A guide to last-mile delivery solutions: benefits, challenges, and solutions for your business in optimising your local delivery experience.

Last-mile delivery is one of the most important facets of delivery for small or large businesses. However, each faces a different set of challenges when it comes to providing their goods and services to their customers.

Find out more about last-mile delivery -what it is, who it benefits and why you should think about incorporating it into your business model (or optimizing your current delivery process) to benefit your business.

woman signing for package from delivery man

Chapter 1

What is last-mile delivery/local delivery experience and who needs it?

Last-mile delivery refers to the logistics of the last leg of the delivery process when an item is dispatched from the distribution centre or warehouse to the customer’s doorstep.

A distribution centre, in this case, could be a regional warehouse for a large e-commerce store, but it can also be a local business such as a restaurant, that’s providing goods for a hyperlocal market (to customers based within their neighbourhood, and nearby neighbouring suburbs).

Although the name suggests the customer should be close to the distribution hub, last-mile delivery can range up to a 200km or further in some scenarios such as rural areas where the delivery address is far from the distribution centre.

The purpose of last-mile logistics is to deliver a package as fast as possible from the distribution location to the customer’s address of choice.

This can be expanded further to the local delivery experience which covers the personalisation and branding of the delivery process for a better overall experience for customers and businesses.

delivery experience

Which kinds of businesses can benefit from last-mile delivery

Large e-commerce businesses use last-mile delivery solutions to manage deliveries from regional distribution centres to their customer’s doorsteps.

Smaller local businesses may choose to set up delivery functionality of their own, or partner with third-party solutions such as hyperlocal marketplaces, to provide goods and services within their neighbourhood or local suburbs for them.

Exploring hyperlocal markets

A hyperlocal marketplace focuses on a particular locality. This can be a small community or geographic area.

A hyperlocal marketplace platform that connects customers with goods and services offered by a variety of businesses in a locality can be based around a specific niche, or tailored towards a wider range of products.

A platform like OneCart, which allows customers to shop for their groceries from a selection of retailers in a region centred around the delivery address, is an example of a hyperlocal marketplace platform. Hyperlocal markets can also be much simpler such as a local restaurant delivering food to its surrounding neighbourhoods.

Great local delivery experience gives a business the competitive edge

Optimizing the local delivery of products is a key aspect in helping businesses compete. Providing superior, fast branded delivery, and superior customer experience through better delivery platforms and control of the delivery process adds value to the customer’s experience. In the brand-centric e-commerce world, this can leave a great lasting impression on customers and give a business a competitive edge.

Chapter 2

The challenges associated with last-mile delivery and the local delivery experience

Last-mile delivery is powerful, but also logistically challenging, costly, and time-consuming. It also creates many challenges that can impact a business’s internal processes, as well as its customer’s experience.

Let’s dive into some of the challenges your business may face with last-mile delivery and local delivery experience, which can be solved with some fine-tuning of your delivery logistics.

Sluggish delivery routes

Sluggish delivery routes are a factor that ends up being the most costly leg of the delivery process.

Without properly optimizing routes, drivers can end up wasting valuable time finding their end destination. Well planned routes that seem straightforward – such as delivering parcels within a city center where addresses that are close to one another – can be complicated by external factors such as traffic jams in peak hours. Conversely, when making deliveries to rural areas, addresses may be from tens to hundreds of kilometers away – which can result in slow and late deliveries.

This often leads to a decrease in daily deliveries and late deliveries to customers. Often packages – which means the package will need to be dispatched from the distribution center again the following day.

truck on delivery route with packages

Expedited shipping will be the only acceptable form of delivery in the future

With the rise of online marketplaces (especially in the post-pandemic world), the need to turn your brick-and-mortar style business into a booming e-commerce marketplace, or boutique online store has hit. It has also meant facing the challenge of delivery, and changes in delivery standards for consumer products.

E-commerce businesses want to ensure that their customers receive their products faster than other retailers, and are willing to spend the time and money in the short term to ensure that their customers get the best local delivery experience possible and feel valued.

This means that in the medium to long term, expedited shipping will become the normal for customers shopping online – providing a distinct competitive advantage to businesses that adopt this model in the present day. Generating a great experience through speedy delivery can also lead to an increase in customer loyalty, with satisfied returning customers.

