For last-mile delivery providers and their retail customers, the collection of data has become a must. How they use that data and how much is shared with customers, however, remains more clouded.
“It was always a topic, but everyone was so involved in running day-to-day operations, the pressure [to invest] wasn’t enough,” said Tobias Buxhoidt, founder and CEO of post-sales experience company parcelLab.
Buxhoidt told Modern Shipper that supply chains are “very structural” on how they work, but that “building transparency [is important] especially now that supply chains are having so many problems.”
He said during a meeting at the recent National Retail Federation’s Big Show in New York City that parcelLab can “use the data to reduce the negative impacts on customers.”
Buxhoidt is not alone in his belief in the power of data. Daniela Perlmutter, senior vice president of marketing for last-mile delivery provider Bringg, told Modern Shipper at the same show that the collection of data will allow the industry to move forward.
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“I think [in 2021] we were OK because customers had an understanding [of the challenges the supply chain faced],” she said. “In 2021, it was the year of transformation. We can’t do ‘quick and dirty’ delivery this year like in 2021 because it wasn’t scalable.”
Perlmutter said for last-mile delivery to succeed, providers from brands to delivery firms must improve their data collection to inform better planning and innovation in the final mile.
“It’s the usability of giving customers visibility,” she noted. “[Providers] need to have the data whether it is from their own drivers or third-party drivers.”
More data downstream leads to improved proof of delivery and estimated time of arrival information, Perlmutter said, giving customers the information they crave.
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In the second annual Bringg Barometer: “The State of Retail Delivery & Fulfillment 2022” report, 47% of retailers said they were somewhat satisfied with delivery windows and 4% said they were dissatisfied. Only 29% felt they were doing a great job with delivery windows, suggesting there is plenty of room for improvement in the process.
When it came to the quality of delivery services offered, 54% were highly satisfied against just 23% that were somewhat satisfied. However, the Bringg report found areas of opportunity. Of 56% of retailers that were highly satisfied with their delivery/pickup options, 64% said they struggled with inefficient manual processes. Of the 54% highly satisfied with the quality of delivery services, 43% struggle with scheduling those deliveries.
Data is important “because whatever you know, you can control,” Perlmutter said, and that creates better communication throughout the supply chain, including with customers. It also leads to improved fleet planning and asset allocation.
She said the more data brands can collect, the easier it is to compare delivery providers.
“[Prior to 2020], retailers used to use gig economy drivers and ground-based fleets to get [delivery services] up and running,” Perlmutter said. “Now they are taking a basket of eggs and diversifying their fleets. The data is what allows us to manage the experience.”
According to Bringg’s survey, consumers have a 40% higher e-commerce sales conversion rate when they are offered a multi-option delivery experience. That could be one-day, two-day or standard three- to five-day delivery windows. It could be an eco-friendly delivery option. Or it could be a ship-to-store for customer pickup option.
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“There has been a major push for data, not just in e-commerce, but everything in supply chain,” Buxhoidt said. “The more data you have, the more visibility you have. The more data you have, the more ability you have [to manage the overall customer experience].”
Buxhoidt said collecting data is not enough, you have to understand how to work with it and how to automate it to cut through large amounts of information and how to build awareness and understanding of what the data is telling you.
“Once you have those three elements in place, then you can do something with the data,” he said, adding that top-performing organizations are able to connect the various data flows from all points, including inbound and outbound logistics.
“All of this data is worthless until you connect it,” Buxhoidt said.
In some cases, having too much data is not beneficial. A customer may not need to know their package was shipped into and out of four different warehouses in three different states, but they certainly want to know if that item will arrive on time.
Once data collection is robust enough, retailers can start to understand the customer better and get a better feeling for what each individual customer expects, including the ability to quickly solve concerns.
“Brands that understand customers and respond to solve challenges have higher retention rates (about 4% higher) than those that simply have a satisfied customer,” Buxhoidt said. “You, as a shipper or brand, can help make bad things turn positive.”
Click for more articles by Brian Straight.
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