Dr. Pradeep Salgaonkar speaks about timely delivery of products which is the most crucial stage in online business
Some of us must have experienced, in this world of online retail, that on-time delivery is an issue and many times, especially when the consignment is urgently required, the delivery is invariably delayed, thus causing hardships. Most of the time, this is due to sheer negligence and/or lack of willingness on part of the people involved in delivery, to ensure that consignments reach their designated customers on time.
With advancements in technology and digitisation there has been a spurt in online businesses and every other person is trying to get into online business mode. Retail business is a major player in this category and most brick and mortar operators or manufacturers are trying to exploit this channel by getting online in some way or the other. However, these online players, with no exception of big or small brands, are not short of problems when it comes to serving customers in the last mile, which ultimately leads to unsatisfied customers.
Mr. Naik, my next door neighbour, received the consignment of fresh grapes from his friend in Nagpur (a farmer trying to sell his produce online), four days after the scheduled date of delivery. The result was that the majority of the grapes were spoiled and in damaged condition due to mishandling of the package and rising temperature. The package was dispatched from Nagpur on a Saturday and was scheduled to be delivered in Goa to the customer on Monday. The package reached Goa on time as scheduled, but was lying in the warehouse of distributor situated just about one kilometre away from Mr. Naik’s house, which he learnt about after receiving the delivery. The online tracking showed ‘Parcel reached distribution destination, will be delivered soon’. The helpline number given was not working and besides that no other local contact details were available. The big tag marks on the package announcing “perishable items” were of no use. The delivery boy had a standard reply ‘There is too much load for delivery. Sorry for the delay’. Who is at loss and who is to be blamed for this loss due to delayed delivery?
Yet another example is a case of a young student who was to move back to institute hostel with a new piece of a mobile handset, that was ordered online.
With advance payment made, the handset was scheduled to be delivered two days before her travel. The story repeats. The product arrived in Goa and was sitting at the local distribution point, just a few kilometres away from the customer’s house, without any clue to the customer. The delivery date lapsed and the student had to travel without the new mobile phone back to hostel. The package was delivered five days after the scheduled delivery date with standard replies from the delivery boy. The parents then had to send the package to their daughter at the hostel, through another courier service of course, incurring additional cost and hardships. Imagine the stress that the customer might have gone through. Is it worth the trouble one takes? Any form of communication indicating the exact position of the product would have enabled the customer to go personally and collect the package from the distribution warehouse. But there is no such system or any willingness to communicate with customers, especially when the delivery is getting delayed. And the result: customer is at loss and has to face hardships.
It is just not sufficient to have a unique and fantastic product. The product should reach the customer at the right time and in good condition, if you want the customer to value the product. The customer’s perceived value increases with effective and on-time delivery of products and for this, serving the last mile effectively becomes a critical factor for online retail business.
The last mile delivery is the final stage in online distribution channel where the delivery happens from the distribution hub to the door step of the customer and is normally carried out by delivery people engaged by the company. Serving the last mile is the most crucial stage in online business as it accounts for more than 50% of the total cost incurred in distribution channel of online businesses and is the deciding point of customer’s satisfaction or dissatisfaction with the brand.
This last mile delivery is the only link in the online retail distribution chain that directly connects with the customer in a face-to-face interaction between delivery person and the customer, mostly on the door step of the latter. This interaction is a critical one as it is a moment-of-truth whereby the delivery person represents the company, the brand, the business image and its reputation, and this will create a lasting memory that will stay with the customer, reflecting their overall experience with the online purchase transaction, the delivery process and emotions towards the company and brand. And, it is based on this experience with last mile delivery, that the customer will judge the company and spread positive or negative ‘word of mouth’.
Research shows that 84% of customers are unlikely to buy from a company again after they had a bad last mile delivery experience, and 98.1% of them say that effective delivery is important for creating and enhancing brand loyalty. Rather 57% of customers say that a same-day delivery will make them very happy and more loyal to a specific brand. The customers do expect a certain amount of communication from the company as regards the status of their packages. It is not sufficient to provide online tracking support, which mostly is incorrect or not updated regularly. As per available research, about 80% of online customers stated that they expect real-time tools to track their deliveries, so as to get factual status and position of the packages.
Serving the last mile is a big challenge to all online businesses. No doubt there are issues which are beyond their control. However, every online retail business should work towards serving the last mile delivery in the best possible manner to a customer’s satisfaction. One of the cost effective and sure to work strategy available with every online business is effective communication with the customer. Keeping the customers updated time and again about the status of the package and delays, if any, would help in managing customer expectations. Thus, everyone engaged in online retail business should focus on improving last mile delivery and serving the last mile most effectively.
The writer is Founder Director, Saldots Academy; corporate trainer and facilitator; former chairman of Goa Management Association. Email: pradeepsalgaonkar@gmail.com