This is particularly true for platforms that offer the same, or a similar range of products, and where pricepoint and delivery are crucial differentiating factors in the consumer’s buying process.

Customers already expect and are willing to pay for faster delivery in some global marketplaces, such as the U.K and U.S, with the rest of the world set to follow suit.

expedited delivery

Availability of the customer

Another variable element of the delivery process and a large factor in the delivery experience is the availability of the recipient of the package.

Often, customers are out when a package is being delivered and delivery attempts can take place multiple times before a successful delivery is complete.

Sometimes this is due to a package running behind (or ahead of) the expected delivery date or time, which can lead to customers not being at home at the time their package arrives.

People also lead busy lives which means it’s not always guaranteed that someone will be at home to sign for the package when it reaches its destination.

Some last-mile delivery companies have attempted to mitigate this issue by allowing customers to change their delivery address up to a few hours before they’re due to receive it at their door. However, this can still be problematic if the delivery address changes drastically, and interferes with a driver’s planned routes.

missed delivery notification

Unremarkable delivery experience

Online brands work hard to build their corporate identity and branding of their product. Everything from the visual aesthetics of the site to marketing and optimisation of the user experience.

When it comes to delivery, however, the use of efficient third party delivery options can yield good logistical success at the expense of branding with a lackluster, unremarkable, and unbranded delivery. This is due to businesses losing control at the point of delivery.

How do these issues arise?

These issues can arise from businesses having little control of a third party delivery company’s processes.

Taking back control of the delivery process would allow businesses to improve on these challenges as well as their own last-mile delivery logistics and the local delivery experience.

Chapter 3

What are the benefits of optimising last-mile delivery and local delivery experience?

Last-mile delivery can be utilised to provide a number of important benefits for your business and your customer through optimising and improving on some of the topics covered in the previous chapter.

Let’s have a deeper look at some of the benefits of optimised last-mile delivery.

Benefits for businesses

- Reduction on shipping costs

Optimizing last-mile delivery can help you cut down your costs and improve profit margins on the most expensive leg of the delivery process.

Use these savings to offer products at more competitive price points and grow your market share.

This reduction in shipping costs might be due to a variety of different factors, from switching to a better delivery platform, insourcing delivery, taking control of route optimisation, or cutting out the need for a middleman.

Simply increasing the number of successful deliveries completed in a day can greatly reduce the cost of delivery.

- Improve productivity with route optimization for faster deliveries

A well-optimised delivery route can save time, and money by increasing the number of successful deliveries completed in a day.

Taking it a step further by digitising your route optimisation can provide even more benefits. You can dynamically adjust your delivery routes, track your drivers, and communicate with drivers to provide instant updates on changes to deliveries.

You can also provide value add to customers, allowing them to track their individual deliveries and allow for delivery adjustments without requiring a go-between.

delivery route optimization

- Software integration and stock management - digitizing your business

Any smart delivery process starts internally, with a system for managing your stock, ordering, and delivery processes effectively.

Working from paper may have been enough to get by in the past, but in modern times, including an intuitive warehouse management system, or retail management system, it is crucial to make sure you save on excess inventory, as well as slip-ups on logistics and delivery.

Integrating software into your inventory management provides a number of benefits, including the ability to optimise your inventory, give your supply chain better visibility of your inventory and shipments, and provide more accurate financial reporting and projections based on concrete information.

It also gives you access to integrating with a delivery network, and rely on a choice of software in the future that you can use to improve components of your business that matter the most.

software integration with delivery

- Improved local delivery experience

At Open Route we help businesses to take control of the delivery process.

We connect businesses with a wide range of drivers that you can choose based on your preferences. Whether you require an all-red fleet of delivery cars, or you require exclusive delivery with an upmarket vehicle, our platform allows you to filter the kind of delivery drivers you’re looking for.

You may decide to curate the delivery experience even further and communicate with your drivers about providing them with custom uniforms for delivery, or even specific kinds of greetings to use, or a general style of communication to keep in mind during delivery, one that suits the style of your brand.

These preferences can also be used to find drivers offering specific, or specialised equipment, for deliveries. For example, some delivery drivers may be able to offer cooling equipment for transporting important samples safely.

