It’s the last mile, stupid!

NEW YORK CITY — Last mile deliveries can make or break a retailer, and often, are the most critical step in e-commerce, especially for customers who require “white glove” services, which are in-home deliveries and instillation services, usually of larger furniture or electronics purchases. But for all that gravity, “customers are thinking about the party that they plan to throw with that patio kit,” not the “Ikea moment with the sweating and swearing,” Jim Hourigan of builddirect.com told the audience at the D3 2017 Summit in Brooklyn.

Jeff Girard, SVP of Logistics at DSW Inc. noted that “brick and mortar traffic is going down, but not going away.” His employer responded with a compromise with e-commerce, putting inventory into stores and leveraging them as fulfillment centers to create a “wow factor,” adding 40 percent more inventory to its stores and using the locations to simultaneously ship e-commerce orders. “70 percent of the U.S. populations lives within 20 minutes of DSW stores,” Girard said.

Shoes are one matter, but last-mile solutions are more complex for furniture and large electronics retailers. Moreover, customer’s expectations are increasing thanks to an unusual source – Domino’s Pizza. The fast food retailer’s delivery app tracks the pizza from the kitchen to the front door and now, customers want the same options for that TV that they ordered online. 

That challenge represents an opportunity for companies with “white glove services” to distinguish themselves. By offering end-to-end tracking and personalized delivery and installation, companies can take e-commerce from an impersonal online interaction a unique service experience. That’s important, said Rob Taylor, CEO of Convey, where research found that 70 percent of consumers will abandon a retailer altogether after a bad experience!

Another market factor keeping the last-mile business in flux is what Tim Laseter of PwC considered market distortions created by huge investments that allow companies to operate at a loss for extended periods. He described the situation as “people setting expectations based on an economic model funded by investors.”