- Lack of visibility
Visibility in the delivery process is the most critical prerequisite for establishing the loyalty of the customer. Buyers are interested in knowing the location of their product or package and when the product will reach them. This is the reason for the tracking codes offered by some retailers to allow customers to gain visibility. However, despite these codes, this is not enough. Customers demand real-time visibility and information about their packages. This is a challenge because it means retailers must provide information in real-time.
- High delivery costs
The last-mile delivery tends to be expensive for customers and retailers. For retailers, setting up an infrastructure that supports the timely delivery of items can be expensive. Furthermore, shipping and logistics companies must set aside money for complex shipping routes, compensate for failed deliveries, pay drivers and cater for extra stops along the delivery routes. For the customers, it is a different thing altogether—high costs of delivery result in the rise in abandonment rates in carts. According to research, 55% of customers abandon their shopping carts due to high shipping costs. This is another challenge that must be addressed in retail.
One of the key challenges in modern supply chains is unpredictability. When a retailer packages goods and dispatches them for delivery, many things can occur on the way that can disrupt the last mile. Some of the key challenges to the last mile delivery are traffic, bad weather or mechanical problems with the vehicle. Therefore, retail firms are forced to develop contingency plans and ensure seamless communication between teams and customers. Retailers need to have a plan of action at hand so that when there is a problem, you can dispatch the needed solution faster and in time.
- Inadequate route planning
Route planning can be as challenging as much as it can confuse. It consists of various variables that must be taken into account. Inadequacy in route planning causes delays in deliveries and increases the frustration of customers and high costs. This problem can be solved by proper route optimization. This reduces costs incurred due to late deliveries and positively impacts the arrival time.
Implementing the right last-mile delivery processes is invaluable and presents an excellent opportunity to adapt to the changing demands made by the customer. It also differentiates the services provided by a retailer from those of the competitors. The retailers that want to succeed with online stores must confront the last-mile delivery challenges accordingly. This means adopting modern methods, technologies, policies, transparency, and communications, which should be seamless between the company and the customers. This is not always an easy task because it can be expensive, time-consuming and challenging in general.