE COST CENTERS AND COMPLEXITIES
Retailers responding to the Last Mile survey identified returns costs as their biggest challenge, at 48%, but in addition to this general concern, returns create a number of other hurdles.
What Are Your Biggest Returns Challenges?
COST OF RETURNS SHIPPING/HANDLING
CUSTOMER ISSUES WITH PACKING/SHIPPING ITEMS FOR RETURN
IMPACT ON BOTTOM-LINE REVENUE OF RE-SELLING RETURNED ITEMS
COMMUNICATING EFFECTIVELY WITH SHOPPERS ABOUT RETURNS RULES/PROCESSES
COST/LOGISTICS OF CREDITING SHOPPERS’ ACCOUNTS/ PROVIDING REFUNDS
MINIMIZING FRAUDULENT RETURNS
MANAGING IN-STORE STAFF REQUIREMENTS FOR RETURNS PROCESSING
48%
39%
28%
23%
23%
22%
18%
12
ARE YOU WINNING THE LAST MILE OF RETAIL? “Retailers make meticulous plans down to the square inch about what’s carried in their stores, but those plans can be upset by a bin of onesie-twosie returns.”
— DAVID SOBIE, HAPPY RETURNS
Returns can play havoc with basic retailing functions, including planning, inventory,
pricing and in-store assortments. “Many retailers do not plan for returned inventory as
an available ‘pot’ of stock, meaning they overbuy,” said Justine Shiou, Solutions Manager, Planning & Optimization at Oracle. Additionally, “returns are generally made weeks after
the initial purchase which reduces the time to re-sell the item at full price. This can be a
significant issue for fashion/short lifecycle retailers that turn quickly. The selling price is
likely to have already been marked down versus the price when it was purchased.”
David Sobie, Co-Founder and CEO of Happy Returns, which operates “return bars”
where shoppers can bring back items they have bought online, identified other returns-
related issues retailers grapple with. “Broadly speaking, the challenge for retailers is
‘How do I get this inventory back and ready to be restocked in a way that doesn’t break
the bank?’” said Sobie.
Costs include shipping the item back to the distribution center or store, but that’s only
the beginning, said Sobie. Someone needs to assess whether the item can be added
back into the retailer’s inventory. In some cases this is a simple matter of relabeling
and repackaging an undamaged item, but if the item is damaged in some way,
refurbishment might be needed. The retailer might need to take a loss or sell the item
to a downmarket channel.
ONLINE RETURNS UPSET STORE ASSORTMENT PLANS
Omnichannel retailers have their own set of returns challenges. A retailer’s online
assortment may be much larger than that of an individual brick-and-mortar store, but
if shoppers return an item bought online, it needs to be incorporated into the store’s
assortment — or shipped to another store or DC at additional cost.
“Retailers make meticulous plans down to the square inch about what’s carried in
their stores, but those plans can be upset by a bin of onesie-twosie returns,” said
Sobie. “That carefully planned store assortment can make the store look like more of a
discount retailer.”
13
ARE YOU WINNING THE LAST MILE OF RETAIL? POOR RETURNS EXPERIENCES CREATE NEGATIVE CX
Retailers seeking to keep returns costs down may decide to choose slower, less
expensive shipping options, but they may end up paying higher costs in other
areas. “The longer the returns process takes, the more customer service contacts
will be generated,” Sobie warned. “The number-one reason people contact customer
service is to check on their order, but the number-two reason relates to returns. These
are not insignificant costs, either; they can run to a couple of bucks per contact at a
well-run retailer.”
Returns create headaches for consumers as well, meaning that if retailers don’t handle
the process well, they risk losing dissatisfied customers. A 2017 study conducted by
Forrester for Happy Returns, which surveyed online fashion shoppers, revealed that returns are the worst part of online shopping for 73% of consumers. Among those that have to return items, 39% say they do not shop at the retailer again.
Returns are the worst part of online shopping for 73% of consumers. Among those that have to return items, 39% don’t shop that retailer again.
