q124/random_k4/random_3.md

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?
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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
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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.

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