March 28, 2024

Master last-mile delivery: cutting costs in E-Commerce

The journey of a product from the warehouse to the customer’s doorstep, known as ‘last-mile delivery,’ holds the power to define your customers’ online shopping experience. Research highlights that last-mile delivery costs account for 41% of overall supply chain costs. What other elements should put strong attention? Let’s explore the key aspects that e-commerce retailers must consider to enhance their last-mile delivery solutions.

Top things e-commerce retailers should consider in last-mile

1. Delivery costs

Last-mile delivery is the biggest cost driver in the supply chain, accounting for 41% of overall costs, followed by sorting(20%) and parceling(16%). Last-mile delivery costs include labor costs, fuel, vehicles, administration, customer communication, and reverse logistics costs. Today, many retailers absorb a portion of costs, offering customers lower delivery charges than the actual expenses to enhance customer satisfaction and maintain a competitive edge.

2. Supply chain security

Retailers must ensure that products move safely and efficiently from warehouses to customers’ doorsteps. Supply chain security includes physical security and software cybersecurity. To mitigate potential threats, retailers should implement risk management strategies covering all external suppliers, vendors, logistics, and transportation processes.

3. Delivery service coverage

Expanding delivery service coverage can impact an e-commerce retailer’s market reach and customer satisfaction. Offering extensive coverage and all-in-one delivery solutions can differentiate a retailer from competitors. However, this expansion needs to be balanced with cost-effectiveness and efficiency. Partnering with regional delivery services can optimize last-mile logistics without escalating costs.

What your customers want from last-mile delivery?

Consumer expectations are evolving. In France, the current state of last-mile delivery has left consumers wanting more, as evidenced by the low Net Promoter Score of -29 for delivery services. The top causes of dissatisfaction are high delivery costs, the unavailability of same-day delivery, and late deliveries.

 Consumer opinions on last-mile delivery.

Furthermore, 73% of consumers said that receiving the delivery in a convenient time slot is more important than receiving it quickly; only 19% of retailers consider this a top priority.

How to optimize last-mile shipping costs and delight your customers

From both retailers’ and consumers’ perspectives, cost is the top priority in last-mile delivery. The challenge for e-commerce retailers is to balance the economics of offering competitive delivery fees while maintaining profitability. Here are some strategies to reduce delivery costs while ensuring customer experience.

  • Offer multiple delivery options: Let customers choose how fast they need their item, when to receive the item and where to pick up the item. Customers can select an option that balances their need for speed and location with their willingness to pay, making them feel in control.
  • Go for sustainable delivery´╝Ü Implement eco-friendly delivery methods, such as electric vehicles or bicycle couriers. Utilize advanced route optimization software to plan the most efficient delivery routes. These actions can lower operational costs like fuel and attract environmentally conscious consumers.
  • Implement auto-dispatching: Invest in technology solutions like real-time tracking, automated dispatch systems, and customer communication tools. These can streamline operations and reduce manual errors and costs.
  • Foster partnerships and collaboration: Joining forces with other businesses can lead to shared delivery networks and logistics resources, reducing costs by polling resources.
CIRRO Parcel Last Mile Delivery

Consider leveraging CIRRO Parcel as your go-to partner for last-mile delivery! Empowered by our extensive Delivery Services Partners network, efficient sorting centers and IT integration, we provide you with cost-effective delivery services across main areas in France.

By choosing CIRRO Parcel today, you benefit from the ease of single pick-up, sorting, seamless integration, route planning and door-to-door distribution, all from a single source!