— FORRESTER
14
ARE YOU WINNING THE LAST MILE OF RETAIL? FINAL MILE STRATEGIES: BALANCING CUSTOMER SATISFACTION AND PROFITABILITY
By Justine Shiou, Solutions Manager, Planning and Optimization, Oracle
ONLINE RETURNS AND INVENTORY SHUFFLING
A sale is not a sale until the customer decides to keep it. Return rates have continued to increase across all channels but
online sales have a higher return rate (more than 3X). Despite the operational impacts, retailers are liberalizing return
policies: free returns, return in-store, return without limits basically, to reduce friction. This strategy has significantly
increased operational cost. An online return to the warehouse includes shipping costs and restocking fees, an online back-
to-store return also includes restocking fees but brings another layer of inefficiency, requiring the associate to handle the item, run it back onto the floor, ultimately distracting him/her from more productive customer engagements.
Markdown rates are also climbing exponentially, due to incongruent on-hand store inventory and delayed returns. Returns
are generally made weeks after the initial purchase, which means reduced time to resell at full price, particularly for fashion
retailers. The effectiveness of localized assortment strategies is degraded due to buy online, return in store (BORIS). The
BORIS journey creates incongruent inventory and cluttered sales floors. Retailers are dealing with this in two ways:
• Treatment 1: absorb the cost of taking one-off markdowns to clear the stock
• Treatment 2: absorb the cost of transferring items back to the online warehouse or to another store with the
item in its assortment, a.k.a. inventory shuffling
While the practice of inventory shuffling [using transfers] used to be deemed costly, some retailers have decided this
treatment is more sales effective than creating markdowns. Neither approach is optimal.
TRADE REGIONS: MEASURING TRADEOFF BETWEEN CX AND GROSS MARGIN
A focus on total trade region (online and stores combined) when developing omnichannel strategies and the role of the
store is critical to long-term success. Retailers need to consider all roles, including fulfillment, pickup, return, traditional
sales or a showroom concept. Advanced analysis on departments and items that have high conversion rates need to be
conducted to save sales and create new revenue opportunities. Integrating business insights, like customer loyalty, with
POS or order system data will more effectively drive planning by customer and fulfilment channel. With improved weekly
sales, stock and intake accuracy, and in-season projections by channel, retailers will be able to increase gross margin, and
reduce markdown liabilities. The ability to track the effects of cross-channel returns can help limit under- or over-stock
situations, plan return percentages by channel and customer journey and plan cross-channel sales fulfilment paths.
Retailers intrinsically are bound by the bottom line and shareholder interest. However, the retail environment has
changed significantly while the mindset around profitability has not. Including a customer experience measure (such as
NPS) in the planning process can also help retailers understand a more holistic view of their business and ensure the
plan’s relevance to both gross margin and customer service (t-NPS).
15 ARE YOU WINNING THE
LAST MILE OF RETAIL?
SUCCESS STORY
KOHL’S GETS TRAFFIC BUMP FROM AMAZON RETURNS
Returns aren’t all bad news. Savvy retailers with well-trained staffs have long been able to turn the return occasion into
an opportunity to repair a damaged customer relationship, and in some cases even to take advantage of the consumer’s
presence to sell them additional items.
Since October 2017, Amazon shoppers have been able to return items at 82 Kohl’s stores. It seems benefits are flowing to both parties: Amazon gets a physical location for returns, improving customer service and potentially cutting costs,
and Kohl’s has seen increased foot traffic in the participating stores.
A study by UberMedia found that stores with Amazon Return Centers saw their daily visitors increase 48% after October 2017, compared to a 36% increase in non-Amazon Return center locations. The 12-point difference was over and above the normal holiday traffic increase to be expected in Q4.
RETAILERS TURN TO TECHNOLOGY, THIRD-PARTY SERVICES AND DISRUPTORS
Retailers are tackling their last-mile challenges with a mix of traditional technologies and
cutting-edge solutions. Additionally, as might be expected in an area that’s often far
from their core competencies, retailers rely heavily on third-party services to fulfill many
last-mile chores.
