Reinventing the last mile: unsustainable for companies, unsatisfying for consumers

The last mile, still to be defined. E-commerce home delivery is still the challenge for distribution and logistics: three out of four consumers would increase the shopping expenditure and try new products in case of receiving a satisfactory delivery service, but only 1% would pay for the full price of the shipment, according to a report by Capgemini. The last mile is still not profitable for companies and not satisfactory for consumers.

97% of the companies consider that the current last mile delivery models are not sustainable if they are implemented on a large geographical scale, according to the report El reto de las entregas de última milla (The challenge of last mile delivery) prepared by Capgemini through a survey to 3,000 consumers and 500 retail and mass consumption managers from all over the world.

The study concludes that, for the time being, the only way to make deliveries profitable is by means of the automatization of urban logistics. Nowadays, the storage and classification of products account for one third of the total costs of the logistical chain. 89% of the companies are investing on that to speed up the preparation of orders and deliveries.

55% of the consumers say that a 48-hour delivery service would consolidate its loyalty to the brand

A fast and efficient delivery would increment the client’s expenditure and its loyalty to the brand. 74% of the consumers that claim to be satisfied with a brand plans to increase their spending on them; 82% share its experiences related to the brand with friends and relatives; and 53% affirms to be willing to pay a periodic fee for a good delivery service.

55% of the consumers say that a 48-hour delivery service would consolidate its loyalty to the brand. However, less than 20% of the companies offer such service. 59% of the companies have delivery deadlines of even more than three days.

On the other hand, the report reveals that 65% of the consumers use alternative shipping services, such as Google Express, Instacart or Ocado. In general, consumers are not satisfied with the current delivery service: 59% affirms that it is due to its high price, 47%, due to the inability to receive the products on the same day, and 45% due to delays in deliveries.

Companies charge 80% of the total shipping cost to the consumers

Almost half of the surveyed claim that they would stop purchasing at their usual store if they were not satisfied with the delivery service. 45% of those who said they would continue purchasing also stressed that they would reduce their spending.

At present, companies charge 80% of the total shipping cost. In spite of that, the priorities in last mile for companies and for consumers are different: while the first focus on immediate deliveries, the latter would be willing to wait if they could choose a determinate time slot.

Likewise, consumers are also open to try crowdsourcing delivery options and, in exchange for an incentive, they would be willing to deliver products to their neighbours. 64% of the consumers are indifferent about the delivery being made by a shop assistant, an individual or an external delivery company.