This is particularly useful for businesses looking to maintain their branding throughout the customer experience from advertising and shopping on the site to receipt of goods. This creates a great impression for the brand and helps it to stand above other businesses in e-commerce niches.

With the rise of e-commerce stores, this is essential. You need to create a point of difference within your delivery process that results in a lasting experience for the customer that is brand-centric.

Benefits of optimised last-mile delivery for customers

- Reduction on shipping costs

When a business has the ability to cut costs within its delivery process, it can provide a number of benefits for their business but also for their customer base.

A reduced delivery fee can be used to add more value to the customer and presents a competitive advantage against other businesses in a crowded market. As a result, more customers may choose to order from your business in the future, and they may spread the news about customers looking for similar products in the same market niche.

reduced delivery cost

- Improving customer’s local delivery experience

Optimizing your delivery process not only adds value by reducing costs, but it can also create a more transparent and superior branded delivery system for customers.

- Delivery transparency

With software integration and route optimization, you can provide customers with up-to-date live tracking information, allowing your customers to receive their items easily, reduce delivery friction, and improve their experience overall.

transparent delivery process

- Branded or specialised local delivery

You can also tailor the last-leg of your delivery process to provide a branded or personalized delivery experience as we discussed above.

Small delivery details can give your business the advantage in a competitive niche, or help create a highly identifiable brand for customers. Just look at Takealot deliveries, the simple blue T-shirts that delivery drivers wear, and having branded vehicles instantly makes them identifiable and creates brand uniformity as compared to say Uber Eats drivers who are just as prevalent, but far less identifiable.

Having access to specialised equipment such as fridges for temperature-sensitive deliveries can be a major bonus for customers knowing their goods will arrive correctly stored and shows that the business cares not just about the sale but about getting goods to customers safely.

A personalized delivery experience can leave the customer with a lasting impression of your business that can elevate it above competitors within your niche. It also improves customer satisfaction and the chances of repeat business.

medical supplies delivery

- Ensuring speedy delivery and great communication

Having integrated a digital customer-facing ordering platform and optimised, transparent delivery process enables you to meet the needs of your customers even better.

It helps you reach your customers faster, with better routes and creates the capacity to provide them accurate tracking and up-to-the-minute updates on their packages – ensuring a speedy delivery with no hiccups.

Chapter 4

How to optimise last-mile delivery and the local delivery experience

Optimizing last-mile delivery involves a number of factors.

It starts from managing your stock accurately, all the way to ensuring the constant analysis of metrics you can improve during the ordering and delivery process.

It’s also imperative to streamline the most expensive part of the delivery process, the “last-mile”, and ensure you reduce costs of delivery in the future.

This benefits the business and also the customer. Allowing you to reduce your overhead costs, and often decrease the amount that a customer will pay for delivery.

Optimizing last-mile delivery is all about providing increased value for your business and your customer’s experience.

Start by switching to digital inventory management and automated delivery

Optimise your internal systems and delivery integration by digitising.

Switching to digital means that your information is always available from a mobile or desktop interface, with backups to ensure your information is never lost. It also allows for easy integration with delivery platforms and means your inventory is accurate and readily available to you and your customer.

A digital system means customers can easily see what is on offer and handle ordering/checkout easily and without having to interact with the business to invoice and/or confirm stock levels. This speeds up the process, reduces errors, and makes the ordering and order tracking process frictionless for the customer.

digital inventory management

Optimise delivery routes

Use a digital platform to help you automate and plan your optimal delivery routes. This allows you to account for traffic, optimal route planning, communication with drivers, and communication with customers with a single digital dashboard that is always up to date.

A strong delivery platform will also help you navigate around traffic hotspots, factor in last-minute changes, find the best drop off and parking points, and provide a transparent and trackable leg of the delivery process.

Optimizing your delivery routes also depends on building a record of your delivery process, so it can be analyzed and optimised. You can use the data tracked to improve metrics, such as deliveries made per hour, and increase the speed of your deliveries and reduce the daily cost of deliveries.

There are a number of ways to improve your last-mile delivery process, and it starts with a great holistic understanding of your business facing functions right up to your customer-facing delivery process.

We like to base our route optimization on time or distance metrics, creating more flexibility for your business’ delivery process – but more on that towards the end.

