Instant gratification drives last-mile technology advancements

For online shoppers, the time it takes for their parcel to reach them – after pressing pay – does matter. Consumers have become far less patient during the pandemic; there was an exponential rise in eCommerce, with everything from groceries, to alcohol, hair care products and medicine all being ordered online.

In fact, so entrenched has this new behaviour become that online delivery options are springing up all over the place, with some of the most recent grocery options being Pick n Pay’s ASAP and Spar2U. With so many online options now available, it is doubtful consumers will ever return to pre-Covid19 levels.

Yet while consumers spent around $5-billion online in South Africa in 2021, getting their products to them has become a delicate balancing act, one where speed has become a highly-traded commodity while the cost that it takes to deliver, quickly, has become a commercial conundrum for retailers.

The primary issue is that it costs more to get a parcel to a customer faster. Throw in unknown issues such as traffic, inaccurate mapping and even weather, not to mention that the customer may not be at their address when the parcel arrives, brands are sitting with a financial headache where they increasingly need to meet their customers’ demands but come up against a barrage of time and costly delays.

This is especially true given “last-mile delivery” – the final leg in the eCommerce process at which time the parcel is delivered to the customer – accounts for 53% of the total costs of shipping while customers are largely unwilling to pay for the actual cost of delivery. This threatens profitability, especially for smaller brands.

Antonio Bruni, CEO of smart logistics technology solution Picup, says the last-mile leg of the delivery journey is the most crucial but it’s hard for brands to get right and is often the most inefficient in the entire supply chain.

“This is sometimes due to reasons outside of a brand’s control, but mostly it comes down to a lack of technology solutions that can track parcels, navigate speed-bumps in the road and keep customers informed as to the whereabouts of their parcels.”

“As a case in point is this customer: she recently placed an order for some cosmetics using a leading local online store. The order value was for a few hundred Rands and the customer understandably wanted her delivery as soon as possible,” he explains.

“Notwithstanding the additional fee incurred to get the products to the customer, the delivery time was advised to be two weeks – following which an email was received extending the wait period even longer! This created great frustration for the customer, and has soured the entire experience.”

Bruni says while this extra-long wait period is highly unusual for any brand, let alone a leading online store, it does go to show that even the top guys still get the customer experience wrong.

“These delivery hazards can be eradicated when using the right type of data-driven logistics software solutions and by having decentralised “hubs” in city centres that reduce the wait time of getting stock from warehouses located on the urban peripheries,” he adds.

Picup Hubs enable retailers, ecommerce and health care providers, etc. to gain easier access to last-mile distribution as they act as consolidation points for the Picup network to deliver to the end user within a radius of between 10 and 20 kilometres.

This versus dispatching them from large depots outside of the city which takes time, sometimes days, and incurs high monthly rental fees – all of which need to be recouped through the delivery fee.

Julia Ahlfeldt, a Certified Customer Experience Professional says shoppers are often inclined to not buy from a brand that got the “last-mile” delivery wrong. In fact, reports suggest that 56% of shoppers won’t buy from a brand again if they are not satisfied with the shipping service.

“It is arguably among, if not, the most important part of the entire online shopping experience. Once the money has left the consumer’s wallet, the next step is the receipt of the item. If that receipt takes too long, and/ or is too expensive it erodes the experience and could lead to a loss of repeat business,” she adds.

According to Ahlfeldt, some brands have got it right. Superbalist is one such example that often delivers next day even when the customer has been informed of a two or three day-wait period, while others, even established brands, can take weeks to deliver.

“It’s also important to note that the consumer sees the delivery service provider as an extension of the brand they bought from, so if they have a negative experience during the delivery, this tarnishes the original brand that they purchased from,” she says.

In conclusion, Ahlfeldt says consumers compare the last best delivery experience to their next delivery experience, and if they are not up to par they will find fault. “They also expect instant gratification, living in a digital world has sped everything up, and the same goes for last-mile delivery expectations, faster has become better.”

It’s clear that the future of online shopping lies in the hands of the logistics solutions that brands choose to use. With a plethora of new service providers now available, such as Picup, which make use of real-time data to drive their delivery models, customers’ needs are being heeded to.

But it will take a while for last-mile experiences across the board to improve in line with increasing customer demand – and which, if they get it wrong, can cost these service providers and brands the end sale.