There are no signs of eCommerce’s growth slowing anytime soon, especially for direct-to-consumer brands. Sure, the industry saw unparalleled growth in 2020, thanks largely in part to a shift in consumer buying patterns during the pandemic. According to one report, sales from eCommerce DTC brands reached $111.54 billion in 2020, up from $76.68 billion in sales from the previous year.
But one year of DTC success during uncertain times, stay-at-home orders, and social distancing doesn’t seem to be a fluke, either. Once again this year, eCommerce DTC brands are expecting to ring in record profits, reaching a projected $129.31 billion in sales by year’s end.
However? Keeping up with this kind of soaring demand can be a challenge to DTC brands, which have never experienced this kind of year-over-year growth before. After all, one year looks so vastly different from the year before that some brands have to reinvent their processes, searching for new third-party logistics (3PL) partners to stay caught up.
To match this kind of demand, retailers need to find ways to strengthen their last-mile operations to ensure packages are delivered quickly and efficiently as a streamlined part of their shipping solution.
Consumer Expectations and High eCommerce Levels
When it comes to eCommerce, what do consumers want?
Fast, free shipping.
When polled, a group of 2,500 consumers shared that their top two concerns about shipping were speed and cost, with numbers of those expecting fast delivery quickly rising. Additionally, only 7.5 percent said that shipping dates don’t affect their purchasing decisions, and 79.3 percent of those polled shared that free, two-day shipping was important to them.
In other words? Even if DTC brands don’t think they are competing with online retail giants like Amazon, their customers think they are.
But achieving these lightning-speed deliveries is not always simple. When you combine the recent rapid growth in the eCommerce industry with a tight labor market, it makes it harder than ever for DTC brands to pay reasonable rates for last-mile carriers. You don’t have to look much further than the headlines to get the gist of what’s happening:
But for DTC retailers, supply chains are everything. So, how can you optimize your last-mile solutions to offer fast, affordable shipping?
Last-mile delivery is one of the easiest ways to keep shipping costs low, but the service presents its own set of challenges. In fact, some estimates surmise that last-mile delivery amounts to 28 percent of the total delivery cost, while also taking the most time in the delivery process. However? There are ways to make the most of last-mile solutions and get better results.
Last-mile delivery isn’t just about getting a package to your customer’s doorstep; it’s about providing a meaningful customer experience that delights your customer, and timely, affordable deliveries are a critical component of the overall customer experience. It’s your last chance to make a good impression.
Optimizing Last-Mile Solutions
The eCommerce boom is showing no signs of slowing anytime soon. Online retailers and DTC brands can leverage last-mile delivery solutions to get an edge on their competition, but only if they make the most of their last-mile carriers. How can they do that?
Emphasize Fast Delivery
Last-mile logistics is all about getting items to end-users as fast as possible. Fulfilling online orders is a tricky game, and no one solution will work for every DTC brand, or even for every order placed with the same DTC company. Even so, one of the most critical objectives is to facilitate delivery that is fast and affordable.
One way last-mile services and online brands are accomplishing this is by placing inventory as close as possible to the end-users. DTC brands can work with their 3PL provider to analyze data to determine which fulfillment centers are closest to their customers.
Those looking to get even more specialized with their last-mile delivery services are developing micro-fulfillment hubs, then pairing these hubs with last-mile delivery services to facilitate fast delivery at a low price. From here, regional and local carriers offering expansive pick-up and delivery schedules can help these retailers achieve rapid-speed delivery.
Make the Most of Your Inventory
You can diversify your fulfillment location strategy to work with localized last-mile delivery carriers, but this is only effective if your fulfillment centers and micro-fulfillment centers are stocked with the right product. DTC brands should invest in intuitive inventory forecasting technology, to not just predict the quantities of the products they’ll need, but also to understand buying patterns to know where inventory should be located.
In short? Total inventory visibility and management capabilities. Customers want faster delivery, but last-mile delivery services are only effective if localized fulfillment centers have access to the products they need. Customer order patterns and at-a-glance inventory data can help DTC retailers understand how to best leverage their inventory so they are always sufficiently stocked.
This is no small task, though. It requires large data lakes, inventory forecasting, and expert insights, which can be entrusted to a 3PL partner with an advanced warehouse and inventory management technology solution; one that integrates with your supplier and vendor systems and offers APIs to integrate with your marketplace and carriers so you gain complete visibility.
Shipping Analytics and Transparency
Having full visibility of your shipping data puts the power back in your hands. It allows you to track and discover your operations in the real world, then evaluate how you can make improvements to this process.
Make the most of your last-mile solutions by using real-time data to gain transparency into the entire shipping process including spending and delivery times. You can identify problem areas and inefficiencies to find ways to spend smarter by getting a full view of your carrier costs and delivery performance, say if you paid for two-day delivery and a package was delivered in three days. Small observations available through this kind of data can help you mitigate additional costs and make corrections to your operation—all to provide your customers with an exceptional experience that only continues to get better and better.
OceanX: Your Last-Mile Secret Weapon
OceanX understands that what DTC brands need to make last-mile delivery boils down to data visibility. With OceanX’s Bridge Platform, online retailers can get a complete look at their entire process, from the moment a customer makes a purchase to the moment that order arrives at its final destination. OceanX offers:
- Inventory management and forecasting
- Shipping analytics and order tracking
- Route optimization software
- Multiple fulfillment center locations
- Industry connections to get you the best rates
The Bridge Platform is designed to bring your work together in one place, with a robust data lake and easy integration with your existing programs, our team will help you take the data you collect and turn it into actionable insights to revolutionize your work all the way through the last-mile. To learn more, request a free quote today.