Create dark stores/click and collect points

Dark stores are becoming more and more popular, providing the capability to provide customers with same-day delivery times with a direct-to-consumer approach.

Essentially, you are converting your once “walk-in” style store, to an online-fulfillment center for a specific region. Many businesses use it to boost the success of underperforming stores through this transformation.

It’s also a way to boost the success of underperforming stores, converting the store into a warehouse-style facility that offers unrivaled delivery times and provide your business with a local/neighborhood distribution center.

With this methodology in place, you can offer your customers unrivaled delivery times, as well as a click and collect service, which can help you save money on delivery costs if a customer is willing to drive a matter of minutes to reach your dark store within their local neighbourhood.

To create your dark store, you will need to start with a sizable space, where you can manage your inventory, receive packages, and dispatch them for delivery to your customer’s doorsteps.

You need to have an optimise delivery system in place to ensure you can meet same-day delivery needs, whilst improving profit. Your inventory management systems need to be accurate and your delivery network needs to be fast, reliable, and equipped with the right tools to deliver products efficiently.

dark stores click and collect points

Structuring KPIs with delivery partners/distribution hubs & drivers

To ensure that you have a swift delivery process from once the order is placed, until delivery to a customer’s doorstep – you’ll need to structure key performance indicators for different stages of the ordering, dispatch, and delivery process.

Having these indicators in place will provide you with a more accurate timeline, and understanding of what you can achieve with your current last-mile delivery process and provide the statistics needed to optimise these processes in the future.

Usually, you may start by setting key performance indicators (KPIs) for your suppliers. Measuring your suppliers’ OTIF (“on time, in full”) metric, standing for on time and in full, will help you understand the efficiency and accuracy of this initial leg of the process.

You’ll also need KPIs for your storage facilities, online & regional fulfillment centers, or warehouses, including the stock turnover, packaging time and cost, and number of packages an hour – just to name a few.

The same can be said for the last-mile delivery portion of the process, including measuring your delivery cost per order, and finding out how many orders you ship with a channeled approach as examples – and also the number of returns you receive, the reasons why.

Putting strong KPIs in place that can assist you in optimizing your delivery process in the future is imperative. It provides you with the metrics to improve your delivery costs, increase profits, and compete with e-commerce businesses within your specific product or service niche.

delivery driver KPIs

Create a branded delivery strategy

Design a delivery strategy that aligns with your business ideals and keeps customers happy and work towards this. This is the local delivery experience that customers will receive and should be in line with your business goals and strategy.

Think about things like delivery branding – are you happy with non-descript delivery or do you want to create an identifiable process? Do you want to use branded vehicles and drivers for delivery? Do you want unique packaging?

Another factor to consider is specialised delivery – do your products have special delivery requirements such as temperature-sensitive or fragile goods? For premium delivery, you could consider using luxury cars?

You can also consider the delivery personnel – should they wear uniforms? Do you want them to use specific phrases?

The possibilities for personalising deliveries are endless and depend on your brand and delivery strategy.

Chapter 5

What does last-mile delivery look like in the technological era?

In an era of digital interfaces and gadgets, the future of last-mile delivery promises innovative, and intriguing delivery methods that are being tried and tested in a variety of countries across the world.

Technology has already allowed last-mile delivery to become more accurate and efficient and this trend is set to continue with the increased demand of new e-commerce businesses and small local businesses looking to get online.

Apps

Apps are the latest advancement in recent times for delivery, allowing businesses to communicate more effectively with their customers and hook into more delivery networks for on-demand products and services.

A prime example is the food industry, where restaurants are often registered on multiple delivery platforms so they maximize their revenue, in a market environment where foot traffic for a lot of businesses has decreased significantly.

The same can often be said for the delivery of items within a specific area from larger businesses’ distribution hubs. Apps have created the opportunity for independent vetted drivers to be available on-demand and deliver a wide range of products from larger businesses in different industries.

With the future at our doorstep, apps will serve as the interface for communicating faster-paced delivery methods led by innovations in delivery technology.

