How Retail and E-commerce can Scale Fast with Perfect Logistics Optimization
In the US Retail hit $6 trillion in 2018. | E-commerce would hit $735 billion by 2023.Â
Customer demand is increasing and so is the total volume shipped. Lesser control over fleet availability with a shortage of drivers, and an international trade unease, Freight rates keep fluctuating, if not increasing. High demand and volume are pushing companies to scale, however lack of proper tech enablement and resource shortage, the companies end up slowing their growth.
What happens when delays, failed deliveries, inefficient delivery experience occur
It’s a fast world. Now, more than ever, the effect of delays, failed deliveries, bad delivery experience is compounded.
Companies are always on the radar. The incentive to switch is high, and the cost for such switches are low.
Who gets impacted and how?
Two surveys were conducted. One, a general survey with over 5000 respondents (which did not include any client’s customers). And the second across controlled groups (client’s customers across the retail, e-commerce, and CPG sector) (3000+ respondents).Â
{Here, the client refers to identified players (for the survey) in retail, e-commerce, and CPG sector)
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Impact of delays |
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General group |
Controlled group |
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| First instance of delay: Less likely to use the same brand/delivery service |
31% |
24% |
| Second instance of delay: Less likely to use the same brand/delivery service |
46% |
29% |
| Repeated delays: Likely to dissuade others from using brand/delivery service |
38% |
46% |
Delays, failed deliveries (and overall a bad delivery experience) erodes the market capitalization.
The responses from both groups (to the same questions) were consistent and hence validated each other. However, the controlled group is 21% more likely to dissuade others to use the brand/service.
This means that when customer’s loyalty isn’t recognized or rewarded with service improvement, then they would have a much bigger impact on your timeline than new customers who haven’t invested in the brand that much.
So, if you think business would be fine without on-time deliveries (each time), then you might get pushed out of the market in 3 years by someone else offering a better delivery experience.
Case stories – A few downs and ups
There are many examples of companies that didn’t pivot on time or didn’t gauge the moving trends towards customer needs.
Toys R Us was a behemoth in retail, but as they got ‘too secure’ in their standing of brick and mortar, they missed the realization that customers wanted a higher degree of convenience with next-day home deliveries, live tracking of their packages, and on-time deliveries (as promised).
Companies that don’t innovate with changing customer needs face their decline head-on.
Another example is the oft-repeated one, Amazon. They never once focused on solidifying their position with higher margins. Even with losses, they moved to secure their customer retention model. It’s not the discounts, it’s the delivery experience that sells.
In the east, and pushing benchmarks, Alibaba has rewritten the entire ‘new retail’ concept, opening the next age of ‘experience’ led shopping.
How to survive – How to scale – How to succeed
Survive – Scale – Succeed
Seamless processes with automated shipment movement. Going down to root causes of delays…
- Digitization and automation of processes is the first step
- Change is necessary, especially in the form of tech improvements.
- Change must be led from the front, establishing the need and guiding people to best ways to adopt the same.
- Fast scaling on the road to success. You will do much more with much less.
- Far higher efficiency at lower costs.
Faster and cheaper deliveries with great experience
Here’s how you do it!
- Align your processes with the best delivery route optimization technology.
- Become customer-centric, invest your resources in creating moments of ‘wow’ for your customers which make them come back.
- Streamline your primary or second distribution where you are fully aware where each package, each vehicle, each driver is at any time.
- Be on top of each delivery timeline with accurate ETAs and live package movement tracking for managers and customers alike.
- Become more agile with faster response time for all on-ground activities, with live notifications and instant alerts.
Recommended Read: Case Study | Customer-Centric Live Logistics Optimization For Large Online Retailer
Faster (Schedule, planning, auto allocation)
The delivery volume in recent times has increased by 20-30% and you are expected to deliver shipments faster. Next-day delivery, even same-day deliveries are possible on a consistent basis with zero delays/errors. Create the ideal delivery schedule factoring in the live traffic and on-ground realities. Make use of the best-in-class route planning engine running on machine learning and artificial intelligence.
LogiNext’s route planning engine gives the best schedule possible based on all specifications, like…
- customer preferred delivery times,
- store delivery preferences,
- specific time-specific road restrictions, and more.
