In 2022, e-commerce sales surpassed $1 trillion for the first time. As e-commerce volume and sales continue to grow, customer expectations around how they place and how quickly they receive orders evolve as well. McKinsey found that 46% of consumers would abandon an online shopping cart due to longer than expected shipping times. Consumers also have expectations around their user experience—whether it’s tracking their order in real-time or communicating with the delivery driver.
Delivery has become table-stakes for many customers, which means retailers must adapt their capabilities to meet customers’ expectations. But building and scaling local delivery can be challenging. Buying or renting vehicles, hiring delivery drivers, managing costs and delivering on-time, while also creating a good user experience, is extremely difficult to do, especially at scale.
So how are retailers solving this problem? Through partnerships!
With logistics, similar to other areas of business, you don’t know what you don’t know. Retailers of all sizes can benefit from choosing the right partner for local delivery. It may not be realistic for a retailer to build their own delivery fleet, so selecting a partner with deep retail and logistics expertise can be a value add. So, what should retailers look for?
Choosing the best local delivery provider
When selecting a local delivery provider, retailers should consider factors such as:
- Coverage: Does the provider’s coverage area reach your current and future customers? A wider geographic area enables delivery to your customers and simplifies vendor management.
- Capabilities: What range of products and order types can the provider handle? Think of various weights, sizes, and shapes of products.
- Cost: Can the provider offer a rate that works for your business and clients? How does price change as you scale?
- Capacity: Can the provider scale with your business as you grow? Will your future volume levels be manageable?
- Service: A provider that offers a great customer experience will impact your net promoter score (NPS) and customer lifetime value (CLV) by facilitating repeat business.
Doing these five things well is challenging, so it can be more cost-effective and efficient to work with partners that specialize in last-mile delivery to handle this essential value-add to their business.
To launch local delivery, many retailers pilot the service in a limited area or select stores/locations and then roll it out nationally as it gains traction and the concept is proven. Starting small allows retailers to develop the required processes to facilitate delivery pick-ups, ensure proper hand-off, maintain chain of custody, and eventually complete doorstep delivery to the customer.