With the demand for increased efficiency in deliveries, companies have had to find new ways of delivering products to cut down their cost of delivery. Some delivery methods that were once considered futuristic are being tested in some global markets already with success.

delivery apps

Drones

One of these methods includes utilizing drones, which has already existed as a delivery method for a number of years – but is seeing a steady increase in demand and innovation.

For example, Amazon’s Prime Air delivery system is eliminating the need for more costly delivery networks that were once used to deliver the majority of Amazon’s packages, after only a few years, competing with the companies USPS, Fedex and UPS, which were responsible for the delivery of the majority of products ordered from Amazon.

drone delivery

Self-driving delivery vehicles

Another method is being trialed at the moment is self-driving delivery vehicles, with a company such as Nuro receiving attention for receiving a federal exemption for testing in the U.S. with their low-speed autonomous delivery vehicle.

It’s estimated that autonomous vehicle delivery could form up to 80% of all deliveries in the not-so-distant future.

self driving delivery vehicle NURO

Chapter 6

How is optimised last-mile delivery and great local delivery experience useful for businesses during the Coronavirus pandemic?

Delivery has become one of the only viable ways for businesses to operate reliably during the recent COVID-19 pandemic. With sales down and the effect of the recession hitting, companies small and large are looking for ways to optimise their delivery systems, cut delivery costs, and find new, and easier ways to reach their customers safely while preserving their brand and face-to-face service levels.

As people try to mitigate the risk of getting infected and practice social distancing, selling your product online is a great way to recover sales lost due to lack of foot traffic.

If you are not an essential service, setting up delivery for your business may be your only option for a revenue stream or it could simply be a great marketplace to grow your business.

Even if your business hasn’t been hit that hard, the delivery industry is set to grow and become increasingly prevalent in the lives of consumers for the future.

Finding a viable way to conduct speedy and safe deliveries is imperative, and it will be the only acceptable standard for quite some time. It also shows that you’re keeping with the times, and safe delivery is incredibly valuable in the eyes of your customer, making them feel calm and secure.

Focusing on the delivery experience can also allow your business to offer customers some of the face to face experience they are used to when visiting your store. Whether it is a premium brand or a local startup, creating a unique and identifiable delivery process can have great benefits for customer experience and branding at a fraction of the cost of a storefront.

covid-19 safe delivery to customers

Chapter 7

How Open Route can help you manage last-mile delivery to WOW your customers

We provide a number of ways to help your business thrive and maintain a direct relationship with your customers. That’s right, you keep the control over your relationships while we plug in and power the last-mile delivery experience.

Being a delivery partner that powers your delivery capacity

Use your drivers or Open Route’s crowdsource drivers

We encourage businesses which rely on an existing team of drivers in-house to activate them on our delivery platform at no extra cost.

The benefit here is that your drivers have access to a state-of-the-art mobile driver app that lets them deliver to your customers with ease.

delivery platform business facing

Flexible month-to-month services agreement

Running a business is tough, especially with the level of uncertainty at the moment. Our services agreement has no minimum duration and is cancellable with one calendar month notice.

Simply pay a fixed amount of R230 (incl. VAT) per month to keep your services agreement active with us.

delivery platform customer facing

Local delivery experience personalisation

You can also personalise the delivery experience to suit your brand.

You will still manage the drivers we provide independently, so you can request that your drivers wear specific uniforms or use specific lingo when delivering items for example.

Or you might need to find specific drivers based around a selection of specific coloured vehicles to suit your brand’s image or even high-end vehicles for occasional luxury/premium deliveries that create a distinct impression.

Pay-as-you-use delivery platform

We provide a pay-as-you-use delivery platform that allows you to manage your deliveries comprehensively for as little as R11.50 (incl. VAT) per delivery task created.

You can assign deliveries to drivers seamlessly, whether it’s your own in-house driver pool or Open Route’s verified crowdsource drivers.

Each stage of the delivery process is recorded in real-time, from the pickup of an item at your warehouse or store, monitoring the progress of your delivery, as well as arrival, right through to keeping a record of proof of delivery and customer sign-off.

Our Route Optimization features give you the capability to adjust your delivery routes based on time or distance, allowing you to achieve the best possible route to reach your customers’ delivery destinations with ease.

delivery platform business facing

Optimizing your business’ delivery routes to increase profit and productivity (new or existing)

With our platform in place, we can optimise your delivery routes based on time and distance, allowing you to create fast and effective delivery routes that match your business’ goals and customer’s expectations.