The robust planning engine works in tandem with the auto-allocation engine. The right package is allocated, automatically, to the right driver/vehicle (best suited to handle the package/shipment). The system identifies skill sets, vehicle types, shipment specifics, to make the perfect combination.
The planning that took hours, with this, takes mere minutes. And the accuracy (planned vs actual) is more than 98%. The entire planning can be done within a few clicks.
Companies can plan and dispatch quickly, cutting down loading times. Drivers follow traffic-light routes, following an optimized delivery schedule, right from their smartphones. They can simply follow the path through an interactive map interface within their apps. Travel and turnaround time is reduced by more than 28%.
The seamless and easy to use app interface leads to faster delivery handover, with easy in-app scanning and validations. What’s more, the drivers can capture customer feedback right from the app at the point of exchange.
High efficiency, complete optimization at far lower costs
It’s about delivering more with less. Don’t let market risks like freight rates, driver shortages, and international trade anxiety impact your bottom line.
The planning engine optimizes the capacity of all available fleet and even suggest exactly how many extra vehicles to utilize (if required) and from which ideal vendor.
You won’t be caught off-guard by under or over capacity, cutting down market risk and dependency on spot markets to match the current load.
The auto-allocation engine would assign the right load for each vehicle and assign it to the right driver. Here, as the driver would be adept at handling the load and the vehicle and would be well-versed with the route, the overall turnaround time would be far lesser.
Faster routes, optimized vehicle capacity, balanced loads also mean less cost. You will be able to deliver more packages per trip, in lesser time, with higher efficiency, and all this in a pre-planned manner which itself would take only minutes to accomplish.
That brings us to the Holy Grail of New-Age Retail: Great customer (delivery) experience
Now that you have faster deliveries at lower costs, the third part of the puzzle is creating a great experience for the customers.
- Each order placed is a promise. If you have promised next day delivery, the customer would expect you to come good on that. This promise, in today’s world, has become a great business driver.
- The promise is only one side of it. The execution is another side of it. We have talked before of how to deliver faster, on-time, at far lesser costs. The third side is managing expectations and communication.
- Live tracking of all packages (for manager and customers) gives clarity and confidence in the timeline of the delivery. The customer can use their phones to know exactly where the package is around them, and at what exact time it would reach them.
- In case of any unforeseen delay, the manager and the customer would receive instant notifications communicating the same with a revised ETA. This ETA revision happens dynamically on-ground.
- The manager can choose to take corrective actions, assigning the package to another driver (if there is a vehicle breakdown), or just let the automated live planning system handle it.
- When the driver delivers the package at the exact time promised, with proper delivery validations and feedback capture, the customer’s confidence in the brand/delivery service increases multifold.
This adds on back to the initial ‘promise’ and the subsequent business driver.
Recommended Read: Everything CPG! How Live Logistics Planning Boosts Customer Retention And Lowers Costs
In the survey, 57% of respondents said if they had a choice between a great delivery service and an average product (which they ordered) and an average delivery service and a great product, they would go with the great delivery service.
Live delivery route planning with complete end-to-end visibility
Even with returns or pickup requests, the auto-allocation engine immediately assigns it to the closest and the best-suited driver. Quick pickups and fast processing of returns or pickups add another dimension to your delivery service.
All of this happens live, in an interactive map interface. The manager can view each vehicle/driver moving along optimized routes, bringing down the reaction time an (ideal) zero point, instantaneous.
With 2 billion+ location data points, the system keeps learning so that each plan is better than the last, increasing efficiency over time.
Some key KPIs which set you up to succeed
- Increased On-time orders – 32%
- Reduced load imbalance instances – 56%
- Reduced driver turnaround time – 41%
- Increased capacity utilization – 47%
- Increase customer satisfaction (NPS) – 67%
- Increased repeat customers – 39%
- Reduced logistics costs – 18%
Our survey also showed that after a positive delivery experience;
- over 60% responded that they were more likely to come back;
- over 40% said that they would recommend the brand/service to more people
What’s the right time to adopt this tech? Now!
Adopting the right tech at the right time safeguards future growth. Customer needs are evolving, any delay in tech adoption would push restrict you from growing at your full potential, creating opportunities for others to overtake you.Â
At the pace of current development, machine learning enabled delivery route optimization is the key to sustaining your brand to be consistently relevant for the upcoming future. To ensure that five years down the line you down get sidelined, get the right tech now.
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