The recent recession has caused many retailers to rethink their inventory strategies, says Jim Wicker. "Retailers are changing the footprint of their stores and how much inventory they are willing to keep in their stores. They also are looking at more home delivery or direct-to-consumer delivery options. These are issues that directly impact last-mile logistics."
Last-mile logistics is about more than the transportation piece because it often includes specialized services, Wicker says. A furniture retailer, for example, may offer light assembly while an electronics retailer may offer installation. "And there is expedited shipping, whether of simple products like clothing that a consumer wants quickly, or of high-end, high-value products," he says.
Even retailers that don't offer special services are looking to store less inventory and get faster replenishment of stock, Wicker says.
The challenge for many retailers is that these strategic shifts often don't filter down to transportation policies and practices. Last-mile delivery is a tool that retailers can use to help change their core model and service offerings, he says, but transportation is usually delegated to a department that has little or no collaboration with marketing or product development or local store management.
"Companies really need to involve multiple groups and departments, all the way down to the store level, in implementing a strategic vision," says Wicker. With last-mile logistics, that means "having a product offering and not simply a shipping solution," he says.
Proper execution also requires partnership with a provider that specializes in last-mile services and that can work with the retailer to craft a winning strategy for all parties, he says. "There needs to be an understanding that this is no longer a cost item in the transportation budget but a way to offer new products and services to your customer."
Shippers also need to make sure they have access to the best available technology so that solutions can be tailored to meet individual customer needs, says Wicker. There are no "out of the box" solutions for last-mile logistics, he says. "Each retailer needs a customized approach that focuses on how to enhance its customers' experience and how to improve customer loyalty and involvement."
Finally, retailers and their logistics partners should have proactive mechanisms in place to monitor and measure customer service, Wicker says, noting that this is particularly critical in the age of social media. "It only takes one bad delivery," to have that image immediately posted for all the world to see.
