Digital shopping is here to stay. E-commerce was on the rise prior to the massive disruption caused by the Covid-19 pandemic. One recent study found that online purchases have increased by 6 to 10 percentage points during the pandemic across most product categories.
While this has certainly been a boon to shipping and delivery companies, as well as retailers who were able to quickly and successfully adapt to the new market conditions, it also raises some new challenges - particularly in terms of last mile delivery.
Last mile delivery represents the final leg of the delivery process. Generally speaking, that means the trip the package makes from the distribution center to the recipient’s hands. This portion of the journey has the greatest impact on customer satisfaction and is widely considered to be the most important step in the supply chain. The majority of the costs associated with delivery services - up to 53% of the total cost of the delivery - reside in the last mile of the process. This is where smart lockers can make a big difference.
Smart locker solutions like Exela’s Intelligent Lockers offer a convenient solution to last mile delivery that benefits both suppliers and end consumers. Here are 5 key ways smart lockers can improve the last mile delivery landscape.
One of the clearest examples of how lockers can impact the standard delivery process is by immediately reducing the number of necessary stops for delivery drivers. Delivering to individual addresses is far from the most efficient shipping option, and often means sending out partially-full trucks, which results in a greater number of delivery vehicles on the roads than necessary, driving up costs. If a delivery person can drop off 20 packages at one location rather than making 20 individual stops, that means shorter routes, less time spent per delivery, and reduced costs. The last mile of those deliveries becomes considerably more efficient.
Reducing Failed Deliveries
While most people have their orders delivered to their homes or offices in hopes of facilitating a smooth handoff, many are at work or otherwise out during normal delivery hours, and may not work in a standard office where they can have things sent to them through the company mail room. Between these common situations, simple miscommunications, and occasional thieves stealing packages that don’t belong to them, failed deliveries can be a big problem in last mile delivery.
In fact, one recent study found that 65% of retailers said that failed or late deliveries are a significant cost to their business. This is because many of the most common ways businesses deal with failed deliveries can be very expensive, especially when a high volume of deliveries don’t reach their recipients. Whether refunding the delivery charges to the customer, canceling the order and refunding the entire purchase, offering discounts on future orders, or attempting redelivery at a later time or date, the business loses money. And considering 1 in every 20 online orders is not successfully delivered on the first attempt, those costs can really add up.
Smart locker solutions like Exela’s Intelligent Lockers can go a long way towards eliminating the risk of packages being undeliverable and the need for costly additional attempts.
Making BOPIS Easier
Buy online, pick up in store (BOPIS) has become an increasingly popular option for digital shoppers who don’t want to wait several days for shipping, but also don’t want to go out to the brick and mortar location only to find out an item is out of stock. Solutions like Intelligent Lockers essentially put the delivery aspect in the hands of the purchaser. They select their items and check out electronically from the comfort of their home. An onsite employee can then retrieve those items and secure them in a smart locker. At this point, the customer is alerted that their order is ready for pickup, along with the locker number and the code, PIN number, or link to unlock their particular locker when they arrive.
Improving Security and Sanitation
Perhaps the biggest way the Covid-19 pandemic has impacted last mile delivery is the greater interest in contactless and touchless delivery options. Many people want to avoid face to face drop offs and pickups in order to help prevent the virus spreading. Smart lockers are an excellent solution to ensure packages reach the right people without an actual physical handoff.
While the CDC says that the risk of spreading Covid-19 on the surface of a package appears to be low, they do still caution that the virus can survive on the surface for some time. Many people are opting to be extra cautious, and delivering one package per locker helps cut down on the potential interaction between non-recipients and packages. This also allows the delivery person to drop off packages without risking them being stolen or damaged.
Mobile apps that interface with the lockers reduce the number of touch-points that may need to be sanitized between uses. BOPIS applications of smart lockers can also enable social distancing efforts by reducing the need for physical lines with staggered pickup notifications.
The impacts of the Covid-19 pandemic will be felt for many years, and in order to maintain growth and competitiveness, businesses need to adapt to the new normal. The growth in online shopping paired with the general aversion to in person interactions has complicated last mile delivery, but innovative solutions like Intelligent Lockers can help companies surmount these new obstacles and deliver value to their customers.
Check out how Exela’s Intelligent Lockers can be applied to your business.