GUEST COMMENT Delivering success: Mastering last-mile logistics for customer satisfaction and loyalty

In the rapidly evolving retail landscape, the relationship between brands, fulfilment providers, and carriers plays a crucial role in delivering customer satisfaction and, ultimately, brand loyalty, writes Angus Knights, product vision & strategy at parcelLab.

In today’s market, we know that brands are using an average of six last-mile carriers. A diverse carrier portfolio provides greater flexibility and reach, particularly during peak periods, but creates complexities in building a unified experience for the customer and can carry a pricing premium. So, how do you choose the right carrier?

Carrier selection goes far beyond pure SLA and delivery metrics. After all, carrier SLAs are not how your customers measure your success (spoiler alert: they care much more about the promise made to them at checkout). It’s about ensuring you have the right carrier services to underpin the delivery methods required to meet your customer proposition and can provide a competitive and consistent experience that meets your shopper’s needs. Each delivery should be a chance to improve customer loyalty and satisfaction and ultimately encourage repeat business.

Unraveling the Delivery Dilemma: The Last-Mile Challenge
Customer emotions are running at an all-time high in anticipation of receiving their newly purchased products. Yet the fulfilment of an order is a shared journey, requiring the brand, warehousing, fulfillment partners, and the final mile logistics carrier to work like clockwork. There is no margin for error – yet the brand has almost no hands-on control. Despite carriers’ best efforts, a quarter of businesses report a 10% rate of failed first delivery attempts; so close, yet so far. YouGov’s findings underscore the delivery experience’s pivotal role, with 48% of consumers acknowledging that a negative shipping or delivery incident significantly impacts their perception of a retailer. Such is its influence that 23% of customers would outright decline future engagements with a retailer following a subpar delivery experience.

The delivery experience, including the shopper’s experience understanding the progress of their order, and proactive management of customer expectations based on any potential issues, is a linchpin in today’s ecommerce experiences. An effortless experience is often the difference between acquiring an expensive one-off transaction and cultivating a loyal and profitable customer base. 

With so much hanging in the balance, investing in the right carrier partners for your business is essential. While many retailers operate in a multi-carrier ecosystem, providing customer choice, efficient carriage, and business flexibility, it can be hard to truly understand carrier performance and therefore which delivery methods and carrier services will make for the happiest customers. Being empowered in carrier selection involves the meticulous collection and analysis of comprehensive delivery data including, but not limited to, first-time delivery rate, attainment against SLA, attainment against customer promise, end-to-end lead times, and crucially the customer sentiment regarding the delivery experience with that particular order and carrier. 

Fine-Tuning Carrier Selection: Strategic Foundations
Curating a selection of carriers and carrier services puts retailers in a solid position to meet their customer’s expectations. A multi-carrier landscape provides brands with multiple carriers and carrier services that can meet the delivery and fulfilment methods available to their customers. This ensures the shopper has maximum choice and convenience, impacting the bottom line and ultimately keeping the board and C-Suite happy. The depth of carriers not only equips retailers to provide their customers with a choice but also empowers them to weather the difficulties created by industrial action or other types of disruption like carrier networks being overwhelmed during peak periods. During peak season, it is not uncommon for entire networks to come to a brief – but catastrophic – standstill. A second or third carrier service to distribute volume reduces the overall risk and provides contingency at the flick of a switch.

Engaging with multiple carriers can also afford retailers greater negotiating leverage, potentially resulting in more favourable terms and enhanced performance. However, the productivity of collaboration with carriers relies on brands having a deep and clear understanding of their delivery performance and the specific drivers affecting performance gaps. This level of visibility may not be immediately clear in basic monthly performance reporting and typically varies from carrier to carrier. Retailers who can consume carrier data themselves or with a trusted technology partner, normalize the reporting and visualization across their carrier portfolio, and then draw performance conclusions can make informed decisions with strategic business impact.  

Crafting the Post-Purchase Experience: Elevating the Experience
Building a fulfilment machine is crucial, but going beyond the pure operations is what separates the A-Players from the rest. Having the right systems, fulfilment partners, and carriers in place is the heavy lifting. But while carriers are world-class at securely and swiftly shipping products, the ultimate brand-customer relationship belongs to the retailer.

So, what makes for a best-in-class experience? At the very moment an order is placed, it begins a long and complex journey to the customer. At each stage, different systems (digital and physical) are creating, logging, and sharing data on the order’s progress. But customers don’t care about complex systems; they want simple, easy experiences. Bringing together data from Order Management Systems (OMS), Warehouse Management Systems (WMS), Carrier Management Systems (CMS), and ultimately directly from the carrier themselves (via EDI or API) to create visibility and communication about one simple order journey is crucial for an effortless customer experience. Each carrier provides its data slightly differently: event codes indicating the logistics event that has occurred and metadata explaining when, where, and in what context an event is taking place. 

Bringing together and harmonising all these elements and communicating them in a simple and customer-centric way elevates the experience beyond simply a strong operational experience but creates one with visibility and proactivity at its core. This not only enhances satisfaction but also positions brands for sustained and profitable growth in the competitive retail landscape.

Angus Knights, product vision & strategy at parcelLab