Because of the worldwide pandemic, shoppers’ behaviour has changed and shifted towards online purchases. According to IBM U.S. Retail Index, digital shopping has been sped up by roughly five years. The question if such growth will be long-term remains still unanswered, but we can presume that it will, as eCommerce growth has also moved other industries up. Last-mile logistics is among the most affected ones.
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In simple words, last-mile logistics is the final product’s journey step of the long delivery process from a manufacturer to a customer. Its primary aim is to reach the end-customer as soon as possible. On the other hand, end-customers have the exact expectations – 66% of millennial shoppers say that they want eCommerce companies to provide the 1-hour delivery option in metropolitan cities. However, their habituation to free deliveries is the outcome of last-mile delivery being the highest cost in the overall supply chain. We all know that there is no free lunch, and retailers have to eat up the free delivery cost in the end. The customers were yet so demanding that they could eat up the retailer alive. Thus, a lockdown shifted their expectations to another side. Free deliveries are not that important anymore. Convenient deliveries are on the rise, followed by free returns as e-shopping has become one of the pleasant outcomes left by the lockdown.
Things To Consider About Deliveries In 2021
While the coronavirus crisis hit hard, it has also raised many opportunities for improvement. In terms of eCommerce deliveries, they are very clearly seen. First, speed of delivery and higher customers’ expectations. If previously a few days long deliveries were considered to be a norm, now it is not.
Same-Day Delivery, Next-Day Delivery… Convenience Is King
The current rise of same-day deliveries are expected to rocket even higher and reach a 25% market share by 2025. All last-mile delivery businesses are in the public eye, as many people have to use such services now. Therefore, the more different delivery options a company can offer, the more appealing its service is. Modern customers want to choose on their own – same-day delivery, next day delivery, click and collect (might not be an option during a lockdown), parcel machines, redirection of delivery if the delivery address has changed, or rescheduling if the person is not at home. In 2016 Oasis Commerce stated that 59% of online customers abandon their checkout process if they do not find a suitable delivery option. There is no doubt that the number is much higher in 2021. To be relevant for a shopper, eCommerce businesses should be very flexible and invest in various delivery options. The lockdown is a golden opportunity for online business, but you can make it or break it.
Product returns are an often neglected part of the eCommerce business. It is a bold statement, but returns have been a headache for many eCommerce businesses all the time. On average, 20% of bought items online are returned. This number can vary depending on the season and the product, but it’s still a big part of eCommerce. While many online stores are trying to combine the best return policy and have as little costs as possible, their customers want the same – cheap and convenient return process.
According to Walker Sands (2018), free shipping would convince 79% of online shoppers to buy a product, and 54% of them state that free returns would have the same impact. The importance of free returns was noted in SearchNode’s eCommerce survey report, too.
While free returns can be expensive for the business, it is crucial to calculate if it is worth the cost. Amazon, Walmart and other huge brands simply refund and let the customers keep the products if they are inexpensive or return shipping fees would be too high. Returns became a hassle for both companies and customers, so if your evaluation shows that returns can become refunds, simply do it.
On the other hand, the returns process is a piece of a giant puzzle. The products come back to fulfilment warehouses, are repaired, repackaged, discounted and only then can put back in stock and re-sent to other customers. Sometimes a company’s policy does not allow it, and returns simply turn into waste. Or donation. Or pile up in the fulfilment warehouse until the better days. Even if returns seemed scary for many eCommerce companies, it wouldn’t go away. Return rate will rise together with sales, and it is just an object of successful supply chain management.