Digital shopping has boomed over the last few weeks, with particular focus being on groceries and essential items that have not been restricted in their respective countries. Companies whose primary focus is on non-essential products have pivoted their attention to essential products, services and operations to remain relevant and somewhat profitable during this time.
One of the largest changes in eCommerce and online services has been in last mile delivery as well as demand forecasting. In fact, in recent research, most retailers have stated that last mile delivery has been impacted more than any of the other functions in the company, with demand planning and forecasting coming in a close second. We took a look at how companies globally have adapted their last mile strategy during the Coronavirus pandemic, and what steps you can take to remain relevant during this time.
In order to understand what steps companies have taken to become more agile, we need to take a look at the trends that have been noted in the last few weeks. Due to the significant increase of online orders and home deliveries, which in many cases has doubled or even tripled, the waiting time for customers has increased and more pressure has been put on stores to fulfil the orders. There has therefore been a rush for stores to creatively grow in the last mile and adapt their last line capacity to meet the demand.
Not only have stores seen the need to significantly increase capacity within the workforce, but also adapt their processes to be more agile. In the case of non-essential stores, there has been a significant surge in brand adaptation to meet the restrictions, with many changing their offering to delivering essential goods. There has also been an increase in two or more brands partnering to be able to function by combining their offerings during this time, as well as including a charitable element to their brand. Let’s take a more detailed look how stores have practically adapted to meet the new pressures.
With more orders comes the need to increase the manpower to be able to handle the fulfilment of orders. In last mile delivery in particular, retailers have needed to add more people in warehouses and stores and, most importantly, increase the number of drivers. In cases where last mile has not been automated, especially in warehousing, more staff have had to be pushed in to meet demand.
Retailers have had to creatively solve these staffing problems quickly in order to get drivers on quickly. Not only has this been essential to meet the increased demand, but also to replace drivers and staff who have gone off sick or who have needed to self-isolate. Stores have been
using methods like using volunteers, hiring laid off staff from other industries or partnering with hailing or logistics services like Uber or Bolt to meet the unprecedented demand.
As mentioned, home deliveries have increased steadily over the last few weeks, with each customer having their own expectations, demands and even restrictions when it comes to ordering. In some cases around the world, demand has increased so much that the waiting period for groceries has increased to two weeks. Other problems have arisen as in the case of older people who have been ordered to stay at home and are usually less tech savvy and simply do not know how to order online.
Brands have had to rapidly innovate for these types of customers by including a telephone service or allowing email orders to be received. There have also been cases of retailers creating subscription services to deliver scheduled baskets which are packed with the staples and are delivered at a fixed time each week.
Many retailers have found that it is vital to control customer demands through transparent and informative communication. If the waiting period is longer than usual, retailers are flagging that on their websites in order for customers to have realistic expectations and to alter orders if necessary.
The massive shift in volumes has forced companies to drastically rethink their last mile delivery strategies. Several new initiatives have been established, including the balancing loads between networks. In this case, partnerships have been established where low volume companies have taken over some volume from the high volume companies.
A number of retailers have also offered a click and collect service where they do not need to enter the store and the interaction with staff is drastically reduced. Payment is made online and delivery costs are scrapped from the purchase. Lastly, retailers have had to rethink route and schedule optimization and go beyond their normal route planning. Not only do they need to reduce the amount of time a driver spends out on the road, but they need as many deliveries to be made on one route as possible. Last minute changes during the delivery also needs to be accounted for and this communication has been prioritized.
The last, but possibly most vital aspect of the evolution of last mile delivery is the safety aspect. Stores have had to consider both the drivers and the customers safety during this time. Most retailers have moved to offer a contactless delivery option due to the spike in requests. This has
come with several logistical processes to make sure it is as seamless as possible. In order to reduce the amount of interaction, retailers have enforced:
With the continuation of lockdown, and the expectancy that restrictions will be kept in place globally for the foreseeable future, retailers will have no other choice but to adapt. It has been forecasted that these strategies are the mere tip of the iceberg and within the upcoming months, most stores will be offering personalized, agile last mile delivery services to cope with increased customer demand.