Creating an efficient delivery process will allow your delivery network to function faster, and complete more daily deliveries while cutting the time wasted on missed deliveries and late deliveries.

You can also track metrics that you feel you can improve in the future, and begin reducing costs – which is the main goal of businesses making, or looking to make, loads of deliveries without financial obstacles.

If you’re struggling to cut the costs of your current delivery methods, we can help you find a better way of doing things – and if you’re not already online, it’s the right time to build your online presence and open up another revenue stream.

Keep your customer notified in real-time

Your customer wants the certainty of knowing when the delivery is on its way and to know who the driver is. Wth the Open Route delivery platform, your customer receives a real-time SMS notification when the driver starts the delivery and is able to track your driver live using the URL tracking link without requiring another app. Check out the example below. 

delivery platform customer facing

Personalise your local delivery experience

You can also personalise the delivery experience to suit your brand. After all, the driver is an extension of your brand and most customers’ only human contact is with the delivery driver.

You will still manage the drivers we provide independently, so you can request that your drivers wear specific uniforms or use specific lingo when delivering items for example.

Or you might need to find specific drivers based around a selection of specific coloured vehicles to suit your brand’s image or even high-end vehicles for occasional luxury/premium deliveries that create a distinct impression.

Open Route is able to match your preferences using our matching algorithm to build your driver team the way you want.

Personalised solutions and optimisation for your business’s specific needs

Depending on the logistics your business requires, Open Route can assist your small business or larger e-commerce store in achieving its delivery goals.

For e-commerce, our strengths lie in providing you with the tools to optimise your last-mile delivery process (of course!) but we can also look into your business’ operations holistically to help you streamline internal functions that lead up to the dispatch of an item.

Our goal is to help you achieve faster deliveries overall!

Same-day deliveries and next-day delivery windows present a headache to many e-commerce companies specifically, who are unable to meet this demand from their customers.

This is often because e-commerce stores are large and span nationwide, and ensuring such a fast delivery within neighbourhoods presents a unique challenge that they are yet to solve.

The same can be said for more local e-commerce stores that haven’t found a way to maximise their delivery schedules and get the results they’re striving for.

However, we can confirm that it is possible to provide your business with the capacity to offer much faster deliveries or even same-day deliveries, which can provide both business-facing and customer-facing benefits.

We also help smaller local businesses with digitized solutions that ensure you have the right tools to manage your business internal operations effectively, and provide customers a great experience simultaneously – so you can ensure they’re satisfied from the moment they land on your platform, and right up until their order arrives safely at the door.

We can also optimise and create further benefits for businesses that already have delivery networks in place.

For example, pharmacies value working with us as they can use our platform’s matching algorithm to find drivers with specific equipment to ensure the safe delivery of medical supplies.

And we’re just as popular with restaurants, providing them with the means to cut out the middleman and food portals by letting each restaurant take control of the delivery experience using our delivery platform which is cost-effective.

We focus on planned or batch deliveries for you to optimise your delivery routes to increase profit and productivity

With our delivery platform in place, we help power the ability to optimise your delivery routes based on time and distance, allowing you to create fast and effective delivery routes that match your business’ goals and customer’s expectations.

Creating an efficient delivery process will allow your delivery drivers to function faster, and complete more daily deliveries while cutting the time wasted on missed deliveries and late deliveries.

You can also track metrics that you feel you can improve in the future, and begin reducing costs – which is the main goal of businesses making, or looking to make, loads of deliveries without financial obstacles.

If you’re struggling to cut the costs of your current delivery methods, we can help you find a better way of doing things – and if you’re not already online, it’s the right time to build your online presence and open up another revenue stream.

optimized delivery routes

Get in touch with OpenRoute

Find out how we can help you improve your existing delivery network. Whether you’re a large e-commerce store or a small local business, we can provide you with the tools you need to make your local delivery experience more efficient.

Switch to a cost-effective, optimised delivery solution for your existing e-commerce store, or create a multi-channel digital presence paired with a reliable delivery system to help you reach your customers online.

Get in touch with Open Route via our contact form to optimise your last-mile delivery and local delivery experience today!