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How to Solve the Last Mile Problem

Delivery economy becoming core of customer experience

The rise of on-demand delivery apps and free-shipping has changed how consumers shop and raised expectations for deliveries.

Delivery speed and real-time tracking ability are becoming the core of customers’ expectations as same-day delivery becomes more prevalent in the U.S., according to a new report from Project44, a provider of advanced visibility for shippers and logistics services.

The new report from Project44, “The Delivery Economy and The New Customer Experience,” is based on a blind survey of more than 750 consumers and a survey of 500 marketing executives. This shift in expectations is ushering in the delivery economy — the pervasive sentiment in which customers expect low-cost, fast and highly transparent delivery of goods — and irrevocably changing the customer experience.

“Today, convenience, speed and simplicity reign supreme,” according to the study’s findings, which noted that 85% of marketers now say that delivery is moderately to very important to their brand and customer experience. “Whether it is ordering dinner via Grubhub, curbside pick-up for household items at Walmart, or Amazon Fresh’s store-to-door grocery delivery, companies are increasingly expanding their offerings to include services that bring products directly to consumers.”

Amazon Prime and the rising popularity of instant delivery apps and services have reshaped American consumers’ expectations. More than half of consumers, according to Project 44, say that free or discounted shipping is one of the most important factors in their purchase decision. 

“We find it very telling that consumers give the same weight to delivery as they do to the price of a product in their customer experience,” said Jett McCandless, founder and CEO at Project44. “With the rapidly growing use of on-demand delivery apps and same-day delivery services, customers aren’t just buying a product, they’re buying an entire experience. The Delivery Economy is here to stay, and will continue to have a vast influence on B2C and B2B expectations in the short- and long-term.”

Being able to track an order in real-time is important to 70% of the consumers surveyed; while 82% of marketers surveyed said their company offers the ability to track the progress of shipments. 

“One of the biggest draws of on-demand delivery apps like Postmates and Instacart is that customers know where an order stands, can map the route, and know down to the mile and the minute when a product will arrive at their door," said Elaine Singleton, vice president of supply chain at Technicolor. "Brand leaders and marketing departments should be partnering with key internal and external stakeholders like sourcing, inventory, logistics, and transportation carriers in order to gain control of these new customer experience, and truly succeed in the delivery economy.”

Technicolor is a Blu-Ray and DVD manufacturer and distributor that major Hollywood studios rely on to service over 9,500 retailers a week including Target, Walmart, Best Buy and Costco.

Here are some other findings from the report:

  • 74% of consumers say that when a package isn’t delivered when expected, it hurts their impression of the company.
  • 94% of people who make purchases for their company said they expect the same level of focus on customer satisfaction as when they’re making personal purchases.
  • 65% marketers also cited good customer service as a core driver of purchase decisions, but only 25% of consumers agreed.
  • 71% of consumers say on-demand delivery apps are re-shaping consumer expectations for how they want all of their online purchases delivered.
  • 56% of marketers cite delivery and transportation companies and supply chain/shipping departments (47%) among the top three stakeholders to deliver the best customer experience.
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