A year of surprises for logistics

Antonio Perini, founder and CEO of Milkman | January 18th, 2017

In the past the world of last-mile delivery, that is the last part of the delivery route of items that are shopped online, had to adapt to the needs of couriers, but is now experiencing a momentous focal shift: today, the centre of everything are customers and their needs.

This is a spontaneous and necessary change, since last-mile delivery ends its run exactly at the client’s door. According to all the latest studies, a failure in delivery is seen by the end user not so much as a mistake by the logistics operator (that is perceived as a still rather abstract entity) but as a failure of the brand or online store that sells the item. Clients who experience a delivery problem are never going to shop on that site again: they are lost customers. Indeed, a survey conducted in the USA by Dotcom Distribution has discovered that 47% of users have decided to abandon an online store after a bad delivery experience.

This phenomenon is so urgent that a giant like Zalando has decided to give its German customers the possibility of not using its logistics partner called Hermes – that was inexpensive but had very negative reviews – and instead be served by DHL.

But what do shoppers want? The list of their desires consists of five points: control, choice, visibility, fast delivery and value for money. It should be emphasized that the latter of these desires operates in stark contrast to the first four.

It’s no secret that today fast delivery and value for money are mostly concentrated in the hands of Amazon: no one has the means to beat Prime offers, i.e. deliveries in one hour at € 6.90 or two-hour time windows for free (with a subscription of € 19.99 per year).

Control, choice and visibility are, therefore, the battlefields on which last-mile delivery startups can stand out and also bring real innovation and added value. For example, all national and international trends for 2017 point out that this will be the year in which the importance of same-day could be overtaken by that of delivery by appointment.

A German survey by DHL has revealed that 78% of respondents want to be able to choose the time of delivery, while 68% also want to decide the day. The shopper’s desire for control will also lead her to ask for cancellation and rescheduling until the very last minute, possibly at no additional cost – a feature that Milkman already offers on its app.

Accenture tells us that an incredible 69% of retailers indicate time slot delivery as the most desired innovation to improve their service. In a survey sponsored by Metapack and conducted among British retailers, the adoption of time slots recorded a remarkable third place among investments that eCommerce companies see as priority, only second to better responsiveness of back-end and front-end services, and the generic need to invest in new software/technology.

Visibility is something in which not even Amazon shines – and, most likely, their recent attempt to launch a proprietary fleet are moved by this need too. To know that the package will arrive at some point during the day is of little use. Shoppers want to track it minute by minute and, as suggested by the experience of the 10,000 deliveries carried out by Milkman in 2016, even when they have chosen a one-hour time slot with constant updates that narrow down the time of delivery to 30 minutes, they ask to know exactly when we’ll ring their bell.

It’s by no chance that a small survey carried out on our Facebook page and dedicated to those who already use our Milkman app has seen users vote the integration of a map on which to follow the delivery van in real time as most desired new feature.

Control and visibility requirements extend backwards along the entire distribution chain, from a seamless checkout in store in which delivery modality, time and shipping prices are immediately visible and not only at the last purchase step.

A British study by Censuswide, on behalf of Shutl, the last-mile delivery provider owned by eBay, revealed that in 2015, 9% of respondents took holidays or illness permits from work to avoid missing the delivery of a parcel. And 18% of them are willing to leave a door or window open if no-one is home! These numbers speak for themselves.