More than half, 59%, of retailers deploy courier/delivery services, and 28% drop ship items directly from suppliers. For services that involve direct customer contact, however, most retailers prefer to keep these functions in-house: only 14% outsource customer service call centers, and just 12% rely on others for product delivery and setup; 22% do not outsource any of their last-mile services.
Retailers’ choices for technological aids in this area generally run to the tried and
true: transportation management solutions and route optimization systems top the current usage list, at 35% and 27% respectively. The percentages using more advanced solutions, such as RFID on shipping containers and products/packaging, are in the
teens. IoT sensors, AI/machine learning, and the use of land-based robots or airborne
drones are even less common. Perhaps in an area as high-stakes as the last mile,
retailers are waiting for the technology to be perfected before taking a chance on it.
For services that involve direct customer contact, most retailers prefer to keep functions in- house: 22% do not outsource any of their last-mile services.
16
ARE YOU WINNING THE LAST MILE OF RETAIL? Which Last Mile Services Do You Outsource To Third Parties? (Check all that apply)
59%
COURIER/DELIVERY SERVICES
28%
DROP SHIP ITEMS DIRECTLY FROM SUPPLIERS
14%
12%
10%
22%
CUSTOMER SERVICE/CALL CENTER
PRODUCT DELIVERY/SETUP
RETURNS MANAGEMENT
WE DON’T OUTSOURCE ANY LAST MILE SERVICES
Which Technologies Do You Use To Manage Last-Mile Activities?
USE NOW
PLAN TO ADOPT WITHIN 18 MONTHS
NO PLANS TO ADOPT
TRANSPORTATION MANAGEMENT SOLUTION
ROUTE OPTIMIZATION SYSTEM
VEHICLE MONITORING TECHNOLOGY
RFID ON SHIPPING CONTAINERS
MOBILE DEVICE MONITORING OF DELIVERY PEOPLE
RFID ON PRODUCTS/PACKAGING
IOT SENSORS
AI/MACHINE LEARNING
LAND-BASED ROBOTIC DELIVERIES
DRONE DELIVERIES
35%
27%
18%
16%
14%
14%
10%
7%
6%
2%
21%
27%
24%
24%
31%
28%
26%
33%
12%
14%
44%
46%
58%
60%
55%
58%
64%
60%
82%
84%
17
ARE YOU WINNING THE LAST MILE OF RETAIL? One area where at least a few retailers are willing to try something new is with
disruptive shippers, such as Uber, Deliv, Instacart and Shipt. The December 2017
Target acquisition of Shipt for $550 million, and high-profile Instacart partnerships with
retailers including BJ’s Wholesale Club and Albertsons, may signal to other brands that
such services are “retail-ready.”
Which Non-Traditional Shippers Have You Used During The Past 12 Months? (Check all that apply)
Top retailer data uses are focused on functional areas, but 42% are using returns data to adjust their product selections.
21%
8%
7%
11%
UBER
DELIV
INSTACART
SHIPT
59%
OTHER E.G. ANDREANI, ENJOY, SPEEDEE, GOOGLE EXPRESS, SKIP THE DISHES
Given the growing volume of last mile activity, retailers should look to step up their data
collection and analysis efforts in order to gain a strategic advantage. At this point, top
data uses are focused on functional areas such as resolving customer service issues, at 48%, and tracking the speed/efficiency of drivers, at 46%. A significant minority of respondents, 42%, are using returns data to adjust their product selections, a smart move that could potentially reduce future returns rates.
What Are Your Most Valuable Uses For Last Mile Data?
