5 last mile delivery challenges that can hurt your bottom line

In today’s market, keeping costs to a minimum is vital. For many retailers, delivery is a key concern. How can you keep customers happy, without stretching your resources too thin?

In today’s pressurised market, keeping costs to a minimum is vital. And for many retailers, delivery is a key concern. How can you keep customers happy, without stretching your resources too thin?

Offering quality delivery is, of course, non-negotiable. But forming your own fleet is a huge undertaking. The costs are significant and, besides that, you’ll need a whole logistics team to run your operation. Both running and personnel costs can hit your bottom line hard. What’s more, they could prevent your business from thriving and scaling. Often, the answer lies in collaborating with an external delivery partner — and having the delivery tech to make that possible. Organising more deliveries, more efficiently, with control and transparency.

With the right tech in place, you’ll have a tool to counter five delivery challenges we’ve seen affecting retailers’ bottom lines. We’ve distilled them below, along with tech-fuelled strategies to ride them out.

1. Failed deliveries generate added cost

A failed or delayed delivery means organising a re-delivery. Aside from general inefficiency, this can throw up thorny questions. Who should cover the cost of driving to the area again? Does that cost get shifted to the customer, or swallowed by the retailer? Inconvenience is, of course, avoided if the delivery goes smoothly the first time. So what stops this from happening?

a) Lack of delivery instructions

Perhaps the customer hasn’t filled in enough details, or a time-pressured driver doesn’t see them. Either way, missing specifics can mean a delivery fails at the final hurdle. The solution is handing customers the power to provide these details, quickly and easily. From the moment their order lands in your delivery tech platform, up until their delivery arrives.

For example, customers could add details about security gates that the driver will need to get through. Or that the entrance to their building isn’t obvious at first glance. With many people now back at the office, workplace deliveries are also a convenient option. In this case, adding details on the building, company and reception desk protocol is key for smooth delivery.

This hands-on communication would then be delivered to your drivers in instant app updates. Crucially, they shouldn’t be inundated with notifications whenever there’s a customer update. Instead, details can seamlessly update in the background to display at the relevant point on their route.

b) Misplaced delivery items

Picture this: Your driver is happily going about their optimised route. They’re making good time, simultaneously keeping emissions to a minimum. They arrive at their next destination and go to pick out the box. But it’s not in the back of the truck…

Miscommunication at the packing depot means they’re missing an item. The driver’s only option is to let the customer know they can’t deliver. After the customer’s already been at home, waiting on the arranged time slot. Last-minute disappointment, that’s highly inconvenient. Far from ideal…

To avoid this, a clear, seamless flow between packers and drivers is vital. Your items would, ideally, be tracked from the order stage and assigned to optimised routes. They’ll be sorted per route and loaded into the right vehicles. Whether 20 or 200, your driver can scan the boxes to ensure they’re all there. If they haven’t scanned each routed item before leaving, they’ll be notified to check their cargo to avoid at-destination mishaps.

As for future evolution in this area, think automated sorting via conveyor belts. Optimising process quality while minimising the scope for human error.

2. Outdated technology impedes transparency 

Optimising delivery efficiency becomes possible with end-to-end tracking. With the right delivery platform, you’ll gain this transparency. Enabling you to save on costs and time, to shore up your bottom line.

Working with Excel for route planning? Sticking to the same route each day? Seeing delivery success so far, but know there’s a better way? Your hunch is right! Better still, moving to a delivery tech platform needn’t be an overwhelming step.

Ideally, your delivery tech platform will cover all your tracking needs in one. Orders, routing, driver and customer communication. This delivers all-important transparency. Integrated GPS tracking, for example, shows where your drivers are and when. This would be combined with a customer communication history, logging which notifications they receive. Remedying a failed delivery? You’ll have all the data you need to pinpoint what went wrong and where. Not only fixing the situation as rapidly as possible but evolving your strategy for the future, too. Logging the distance driven by your fleet for business accounting? The numbers will be there ready for you.

A user-friendly platform interface is also a must. Likewise, personalised onboarding and a highly responsive support team. These aspects unite to smooth your transition to optimised routing, bolstering that bottom line with catch-all transparency.

3. Inefficient routing racks up cost and time

Beyond transparency, updating your delivery tech enables you to leverage optimised routing. Mapping the most time, cost and fuel-efficient routes, day in and day out. To achieve this, leading delivery tech often utilises AI and ML. Evolving from each delivery, enabling enhanced future deliveries to the same address or area. Especially for retailers with a large urban customer base, AI and ML insights provide further utility. Traffic monitoring, for example. Integrating this information enables more accurate delivery tracking — crucial for customer satisfaction. With weather data inputs, route timings can also adapt to suit.

4. Poor customer experience

It’s no secret that acquiring customers is much more expensive than keeping them. So, to protect your bottom line, let’s ensure they want to come back for more!

Recurring customers are vital to a sustainable model. So creating an excellent experience must stay a top priority. We’ve already touched on an element of this: Giving customers rapid, easy opportunities to add key delivery details for their driver. After all, they know best where things might get confusing at their address.

As for the delivery and driver side, tailored, real-time notifications go a long way. As a result, a tech platform that enables these is key to a great delivery experience. Being able to customise this communication flow elevates it further. Adding your brand’s logo, colours and language creates a full-circle experience for your customers, from order to delivery. Enhancing experience and trust, to prime ongoing customer loyalty.

5. Mismatch between offering and reality

Making every effort to create an exceptional customer experience is crucial. However, catering to customers can’t come at the expense of your business viability!

It can be tempting to offer a huge range of delivery windows, for example. You might feel pressurised as your competitors are doing it. You might think it’s the flexibility that your customers demand. But can you deliver on that promise? Without affecting your bottom line?

The key is finding the balance between customer satisfaction and a secure, efficient model. The worst possible outcome is overpromising and underdelivering! Avoiding this with a measured, pragmatic approach involves two key factors:

a) Regular customer feedback

Finding out what customers truly value in your service is the best way to strike the right balance. Perhaps 1-hour slots are as popular as 10-minute slots? With a customer-centric delivery platform, you’ll be able to easily gather instant feedback. And it should be visible to you on the platform, rather than lost in an external partner’s black-box system.

b) A flexible delivery platform

To respond to customer feedback, you’ll need flexible and tailorable delivery tech. Tweaking your offering to fine-tune the balance between experience excellence and business sustainability. From time windows to vehicle types and tailored real-time notifications, adaptable tech enables you to keep evolving.

Ready to reinforce your bottom line? 

To explore streamlining your deliveries with Gordon Tech, start your free trial.

Rasmus Hallgren Sánchez

Rasmus Hallgren Sánchez

Marketing Manager at Gordon Tech. Rasmus is passionate about all things marketing, e-commerce, and digitalisation. Has an almost incurable predilection for hockey and tacos.

Gordon is a cloud-based platform that empowers retailers to manage, track, and optimise their last mile deliveries.