Same -day delivery has evolved exponentially in recent years, especially with the outbreak of the pandemic that multiplied the number of consumers who turn to ecommerce.
According to the study «Online purchases in Spain. Edition 2021» prepared by the ONTSI (National Observatory of Technology and Society), the aspects that Internet users value the most when they buy online are free shipping (74.4%) and delivery time (61.1%).
Another project that studied the effect of expedited shipping on a US e-commerce company selling household products found that expedited shipping can lead to 25% to 46% more sales , depending on the degree of product exposure in ecommerce.
The data shows that, while the volume and expectations of customers who make purchases online continue to increase, the delivery experience has become a competitive differential for those companies that want to develop their electronic commerce.
To meet these expectations and streamline the same-day delivery process, supply chain managers need to update their last-mile logistics strategy.
What is same day delivery?
Same -day delivery refers to the possibility that more and more e-commerce companies offer their consumers to receive their online orders within 24 hours of their purchase .
This compromises last mile delivery, which is the logistics service of the last link in the supply chain. That is, the journey from when the delivery person picks up the product at the distribution point, until it is delivered to the door of the final customer.
It is a critical factor in the logistics process, because the customer's buying experience is closely linked to their shipping experience . Therefore, distribution efficiency can determine whether that customer buys again in the same store or not.
The challenges of same-day delivery
There are numerous challenges businesses face when offering a same-day delivery service. Here are four of the main challenges to consider:
1. High costs
The cost of last mile delivery can represent up to more than 50% of the total cost of the shipment. This is associated with moving expenses such as fuel and carriers' wages.
In turn, the shortage of couriers puts even more pressure on door-to-door delivery providers, demanding salary increases and more benefits to maintain their fleet.
Some e-commerce companies usually charge these costs to the end customer to minimize their impact, but it is a strategy that has proven ineffective, especially in a competitive environment that is increasingly moving towards the “free shipping” option .
Fortunately, there are now solutions like VONZU that offer functionalities to be able to manage these limited and expensive resources, in an efficient and profitable way, through the assignment of delivery people to the most optimal routes according to their availability.
2. Lack of order forecasting
The lack or forecast errors of orders end up in a surplus stock , or in sales that are lost due to the lack of that stock to cover the demand . In any case, it translates into loss of profitability for the business.
By definition, forecasts are never exact. However, there are techniques and technological solutions that allow these forecasts to be optimized to better manage demand and increasingly limit the margin of error, reducing operating costs and incidents.
In order to properly control inventory and have the necessary information to make forecasts, same-day delivery requires automatic integration between order management (ERP), warehouse (WMS) and transportation (TMS) . SaaS solutions such as VONZU are easily integrated with existing management systems, using Business Intelligence (BI) to improve decision-making through the monitoring of business indicators in the data accumulated by the software.
3. Control of delivery drivers
The effectiveness of on-time same-day deliveries largely depends on optimal management of delivery drivers. In order to correct any deviation or incident in the logistics process, it is necessary to know in real time where they are, what shipments they have completed and how many remain to be carried out.
There are too many unforeseen events that can cause delays in the delivery of packages on the same day . And in areas such as restaurants , a difference of minutes can be enough to erode the customer's shopping experience.
The only way to face this challenge is to have the appropriate technology that allows drivers to be geolocated and clearly visualize the status and evolution of their shipments. With the VONZU , the furniture company BoConcept was able to control the location and route of its drivers in real time, as well as the status of its orders with any incidents that may have arisen, anticipating decision-making to deliver its orders on time.
4. Route optimization
Last-mile logistics demand efficient route optimization same-day delivery . This means finding the best route to transport the package from the distribution point to the final recipient.
Optimizing routes to make more deliveries in less time has a double benefit. For the company, it speeds up the service and makes its business more profitable. For the customer, it improves their reception experience by guaranteeing the traceability of shipments.
Given the growing volume of urban distribution of goods, without automation of this process it becomes practically impossible to manage a shipment on the same day, since finding the best route depends on multiple variables and possible unforeseen events.
VONZU offers a powerful route optimization tool that calculates the route that the delivery person must take with the registered shipments, in order to dispatch the largest number of deliveries in the shortest possible time.
To say that the pandemic has accelerated the development of electronic commerce and online sales is no longer news. The point is that it is a process in continuous evolution that challenges the logistics sector, but also offers a great opportunity.
We have outlined just four same-day delivery challenges that companies must address to build competitive and sustainable businesses . And we saw how for each of these challenges, there is a solution.
With the progressive increase in demand and final consumers who demand immediacy in deliveries, while opting for products with free shipping options, many companies find it difficult to define a profitable business model .
What is the biggest challenge facing your company's logistics today?
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