48%
46%
42%
22%
RESOLVE CUSTOMER SERVICE ISSUES
TRACK SPEED/ EFFICIENCY OF DRIVERS OR DELIVERY SERVICES
USE RETURNS DATA TO ALTER PRODUCT SELECTION
DETERMINE MORE EFFICIENT DELIVERY ROUTES
17%
13%
12%
CHANGE SHIPPING OFFERS (I.E. DISCOUNTS FOR DELIVERING MULTIPLE ITEMS IN ONE BOX)
CHANGE INTERNAL FULFILLMENT RULES (E.G. SET MINIMUM TRUCK CAPACITIES AT 75%)
IDENTIFY LOCATIONS FOR NEW STORES/ E-COMMERCE ACTIVITIES
18
ARE YOU WINNING THE LAST MILE OF RETAIL? SUCCESS STORY
NEIMAN MARCUS BOOSTS SPEED, SERVICE LEVELS WITH PROACTIVE SOLUTION
Last-mile challenges are multiplied when retailers are delivering large, bulky items such as furniture and appliances. At
least one in every 10 of these “white glove” deliveries faces a problem of some kind, such as an incorrect address or phone number or a scheduling conflict with the carrier, according to the Wall Street Journal.
When the retailer is Neiman Marcus, known for its high levels of in-store customer service, there’s lots of pressure to get these deliveries right as often as possible. The supply chain team at Neiman Marcus collaborated with the customer
care group, using a Convey solution to track the most complex deliveries.
The software captures problems with enough time to correct them before the scheduled delivery date. Within 30 days of launching the solution, Neiman Marcus had reduced transit times to customer by 24%.
CONCLUSION
Retailers and their last-mile partners are racing to keep up with customer expectations
that are only moving in one direction: higher. To make things even more challenging,
customers want fast, accurate deliveries, hassle-free returns, and enhanced visibility
into these processes — all for little or no cost.
“The biggest challenge in the last mile is matching increasing cost against spiraling consumer expectations,” said Paul Hamblin, Editor in Chief, Logistics Business magazine, as quoted in the eft Last Mile Retail Study. “Next-day is already almost standard, same- day is hot on its heels. Who’s going to pay for all this?”
“The biggest challenge in the last mile is matching increasing cost against spiraling consumer expectations.”
Technology and innovation are providing some of the answers, as retailers seek the
most optimal transportation routes and try out new business models for shipping and
returns. But retailers will need to dig deeper in order to meet their last-mile challenges.
— PAUL HAMBLIN, LOGISTICS BUSINESS
They need to gather insights about price sensitivity and elasticity in the last mile, so
that they can begin recouping at least some of their costs without alienating customers.
They should invest in back-end systems that allow them to make firm delivery date
promises, and to proactively prevent missteps that can damage the customer relationship. Finally, retailers may want to rethink whether every order needs to be delivered within 12, 24 or 48 hours. If consumers are confident that their order will
arrive when the retailer has said it will, they might be more willing to wait a few days.
19
ARE YOU WINNING THE LAST MILE OF RETAIL? To Learn More...
Retail TouchPoints is an online publishing network for retail executives, with content focused on optimizing the customer experience across all channels. The Retail TouchPoints network is comprised of three weekly e-newsletters, special reports, web seminars, exclusive benchmark research, an insightful
editorial blog, and a content-rich web site featuring daily news updates and multi-media interviews at www.retailtouchpoints.com. The Retail TouchPoints team also interacts with social media communities via Facebook, Twitter and LinkedIn.
P 201.257.8528 info@retailtouchpoints.com
Oracle provides retailers with a complete, open, and integrated suite of best-of-breed business
applications, cloud services, and hardware that are engineered to work together and empower
commerce. Leading fashion, grocery, and specialty retailers use Oracle solutions to anticipate market
changes, simplify operations and inspire authentic brand interactions. For more information, visit our website at www.oracle.com/retail.
P 1.650.506.7000 oneretailvoice_ww@oracle.com
Convey enables businesses worldwide to take control of shipping and delivery. Our cloud-based
platform connects disparate data and processes, giving shippers the insight to make smart decisions,
and the tools to take action. From parcel to freight, and first to final mile, Convey helps the world’s
largest brands create better delivery outcomes while reducing costs, improving visibility and
transforming transportation into their next competitive advantage. Founded in 2013, Convey is based in Austin, Texas. Learn more at: www.getconvey.com.
P 602.842.2788 info@getconvey.com