Industry News

Key Issues Retailers Face in Managing the Last Mile

by Rohan Duggal
The landscape of retail has changed dramatically in the last 15 years, where added services such as deliveries are no longer a differentiator but a prerequisite. We now live in a world where individuals have the ability to access data about one’s products and store before they’ve even stepped inside. The landscape has shifted dramatically as far as priorities. Platforms such as Yelp, third-party demand generators and social media have gotten more attention than ever before. It’s important for a retailer to keep up with the conversation, and most importantly, be aware of what’s going on in the market. 

More so than ever before, retailers are required to provide customers a convenience and connectivity that has never existed before. Platforms like Amazon and Google offer cheaper pricing and the ability to get products to customers within the day, which has become a major priority. By being able to provide a product cheaper and more conveniently, Amazon has been able to grow exponentially. How’s a mom-and-pop retailer to compete? 

Retailers that can deliver, especially those that can meet local demand faster and more efficiently than Amazon, will thrive. Depending on the neighborhood one lives in, the concept of convenience can be very important to a buyer. A lot of people will buy from their local grocery store because it’s a few blocks away, rather than traveling miles to a larger or cheaper shop. This is typically the case in a metropolitan city. In a suburban neighborhood, shopping around for the best deal would not necessarily be deterred by distance, as people are prone to driving; however, some customers would prefer to not shop at all and have the ability to have access to products from their couch.

Delivering product with the click of a button leads to reaching more customers, creating a higher rate of customer loyalty and generating more business. Delivery services are really an incredible mechanism for retailers to grow. The cost of delivery in New York City next year, however, is $16.31 an hour.

Key issues businesses have:

Most stores have employees who do more than their job description, especially in high-volume shops where workers are likely to also run out for deliveries. It can be an overwhelming experience.

Likewise, the delivery guy might not be the most reliable employee. Delivery workers stay at a retailer anywhere between three and six months before they leave or are fired. This becomes harder when a retailer might have 35% of sales come through delivery, making those workers more valuable than some of the sales associates because they can fulfil the demand.

Enough delivery workers need to be available and properly managed, which can be difficult in bad weather. Delivery workers that don’t show up to work because they are sick or having trouble getting to work in bad weather hurts a retailer because the delivery times will take longer, which can anger customers.

Retailers using a third-party platform might feel pressure to get deliveries to their customers in 40 minutes or fewer. Deliveries through a third-party platform can be addicting because stores receive additional revenue; however, those customers belong to the platform. If that platform raised its costs or kicks you off the platform altogether, those customers are unlikely to continue shopping with you.

Store owners entered the industry to sell what they are passionate about. When deliveries become a big priority in one’s business model, retailers need to become dispatchers and track those workers, a hard task. Store owners are unaware if a delivery worker runs personal errands on the company’s time. Delivery workers are also unsure if or how they will be tipped, so there isn’t an incentive to really hustle on deliveries.

With cost, liability, efficient employees, time commitment and pressure from third-party platforms acting as deterrents, companies are thinking twice about offering delivery services. There is a solution, though: a third-party platform that arranges contract workers to pick up products at a cheaper rate than an in-house employee and are well equipped to get those deliveries done. 

Third party platforms, like EpiFruit, are offering retailers the ability to find a local courier in the area to do deliveries for businesses. The open-market platform allows businesses to create minimum bids on their deliveries, with delivery partners choosing to take on that task. It gives the business ample area workers to run deliveries and potentially drive down the price. The app gives retailers the ability to track the delivery worker through the process, along with the ability to message and call them if necessary.

Retailers only pay for the delivery rather than the delivery and return, which saves store owners money. It gives retailers peace of mind to click a button and let the deliveries happen without much thought. 

Author Rohan Duggal is Co-Founder of EpiFruit.

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