Well, before we delve deeper to understand the various aspects of last mile delivery, let’s learn about an interesting survey. This is an eye opener.
In the second half of 2014, two senior research analysts with ‘ARC Advisory Group,’ a reputed technology research and advisory group conducted a study on omnichannel commerce landscape. The key findings of the research are below:
• Physical stores still drive major share of the retail revenue. Taking into account the answers of survey respondents, brick and mortar stores accounted for approximately 67 percent of all revenue. Wait, it’s still not the real picture
• After analyzing the actual revenue growth, researchers found a drastically different result. The real story is that over the last five or more years, survey responses indicated revenue growth of merely 6 percent from the brick and mortar channel compared to a staggering 47 percent from e-commerce
• Respondents also indicated that in the near future, brick and mortar stores will witness flat growth compared to 40 percent growth in e-commerce
We may even call it a “paradigm shift” in the retail landscape. It shows that converging channels will be the key as omnichannel operations continue to evolve. However, it also poses a major challenge to e-commerce companies; which is how to deal with the last mile delivery.
Why is Last Mile so important?
“The moment that matters.” – Sucharita Mulpuru, e-commerce expert with Forrester Research
This small phrase sums it up all. Last mile delivery has truly proved to be a defining moment for e-commerce businesses as it plays a crucial role in the companies’ sustainability and growth.
The term “last mile” is used as a metaphor to describe the movement of products from a fulfilment centre to their final destination. The last mile is a major element in the home-delivery model that constitutes more than 50 percent of the total logistics cost and is filled with challenges. The major ones are below:
• Traffic congestion in cities and the struggle to cover distance in the remote areas add time and cost
• Incorrect or invalid address and also locations that are hard to find
• Unavailability of any recipient at home to accept delivery
• Buyers no longer want the delivery or in short “Buyer Remorse”
• Lack of parking facility, elevators out of service and many other challenges
All the reasons mentioned above add cost, time, and inconvenience to an already marginal activity in terms of revenues. In addition, e-shoppers expect quick delivery and don’t like having to wait. It is mainly because the e-commerce and the Internet have been conditioned for customers’ convenience and satisfaction.
A Potential Solution to Last Mile Delivery Issue
Automated parcel delivery terminals or click & collect lockers have come up as a silver lining for e-commerce businesses. These lockers help overcome many of the challenges related to home delivery and offer online retailers, consumers, and logistics service providers a potent solution.
Self-service locker services providers like Smartbox offer buyers the option to collect their orders from metro stations and other convenient locations such as community centres, shopping malls or office buildings. E-tailers can ship multiple orders in bulk to a single delivery terminal, and can reduce significant cost besides avoiding most roadblocks of the last mile element of home delivery. Smart lockers or self-service lockers is a convenient method of collecting merchandise for e-shoppers because they can pick up their parcel at a convenient time, may be on their way to or from work, without having to wait at home for a specific time period.
The Way Forward
In India, an increasing number of e-commerce companies are adopting automated parcel lockers. The un-manned installations of robust terminals offer a self-pick-up solution in the form of intelligent high-tech parcel delivery lockers and creating market opportunities for even new entrants into the e-commerce domain. Simply put, Indian e-commerce companies are quickly learning by getting into partnership with automated parcel lockers providers like Smartbox to leverage technology to optimize last-mile delivery and returns management. In this way, logistical infrastructure in the context of e-commerce business is going through a drastic and positive change.