Big & bulky last-mile delivery - how hard could it be?
By FarEye | October 13, 2022
The Last Mile
The last leg of the supply chain that transports products from various fulfillment methods to the consumer is an important, customer-facing step that can make or break the consumer experience and thus the company’s reputation and future sales. Not only is the last mile the most crucial to the consumer delivery experience, it is also the most expensive. Last mile costs can be significant, making up 53% of total shipping costs.
So we’ve got the most expensive leg of the journey with the most exposure to the end consumer. The stakes are high here. And they are only higher when we bring big & bulky delivery into the picture. These larger, heavier and more valuable delivery items are both operationally and financially more resource-intensive to deliver. Complicating matters is that consumers who shop for bulky items like furniture and appliances expect the same fast, seamless, free and damage-free delivery as they do with smaller items like apparel and electronics.
Increasing Consumer Delivery Demands
Delivery is an important factor consumers take into consideration when judging a company and deciding whether to do business with them again. A poor delivery experience can negatively impact loyalty and image - a risk that many retailers can take. According to a survey by Digital Commerce 360, 98% of shoppers said delivery is a crucial part of their loyalty to a brand.
According to Statista’s 2021 E-commerce report, free deliveries are the top reason online shoppers worldwide choose to purchase a product. With last mile costs being so expensive and consumers demanding free delivery, retailers are forced to raise prices or shoulder the delivery costs themselves, eating into their margins which for many, do not have much room for additional costs. This can be exceptionally tricky with big & bulky items and most retailers are unable to offer free delivery on these items. Amazon, the big bad guy, offers free delivery on many big & bulky items - a competitive advantage that other retailers may soon be forced to provide.
Flexible delivery windows are another important criteria that consumers evaluate before making a purchase. Gone are the days of offering multi-day or even multi-week delivery windows. Consumers want customizable, narrow window delivery options. Optimized routing can speed up delivery time, reduce delivery windows, and allow consumers to schedule their own delivery dates and times. Setting these expectations and keeping consumers informed of their delivery through accurate ETA alerts can help ensure a positive delivery experience.
Visibility is an essential part of delivery as consumers want to know when their products will arrive and be informed throughout the delivery process. 93% of consumers want to stay informed throughout the delivery process and 47% will not order again from a brand with poor delivery visibility. If a package is delayed and consumers are not informed, 69.7% of shoppers would be less likely to shop with that retailer again. Luckily for retailers, advancements in technology have made it possible for companies to provide step-by-step tracking information, and drivers can provide proof of delivery when the shipment is complete. One furniture retailer was able to improve on-time delivery rates from 89% to 98% through the use of a smartphone-based, real-time delivery tracking solution.
Consumers not only want free or cheap shipping, but they also want a delivery experience that is flexible, adaptable and visible.
Big & Bulky Delivery
Bulky items require additional tools and equipment, such as lift gates, dollies, and moving blankets - items that are not needed for most traditional deliveries. Labor also needs to be specialized, at times requiring multiple couriers to be able to move heavy appliances up 3 flights of stairs, as well as install items where needed. Consumers want this and retailers are providing it. A recent report from Fidelitone highlights that 86% of furniture retailers currently offer ‘white glove’ delivery service, where delivery is made to a consumer’s room of choice, unpacked and assembled if required.
Due to the difficult nature of big & bulky last mile delivery, many retailers have outsourced the last mile to third-party logistics companies who are better equipped to handle big & bulky deliveries. Taking advantage of this specialization allows retailers to realize efficiencies that save time and reduce costs. Although 81% of furniture retailers that use 3PL are satisfied with their current 3PL, many furniture retailers have opted to make last mile deliveries themselves, claiming that they can better ensure consistency of service levels and better control team training and the brand experience.
All of this is coming amid a surge in e-commerce for big & bulky products as 88% of furniture retailers aim to increase their e-commerce sales in the next 5 years. But do furniture retailers have the technology to successfully meet increasing consumer delivery demands? Perhaps not.
Forty-six percent of industry executives say that their delivery technology either needs improvement or needs immediate and significant improvement.
Wrapping it All Up
The last mile is difficult. The last mile for big & bulky items is even more difficult. Increasing consumer demands in a competitive retail environment are creating an area of the supply chain that is ripe for technological advancement. Retailers and carriers that are unable to adapt might be left in the dust.
Big & bulky last mile delivery may look a bit different tomorrow than it does today - a potential headache for retailers and carriers in the near term, but a boon for consumers worldwide.