Last Mile Logistics and Customer Experience

Stephen DeAngelis

September 10, 2019

Today’s consumers can be characterized as persnickety — that is, they require a particularly precise or careful approach. Persnickety consumers expect a great customer experience when dealing with brands and retailers. Staff members at CIO Review write, “Customer experience is defined by interactions between a customer and an organization throughout their business relationship which can include awareness, discovery, cultivation, advocacy, purchases, and service.”[1] Part of that service is delivery of a product — often referred to as last mile logistics. Adam Fields (@afields), founder and CEO of ARTA, asserts, “The last mile, defined as the movement of items from a transportation hub to the final delivery destination often residential, is often the most challenging, costly, and technologically deficient portion of the delivery process.”[2] The last mile challenge, however, cannot be given short shrift because it is the last opportunity to please consumers. The CIO Review staff asserts, “Digital consumers demand and expect a brand to exceed their expectations every time they deal with a brand. The customers have a wide array of choices when it comes to choosing the right product to buy and would always go with the best in the market that fits their budget. Delivering a remarkable customer experience (CX) is crucial for a business to survive in this age of digital transformation.” In other words, the last mile and customer experience are inextricably connected.

The delivery economy

Josh Fisher (@TrucksAtWork), Technology Editor at Fleet Owner, is so convinced the digital path to purchase, the last mile, and customer experience are inseparable he agrees with a report from Project44 that asserts we are experiencing a “delivery economy.” He explains, “The rise of on-demand delivery apps and free-shipping has changed how consumers shop and raised expectations for deliveries.”[3] The report, entitled “The Delivery Economy and The New Customer Experience,” found, “85% of marketers now say that delivery is moderately to very important to their brand and customer experience.” The report states, “Whether it is ordering dinner via Grubhub, curbside pick-up for household items at Walmart, or Amazon Fresh’s store-to-door grocery delivery, companies are increasingly expanding their offerings to include services that bring products directly to consumers.” Jett McCandless (@JettMcCandless), founder and CEO at Project44 observes, “We find it very telling that consumers give the same weight to delivery as they do to the price of a product in their customer experience.”

Making the last mile experience a differentiator

Fields asserts, “As more and more consumers use e-commerce to order and ship everything from medicine to artwork, the shipping and logistics sector has to move to making last mile a strength and not a setback.” He adds, “Not only do last mile delivery costs make up a substantial portion of the total freight, but most delivery networks aren’t built to handle the increased customer demand for door-to-door white-glove service. Accompanying the growth of widespread e-commerce usage, customers now make purchases with the expectation that their shipping experience will be quick and cheap, with updates communicated regularly.” White glove service hearkens back to slower times when doormen, bellhops, and sommeliers greeted guests wearing white gloves. Last mile delivery can be a bit grittier than those services, which is why Capgemini analysts call last mile services “beige glove” services.

Since home delivery is the last opportunity for companies to impress customers, Jeff Hughes and Charles Schreiner, digital operations consultants with Capgemini Consulting, believe “beige glove” service will be more prevalent in the years ahead. They explain, “Beige-glove services could entail things like guaranteed delivery by drivers who consistently maintain a high customer-satisfaction (CSAT) score, addressing the customer by name, helping with assembly and installation, providing instructional demos, or other services tailored to the wants and needs of the target demographic of a brand.”[4] Such services obviously don’t come cheap; but, as baby boomers take advantage of e-commerce in their later years, such services may actually prove to be profitable. Hughes and Schreiner conclude, “We see an emerging trend whereby high-value brands make significant investments to take back control of last-mile delivery, and other crucial aspects of the customer experience.” Fields insists, “A few simple steps can ensure the Last Mile is the best mile for sellers, e-tailers and ecommerce sites.” Those steps include:

1. Widening the gap between your logistics services and others. Fields explains, “Offer a wide range of services to satisfy the client. This may include custom crate fabrication, specialized installation, assembly, placement, debris removal, and managing customs formalities among others.”

2. Controlling costs. Beige-glove services aren’t cheap so you need to price them differently but make the extra service worth the cost. Fields writes, “Meeting the expected level of service through professionalism, safety, and dedication is fundamental for the longevity of the relationship with the customer. The catch is to be able to provide it in a cost effective manner.”

3. Knowing your customers. According to Fields, “Managing consumers expectations has always been one of the challenges of the logistics sector. Understanding consumer demand and being ready to adapt as a company is critical in the expansion of Last Mile as a merchant.”

4. Streamlining strategically. Fields suggests, “Leverage innovations in technology to streamline and automate processes. Today, technology helps us better service clients according to their preferences. Introducing technology to an industry that has focused mostly on operations can lead to clearer communication between buyers and sellers, a more responsive and personalized experience for the client, and a more streamlined process for the supply chain.” Cognitive technologies, like the Enterra Supply Chain Intelligence System™, are benefiting the supply chain in a number of ways.

5. Anticipating the next mile. Fields writes, “Last mile emphasizes the customer’s vision of the company. It triggers post purchase behaviors, reinforces overall satisfaction, and embeds the perception of the company in the mind of the customer. Their point of contact with their Last Mile agent becomes representative of the company as a whole, and can set off the loyalty loop that encourages them to continue to use our services in future purchases.” In fact, some analysts have argued the last yard, not the last mile, should be the focus of great customer experience.

Fields concludes, “The key to making the Last Mile a strength and not a setback is twofold: providing a highly professional in-person customer experience, such as offering friendly faces, trustworthy personnel, knowledgeable providers, and efficient service as well as utilizing intuitive, strategic technology to understand what services clients expect, provide strong communication, and become a reliable source for logistics in the global supply chain.” Fisher adds, “[The Project44 study found] 56% of marketers cite delivery and transportation companies and supply chain/shipping departments (47%) among the top three stakeholders to deliver the best customer experience.” Brands and retailers need to understand the people involved in last mile delivery represent them for good or ill.

Footnotes
[1] Staff, “Why Customer Experience Strategy is Important,” CIO Review, 1 February 2019.
[2] Adam Fields, “Last-Mile Logistics: How Sellers Can Make It a Strength and Not a Setback,” Inbound Logistics, 16 May 2019.
[3] Josh Fisher, “Delivery economy becoming core of customer experience,” Fleet Owner, 12 August 2019.
[4] Jeff Hughes and Charles Schreiner, “Delivery: The Last Face-to-Face Touch Point for Brands in a Digital World?” Supply Chain Brain, 15 June 2018.