The last mile delivery is the movement of goods from a fulfillment center to their final destination. In other words, the “last mile” is the last leg of your product’s trip before it arrives on your client’s doorstep. This process is significant in the supply chain management business and if your system includes last mile delivery, your success begins with an extensive review of the design of your end-to-end supply chain network. Another factor to consider is your inventory; how it is deployed, postponed, configured and distributed.
One thing is clear and that is the link between supply chain proficiency and confidence in revenue growth. It all boils down to having inventory at the right place, in the right structure and at the right time. An innovative flexible network that is as close to the point of need as possible is essential as well as a transportation solution that delivers to customers’ high expectations (with the most product and revenue in each delivery as possible), along with a simple and accountable returns process and procedure to keep them coming back for more.
The following 3 keys to success can help your business adjust your supply chain network in the right direction:
1. Explore Non-Traditional Distribution Capabilities.
Today’s consumers appreciate brick-and-mortar stores for the physical shopping experience. The physical shopping experience allows for instant gratification and the ability to see, touch and feel merchandise before making a purchase. Your last mile strategy can be designed to maximize your existing brick-and-mortar assets and capitalize on in-store inventory.
By incorporating stores into fulfillment points within your retail distribution network, you can make same day fulfillment a feasible and cost-effective option, offering potential savings in transportation costs. Another option to explore includes using a third-party logistics provider such as Millennium Logistics Management for fulfillment or last mile capabilities and appraising minimal lease requirements to ensure your network can remain flexible. And of course, you’ll want to innovate in the delivery options you offer over time to adapt to consumers’ changing needs and maintain the highest possible margins.
2. Explore Innovative Approaches Such as Bundled Product Shipments.
Last mile delivery introduces a whole new tier of complexity to a product’s sales margins and heightens the “shipment density dilemma” that has challenged shippers for many years. For instance, it has been observed that over fifty percent of customers abandon their online shopping carts either because shipping costs are more than anticipated or because they don’t qualify for free shipping. Usually, high-margin items such as cell phones and laptops can justify conventional small parcel courier costs but it is much more difficult for low-margin products to recover or absorb these costs while remaining profitable.
The success of last mile deliveries is making them profitable and the problem is determining how to modify customer expectations. Until delivery density can be maximized to guarantee profitability, managing customer expectations is an excellent improvised measure.
As a solution, retailers may want to consider consumer incentives to bundle products to compensate for customers’ free shipping preferences in order to raise revenue per order and quantity per shipment. Another option to offset the impact of last mile deliveries could involve postponing orders until multiple products can be shipped together to generate enough revenue and quantity to justify free delivery.
3. Focusing On An Efficient Returns Management.
Historically, resources spent on returns have been viewed as unrecoverable losses therefore, an efficient returns management really needs to be a core part of your last mile strategy, not only to provide your customers with a simple no-hassle returns experience but also so your inventory flows smoothly and efficiently back into your network.
The efficiency of returns can be addressed by having drivers who are located near customers pick up returns on their return routes or another option is to encourage customers to return items back to storefronts or a designated strategic drop-off point. Ultimately, the only way to make the returns process efficient is to reduce the number of touch points.
If this all seems overwhelming, Millennium Logistics Management can help! With a nationwide network of warehouses and delivery agents, Millennium Logistics Management can deliver your products to your store or customer when promised. With every major and medium market covered, we can offer the largest network of last mile delivery agents in the US. We become your single point of contact for last mile deliveries. Contact us today to learn more about our services.
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