The importance of last mile in e-commerce
Lee Shepherd is the director at Amazon Logistics, Middle East and North Africa Operations
“Start with the customer and work backwards.” That’s the best advice I can give to any business leader setting out on their e-commerce journey.
E-commerce is rapidly transforming the retail industry into an omnichannel ecosystem, but when it comes to customer experience, the fundamentals still apply. Customers want great service with a human touch.
For the e-commerce customer, a direct connection generally only happens when the delivery driver arrives with the package. This final part of the order fulfilment operation is known as the ‘last mile’, where parcels are loaded onto vans in delivery stations and taken to the customer’s home or workplace. As this is the first time the customer physically interacts with the company, the last mile has a huge impact on customer buying decisions, brand trust and future loyalty.
Customers do not just want a smooth, hassle-free and friendly exchange at the doorstep. They also want speed and convenience. And they expect efficient support when questions arise.
When they do not get the service they expect, they are quick to walk away. A global survey by PwC found that one in three customers would break their loyalty to a brand they loved after just one bad experience.
In e-commerce, it is easy to be drawn into focusing too much on the first click that leads to a sale. But get the last mile wrong and that first click may be the last.
And here we arrive at the key question: what does it take to build and deliver a best-in-class last-mile operation?
Transformed by technology
E-commerce has transformed not just retail. It has led to the development of the most technologically advanced and far-reaching delivery networks the world has ever seen.
This is why technology has to be the heartbeat of any business looking to establish a best-in-class last-mile network. The most successful systems are driven by AI and algorithms that allocate packages to delivery partners and then optimise their routes to speed those parcels to customers.
A new Amazon delivery centre in Abu Dhabi will deploy this kind of tech to enable more customers to benefit from services such as next-day and even same-day delivery.
Delivering what customers want
This is a time of unprecedented opportunity for e-commerce businesses in the UAE. The market has grown dramatically since the pandemic accelerated the pivot to online shopping – and it shows no sign of slowing down. It is expected to record compound annual growth of 38 per cent in 2019-22, far ahead of the global average of 16.6 per cent.
Nine out of 10 shoppers in the UAE – and across the Middle East and North Africa – say they plan to buy everything online from now on, according to a post-pandemic survey by digital experience platform Sitecore. This calls for a swift and innovative upgrade of logistics and fulfilment operations.
“Companies that fail to keep up with logistics trends risk losing competitive advantage and falling out of favour with consumers,” says the 2022 MENA E-commerce Report by CNNB Solutions. “Consumers expect transparency around order status and delivery, and some also want near-instant fulfilment. This experience is fast becoming a key differentiator, one that’s closely tied to perceptions of service and quality.”
Today, I have 12 years’ experience in the Fulfilment and Delivery sector. But if I were starting out now, there are a few things I believe it would be helpful to know.
Everything starts with the customer experience: Become obsessed with the people buying your products. They will not tolerate poor service and their loyalty is fragile. Prepare to deliver what customers want – when, where and how they want it.
Innovation is everything: Customer demand is always evolving so you cannot stand still. Lead from the front rather than playing catch-up and let the wider industry follow your developments.
Diversify your delivery fleet with in-house and local partners: This gives you the opportunity to flex capacity with demand without incurring unnecessary fixed costs.
Go digital in your capacity and route planning systems: We use complex algorithms that consider multiple factors when drawing up delivery routes.
Look after your last-mile teams: They are the only people in your network who will meet customers face to face, so they need to be motivated to deliver excellent service. Prioritise safety and wellness, and factor in flexibility.
Experience is everything
Retail, whether in digital or physical spaces, will always be about customer experience. This is why there will likely always be a place for browsing the shops in the glittering malls across the country, even as e-commerce accounts for a large section of the market.
It is also why the businesses that win the battle for e-commerce customers will be those that can replicate that in-store human touch, while adding speed, convenience, efficiency and a friendly smile at the doorstep.
Get the last mile right, and you will be the first choice for consumers who value customer experience above all else.