What is Last Mile Delivery Part 1: How Omni-Channel Retail is Affecting Transportation & Logistics
Last mile delivery is defined as the movement of goods from a transportation hub to the final delivery destination. The final delivery destination is typically a personal residence. The focus of last mile logistics is to deliver items to the end user as fast as possible. Last mile logistics has become a popular area of interest for retailers due to the growing demand for fully integrated omni-channel retailing. Evolving omni-channel needs have forced retailers to evaluate current transportation network capabilities and make adjustments accordingly. Focus has been placed on last mile logistics because, in many cases, this is a key differentiator for retailers. Because consumers can easily shop for product alternatives retailers and their supply chain partners must provide exceptional service to gain market share and build brand loyalty. Last mile delivery is becoming more important than ever due to the surge of online orders. E-commerce sales are expected to reach $1.35 billion by 2018, an increase of 28.8% from 2013. These expected increases span across a variety of product types including apparel, entertainment, food, health & beauty, electronics and more. Retailers must begin to prepare their transportation networks for traffic fluctuations caused by the expected growth in online sales. Traditional transportation methods such as UPS, FedEx and USPS are not successful in all regions and retailers are beginning to search for alternatives to satisfy their needs. In order to accommodate faster shipping times, changing regulation and infrastructure limitations retailers and their transportation partners have started to research delivery alternatives including click-to-collect locations, local regional carriers, drones and much more. By focusing on last mile delivery alternatives retailers are able to provide and guarantee exceptional service levels to their customers and adapt to the constantly changing omni-channel retail environment. To learn more about last mile delivery and omni-channel retailing contact Datex experts today at marketing@datexcorp.com or www.datexcorp.com .
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What is Last Mile Delivery Part 1: How Omni-Channel Retail is Affecting Transportation & Logistics
- 1. WHAT IS LAST MILE DELIVERY: PART 1: HOW OMNI-CHANNEL RETAIL IS AFFECTING TRANSPORTATION & LOGISTICS
- 2. What is Last Mile Delivery? • Last Mile Delivery is the movement of goods from a retailer’s transportation hub to the final delivery destination – consumer homes – with the goal of items being delivered as fast as possible. • The growing demand for fully integrated omni-channel retailinghas forced retailers and their transportation and logistics partners to evaluate distribution network capabilities and offerings. • Omni-channel retailing will continue to be a driving factor inthe evolution of last mile delivery for years to come.
- 3. What is Omni-Channel Retailing? • The traditional shopping experience has evolved into a cross- functional multi-channel strategy known as omni-channel retailing. This strategy allows consumers to shop and make purchases from a variety of retail channels including home computers, mobile devices, phones, catalogs, in-store and more. • In order to provide a seamless shopping experience, retailers must integrate all of these channels so that they can accurately and efficiently be used in any combination. • The retail industry has evolved in this manner to adapt to both technological advancements as well as changing customer expectations.
- 4. Omni-Channel Retail & Last Mile Delivery • Many retailers have introduced some form of an omni-channel retail strategy. To differentiate and remain competitive, retailers and their logistics providers must focus on order fulfillment accuracy, efficiency and cost. • While many retailers have been successful in manufacturing and selling items consumers want to purchase, fulfilling customer orders in a timely fashion has proven to be more challenging. This is where the focus on last mile delivery originated.
- 5. Changes in the Retail Landscape – e-Commerce Online orders are expected to reach $1.35 billion by 2018, an increase 28.8% from 2013.
- 6. Changes in the Retail Landscape • Due to the expected 28.8% increase in online sales, retailersmust prepare for traffic fluctuations to online sites and guarantee that delivery networks are prepared for these larger order volumes. • Most retailers have continued to partner with primary delivery channels, large parcel carriers UPS, FEDEX and USPS to get products to consumers. • These traditional methods have not proven successful in all geographical areas, causing some transportation and logistics providers to develop new and innovative delivery solutions.
- 7. Leading Last Mile Delivery Methods
- 8. Last Mile Delivery Channel Evolution • Retail giant Amazon was one of the first to offer expedited two-day direct to consumer delivery on a large portion of their inventory. For many consumers this is now a requirement rather than a bonus. • In an attempt to accommodate the need for faster shipping, changing regulation and infrastructure limitations, transportation & logistics providers have begun to research and offer alternative delivery solutions including: • Click-to-collect locations • Drones • Robots • Local regional delivery services • Uber delivery • And more • Advancements such as these help to bring products closer to consumers, increasing the flexibility and adaptability of distribution networks.
- 9. The Future of Last Mile Delivery
- 10. Conclusion • The retail order fulfillment environment is constantly changing, forcing retailers and transportation & logistics businesses worldwide to think outside of the box. • This new way of thinking has vastly improved last mile delivery options for consumers, providing them more delivery choices designed to fit their varying needs. • The evolution of last mile delivery will have to continue if retailersand their logistics counterparts want to keep up with the increasing popularity of omni-channel retailing.