Last Mile Operations: Benefits and Challenges

Digital Transformation ECommerce PipeCodes
Last Mile Operations

The last stage in the delivery process of an online purchase, also known as the Last Mile, is one of the most important stages in the online sales process, for a good customer experience, and for building a solid reputation for online businesses.

In this article, we’ll talk about the importance of the Last Mile operation in ecommerce, and good practices for optimizing this transaction.

What is the Last Mile exactly?

It is a term commonly used in the context of deliveries and transport, representing the last stage of the costumer’s journey, through the delivery of the purchased product. This process involves storage, preparation, transport and delivery, and is one of the crucial phases in ecommerce: the moment when your online store has the opportunity to impress the customer.

As it is such a significant moment for the customer, it is essential to guarantee that they receive their purchase in perfect condition, with a good presentation, and preferably, before the stipulated deadline (to exceed expectations).

By guaranteeing these basic points, you can avoid a negative experience leading to bad reviews that damage the brand, and affect new customers’ opinions.

What is the goal of Last Mile?

  1. Efficient delivery: focusing on delivering the product in the shortest possible time, efficiently and quickly;
  2. Customer Satisfaction: providing a great customer experience, including respecting deadlines, offering flexible delivery options, and guaranteeing the integrity of the product;
  3. Cost Reduction: seeking to optimize the logistics process to minimize the associated costs. Efficient routes, tracking technology, and management strategy are all helpful;
  4. Personalizing the Shopping Experience: offering personalized delivery options, such as flexible times and alternative delivery methods, allows the customer to have more control over their purchase;
  5. Market Positioning: standing out in the market by offering delivery options and reliability to consumers has a direct impact on a customer’s choice of brand.

As we have seen, the successful execution of Last Mile is essential for customer satisfaction, and ecommerce efficiency. However, several challenges can impact this process.

Challenges that can impact the Last Mile process:

  • Traffic and Urban Congestion: heavy traffic in urban areas can cause some delays in deliveries;
  • Difficulty of Access: some locations may be more difficult for delivery vehicles to reach, such as remote areas or restricted zones;
  • Variation in Climate: adverse weather conditions, such as heavy rain, snow, or storms, can have an impact on the punctuality of deliveries;
  • Theft and Damage: in areas with high crime rates, this can be a concern;
  • Returns Management: knowing how to manage returns requests requires a well-structured reverse logistics process.

Having a good strategy to overcome these challenges involves the use of advanced technology, strategic partnerships, and good operational practices.

Improving your Last Mile operations is a way to better position your ecommerce in the market, have greater cost control (there are many expenses associated with logistics and transportation), increase credibility, and provide a more positive experience for customers.

But how can merchants optimize Last Mile operations, to reduce errors and ensure quality delivery?

8 Ways to optimize Last Mile operations:

  1. Invest in real-time tracking systems: giving customers the option of tracking the status of their delivery provides transparency and confidence in the shopping experience;
  2. Use advanced technology: use technology that takes into account factors such as traffic, customer location, and efficient routes to minimize delivery time;
  3. Efficient management: keep track of stock to avoid order preparation errors and ensure that orders are delivered promptly after checkout;
  4. Delivery staff training: ensuring that the team is well-trained in good delivery practices, product handling, and customer interaction is a plus;
  5. Offer flexible deliveries: providing delivery options, such as scheduled delivery or same-day delivery, is important to meet customer preferences;
  6. Very clear SLAs: the acronym for “Service Level Agreement”, a contract that establishes the rights and obligations between contractor and contractor, to align expectations and guarantee quality standards that are relevant to you and your client;
  7. Warehouse stock strategy: depending on your core business, type of product, and logistics strategy, analyze the best way to have your stock in warehouse, whether through FIFO, FEFO, or LIFO;
    • FIFO – First In, First Out – newly arrived products in stock always go to the end of the queue, regardless of their expiration date;
    • FEFO – First Expired, First Out – use the product with the earliest expiration date first;
    • LIFO – Last In, First Out – the first product to be used should always be the one that arrived the shortest time ago;
  8. Customer feedback: requesting and analyzing customer feedback on their delivery experiences helps in the process of improving and adjusting operations.

Last Mile operations are the last impression of the customer’s shopping experience. Preparing to provide satisfaction and a great shopping experience helps to build loyalty and attract new customers to your ecommerce store.

And you, have you already optimizing Last Mile operations?