What is retail delivery & how it works. What are retail delivery challenges?
By Komal Puri | October 13, 2022
In today’s consumerist and globalized market, the increasing number of e-commerce enterprises are driving traditional retailers to embrace digital means of catering to their customers. The COVID-19 pandemic further threatened traditional retail and delivery models. According to the National Retail Federation's latest survey, more than 50% of consumers have ordered products online that they would typically purchase at the store.
The pandemic compelled retailers to adapt their business models and inculcate technology in order to sustain operations. Retailers tend to create value, strengthen trust and enrich customer experience by offering consistently on-time and fast delivery services. 2020 saw retailers speedily altering their delivery approach by utilizing retail delivery software in order to align with the consumers’ needs. The implementation of technology has also enabled retailers to retain customers by offering personalized options while shopping.
What is retail delivery software?
To ensure free shipping and meet same-day delivery expectations, savvy retailers are embracing advanced retail delivery software. Such software offers features like live tracking of delivery progress, and staying in contact with the delivery person for delivery updates, order accuracy (in terms of quantity and quality), route and capacity optimization, etc.
How Retail Delivery Works
Let’s imagine this. There is a corporate employee Jim who wants to give a retirement present to his boss this evening during a retirement party at the office premises. He calls up the nearest retail gift store to place an order for same-day delivery of a vintage vase. It initiates order fulfillment that includes everything from the sale of the product to post-delivery customer experience covering primary aspects such as:
Inventory management: In Jim’s case, that gift store must consistently maintain its inventory to ensure that the product is stocked enough to meet real-time customer needs.
Inventory Storage & Warehousing: The local gift stores must also catalogue their items in proper racks to avoid hassles while finding the product.
Receiving: The gift store receives a telephonic order from its customer (Jim). It has to sort out the order by clarifying customer preferences (vase of which colour does Jim want to gift his boss, etc.) Moreover, as Jim wants same-day delivery of the vase, the gift store has to make that order their top priority.
Packaging: In the case of a flower vase, which is too fragile, the products' packaging becomes much more critical. The gift store must rely on sturdy packaging to ensure safe retail delivery.
Shipping: The gift store should have the appropriate logistical support to enable real-time seamless shipping along with multiple payment options given to their customers.
Return order processing: If needed, the retail stores must prepare themselves beforehand for return orders if the buyer is not comfortable with the product.
Top Three Retail Delivery Challenges
Providing top-notch same-day delivery services is not as easy as it sounds; the following are three challenges that have been haunting delivery stakeholders.
1. Shipping unpredictability
One-ways, sudden road closures, traffic congestions, and natural calamities among many others pose this major last-mile logistical challenge. Moreover, as customers wish for real-time visibility of their orders with exact ETA, more often than not, local retailers cannot keep track of the current status of deliveries. Not being able to meet the guaranteed timeline leads to financial losses and damages the brand reputation.
2. Unnecessary delays
Customers’ non-availability at the location, incorrect addresses, and remote areas are primary customer-related problems that lead to unnecessary delays forcing the retail stores to make repeated delivery attempts. Similarly, retailer-related delays could also occur due to inefficient routing practices, unnecessary diversions, prolonged and unscheduled stoppages and heavy dependency on manual intervention increases delivery turnaround-time.
3. Growing delivery costs
Although more than 86% of customers are ready to pay for expedited deliveries, it still poses a challenge for most retail stores as scaling one-hour and same-day delivery volumes using traditional and manual methods pan out to be expensive and make margins thinner.
Key Benefits of Intelligent Retail Delivery Software
1. Reduced delivery turnaround time
Retail delivery software offers real-time live shipment tracking with notifications for tracking and managing logistics from a single dashboard providing details about drivers, deliveries, vehicles, orders, customers, and routes. They help in reducing delivery time by traversing across customer-preferred appropriate conditions.
2. Smart route planning
This software optimizes routes substantially reduce the delivery time by considering delivery slots, traffic, and weather conditions to ensure order fulfillment and timely, acknowledging specific actions like returns, cancellations, or change of address. It also incorporates dynamic and loop routing which involves understanding the stores and the kind of items they hold to maximize their sales and growth as well.
3. Enhanced delivery profitability
Using this software, retailers can also optimize each vehicle's weight and volume to correctly utilize their capacity. This optimization ensures that the vehicle's power is utilized correctly to cut down the number of drivers used to deliver the same number of deliveries and even reduce the delivery time by 27 %. The first attempt delivery rate has also increased by 22%. Over time, this method has increased deliver agent productivity up to 15 % as well, making it beneficial in saving time, cost, and resources.
With e-commerce booming and traditional retailers shifting towards digital delivery models, the significance of advanced retail delivery software will only grow.
Komal Puri is a seasoned professional in the logistics and supply chain industry. As the Senior Director of Marketing and a subject matter expert at FarEye, she has been instrumental in shaping the industry narrative for the past decade. Her expertise and insights have earned her numerous awards and recognition. Komal’s writings reflect her deep understanding of the industry, offering valuable insights and thought leadership.