Customer expectations forcing businesses to deliver faster or die

The past decade in the road freight industry has seen businesses pushing toward digitalization of legacy processes within logistics operations. Companies are waking up to the prospect that visibility into the supply chain will ultimately help every stakeholder in the ecosystem reduce expenses by improving operational efficiency.

The rise of e-commerce also buoys the digitalization efforts, pushing supply chains to react faster to their customers. The “Amazon effect” has led to logistics — especially the last-mile segment — becoming an integral part of the consumer experience. Jay Sackos, head of sales at Dolly, the fast-shipping startup, spoke to FreightWaves on the last-mile trends he has witnessed the past few years.

“Since the digital freight boards happened in the full truckload business — both in terms of capacity and volume — there has been a general quickening of market cycle times,” Sackos said. “So we used to be in this freight world where it would be several years of demand-driven or capacity-driven trends, but that has now shortened to just around a year.”

This translates to gradually heightening expectations. Previously content with weeklong delivery schedules, customers now often view next-day delivery as a given. This ratcheting of expectations has effectively created a reality in which expedited shipping is a necessity for brands to garner consumer loyalty.

“Consumer expectations have skyrocketed not just in terms of when they want their product [but] also the visibility aspect of it — they want to be able to see as the product makes its way to them,” Sackos said. “So the idea of legacy final mile where the product ends up in a truck and the consumer does not have a clue, is not an idea that will resonate any longer.”

Sackos contended that e-commerce will continue to grow as it essentially allows consumers to access whole marketplaces at the touch of a button. For brands to succeed today, it is critical to win on the e-commerce front.

“Everyone’s got to compete in the flat world that is e-commerce,” Sackos said. “And I think that drives a higher bar on expectations that retailers will need to meet to get into the game and stay relevant.”

For small and mid-tier businesses, getting to customers on same-day or next-day delivery schedules might be out of reach, as replicating the Amazon shipping model would incur massive logistics infrastructure costs. However, companies like Dolly are helping retailers meet expedited last-mile delivery expectations by providing Amazon-like shipping services at cost-effective rates.

“As we move along, greater automation will come into play,” Sackos said. “One thing I’m certain of is that the industry needs to start with putting the customer at the center of the transaction. The idea of the legacy final mile where you’re going to have a 10-stop load, and you don’t let the customers know when their products will hit their doorsteps, is a crummy experience that can’t be afforded any longer.”

While the last mile is being perfected, e-commerce companies are looking to reverse their steps back to brick-and-mortar experiences, opening up physical storefronts to get closer to customers. With physical stores, e-commerce brands can be more responsive to product demands, which further expedites shipments.

The future might witness a scenario in which the obsession to reach customers faster could lead to brands blurring the lines separating online commerce and concrete storefronts, by fusing those experiences for better engagement with consumers.

 

 

Source: Freight Waves. “Customer expectations forcing businesses to deliver faster or die“. (https://www.freightwaves.com/news/customer-expectations-forcing-businesses-to-deliver-faster-or-die). Vishnu Rajamanickam. Oct 31, 2019.

 

 

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