RetailEXPO: Breaking down last mile challenges and opportunities

Retailers’ attempts to compete with Amazon over the last mile and cash in on Black Friday have led to a major logistics headache. That was a key takeaway from a discussion panel at RetailEXPO yesterday, involving AO.com and Mamas & Papas.

With the introduction of next and same day delivery, one hour slots etc, and the likes of drones and robots being piloted, the space is getting both increasingly innovative and complicated. Overly complicated, it could be argued. AO, which bought a logistics business so it could try innovative things in-house, offers next day but very few customers actually use it.

“They like the idea but often have to factor in taking the day off work, so that sense of urgency isn’t there,” said Anthony Sant, Managing Director, AO Business. “Nominated days is the most popular option. Also, when it comes to same day, companies who offer two hour slots rarely meet their targets, leading to unhappy customers. Give a promise you can actually meet.”

Some Mamas & Papas customers, meanwhile, place orders months in advance of delivery, so ultra fast options are off the table. “Our customers do research and place orders at certain stages of the pregnancy lifecycle. Our challenge is communicating with the customer on the day of the order,” said CIO Chris Greenwood.

“That is where our investment has gone, into influencing carriers to deliver what we want. Be innovative, yes, but also be practical and speak with your carriers on a regular basis, don’t let them run the show. I don’t think we will ever get to same day delivery.”

The Amazon effect

Amazon has driven significant advances in delivery, but it has also arguably created as many problems as it has solved. Too many retailers are making promises they can’t keep, simply because they feel they must compete with the US e-commerce giant.

Ultimately, whilst innovation is rife, much of it is a case of ‘tech solving problems that don’t exist’. And whilst there has been progress in some areas, there have been backward steps elsewhere, for instance, chaotic scenes and broken promises around Black Friday.

As a result, many customers still have little faith in this part of the shopping experience. “Sometimes retailers forget the importance of the last mile,” Sant observed. “If you look at our reviews on Trustpilot, many of the good ones focus on the driver being nice and helpful. That emphasises how low customer faith in delivery must be, that it’s a pleasant surprise the driver was nice.”