Struggling with Same-Day Delivery Challenges? Here are 5 Tips to Solve Them
As digitization drives consumer demand, D2C retailers need to be ready to meet these 6 common same-day delivery challenges.
In a society used to on-demand services that provide consumers what they want and when they want it, same-day delivery challenges are giving many online retailers in the UAE a headache they could do without.
It’s understandable. Running an online business is hard enough without having to accelerate the delivery process in a cost-effective way, all while still meeting high customer satisfaction standards.
In the UAE today, when it comes to completing same-day deliveries, online retailers are faced with a few common obstacles created by traditional logistics systems. These include:
Meeting promised delivery times set out in customer SLAs
Avoiding supply chain bottle-necks caused by outdated tools
Providing the same level of customer experience for quicker deliveries
Affording higher costs of faster order fulfilment.
Despite these hurdles, same-day delivery is emerging as the dominant time frame in a logistics industry that’s getting more competitive by the day.
Commercial sellers that don’t deliver quickly face being pushed to the back of the line.
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Why UAE e-commerce retailers need a same-day delivery service
For companies in the UAE, the local e-commerce market is predicted by Euromonitor to reach a value of $8 billion by 2025, double that of 2020, partially thanks to a digital shift in consumer habits that began with the pandemic.
This online shopping boom is fuelling a demand for quick last-mile delivery: many consumers in the UAE and Saudi Arabia now favor same day drop-offs in a trend witnessed across the world at large.
Source: Euromonitor
This trend reveals itself in several key factors that directly affect retail performance.
It boosts conversions
Fast delivery isn’t a new phenomenon in the UAE. It’s topped consumer demands since at least 2016, when PwC reported that 63% of customers in the region would be willing to pay more for same-day goods.
This means that retailers who provide same-day e-commerce deliveries will find that their conversion rates will rise as they fulfill a key customer demand, simultaneously putting them a step ahead of slower rivals.
Less consumer patience
The wealth of online shopping options nowadays means that shoppers are more fickle than ever before. If they feel they have to wait for their items, they’ll simply go elsewhere. Next-day delivery isn’t enough any more.
This is reflected in an eye-opening study that says a quarter of shoppers abandon their cart if they can’t have same-day shipping, as per research from consulting firm Invespcro.
1 in 4 shoppers won’t wait for their goods
Source: Invespcro
It’s the future
Same-day delivery isn’t a niche market offering that only a select band of retailers provide. By 2024, almost two-thirds of retailers are expected to offer same-day delivery, according to the same Invespcro report, with some targeting hourly or even thirty-minute drop-offs.
As tech improves so will logistics, and we’ll eventually reach a point where every retail company will need to have same day delivery options. If not, they face losing their market share, or worse.
The top 6 challenges of same-day delivery (and how retailers can overcome them)
In a society used to instant gratification, whether it’s the buzz of a social media ‘like’ or the instant download of a movie, same-day delivery is becoming a top preference for consumers eager to get their hands on their purchases as soon as possible.
Yet, with e-commerce continuing to grow at rapid speed, and customer expectations with it, meeting this demand is fraught with several key challenges for small businesses.
Here are six of the most common ones.
1. high costs
To state the obvious, the cost of same-day delivery is higher than next-day or two-day distribution.
The shorter the delivery time, the higher the operational costs and possibility of human error. It piles huge financial pressure on distributors who aren’t prepared, and can often lead to cash flow problems later on.
All the more necessary, then, for cost-effective measures to help delivery companies hit those same-day targets.
Pro tip
Finding ways to trim costs and remove bottlenecks is imperative when trying to fit same day delivery into distribution budgets.
The good news is that new technological solutions are helping firms minimise delivery costs through automation.
Automated inventory management, smart dispatch and routing systems are just two examples of these, as digital logistics begins to take hold of a delivery industry failing to keep up with consumer demand.
2. Outdated dispatch methods
Manual dispatching procedures are the most common way of dealing with same-day orders in the UAE, but these look increasingly out-of-date in a changing delivery market.
The lack of time makes it very difficult for human staff to check up on fleet availability, and they are often stuck using old-school software that isn’t designed to cope with on-demand delivery orders.
On top of that, manual dispatchers often work with early cut-off times due to the time it takes to process online orders, meaning deliveries can lapse into the next day.
Pro tip
Cutting-edge software now has the capability to carry out automated tasks that replace many manual procedures, from stock orders (ensuring there’s always enough available) to line-haul to automatic fleet management.
With more automation and smart systems preparing packages for dispatch much quicker, delivery drivers are able to leave much later,order cut-off times can move later in the day, enabling retailers to offer their customers same day delivery for orders placed even in the afternoon.
Removing human error and slowness from important but basic tasks frees up personnel for more sophisticated tasks that help drive the company forward.
3. Poor order tracking
We’re all members of a digitised society, which means we’re used to having the latest information at our fingertips, as and when we need it.
It’s no different when we order a package: we like to know what time the driver is going to arrive so we know when to be at home and avoid redelivery or going to pick it up ourselves.
The trouble is, delivery companies often fail to provide customers with any kind of order tracking, let alone a sophisticated system that lets you have full visibility throughout the journey.
Customers often resort to guesswork and feelings of frustration as they try to organise their day around their delivery.
Pro tip
Today’s digital logistics software means live tracking is now an accessible tool for logistics companies.
It’s especially important for same-day delivery, with the added pressure of dropping off goods in a smaller time frame.
Customer anxiety tends to be higher than normal, and giving them access to a real-time tracking system that keeps them updated every step of the way is a great way to smooth out their concerns and manage expectations.
4. Long travel distances (and bad addresses)
The sudden boom in e-commerce has caught many retailers off-guard, with precious few having adequate local fulfilment centres or stores in the vicinity to provide same-day delivery.
Distance from a storage facility, whether it be a warehouse or physical storefront, to the customer, then, is proving to be one of the chief stumbling blocks to quicker delivery.
It’s something compounded by the fact that when drivers do reach the vicinity of a drop-off, poorly filled-out address forms and a lack of a geo-location pin means they can’t locate a customer’s exact spot.
In UAE cities, this is a common issue because of no agreed-upon address standard.
This excuse won’t wash with customers, though, who are still understandably annoyed by delays. Worse, it makes your company look inefficient, putting the onus on you to provide a solution.
Pro tip
The rapid growth of ecommerce calls for retailers to have access to a strong network of distribution centers more than ever before, but automation allows us to get smart.
Take route planning for aggregated orders. When a retailer has a batch of orders going to a similar area, an automated system can create efficient routes that deliver the items in the smartest manner possible. This cuts down on trips to fulfilment centres, with route optimization saving precious time and money.
Smart addressing, too, is a form of automation that uses a special set of algorithms to predict a customer’s address from basic information and build a delivery route for the courier.
It creates an archive of addresses that stores drop-off info and has a pin location ready for the next delivery, while a built-in Pin Confidence Score is created to measure performance and provide automatic upgrades to saved data.
5. Providing consistent quality customer support
Customers expect to encounter courteous and professional staff no matter the delivery timeframe; after all, they’ve paid more for the privilege of receiving their items sooner.
Yet, same-day delivery means that everyone has to work to a tighter schedule, which can lead to employee tension throughout the supply chain, from warehouse teams to drivers. This may sometimes spill over to negative dialogue between the retailer and customer, a big no-no in an industry where courtesy is king.
Pro tip
Every good retail company trains its staff to deal with customer issues with grace, but going the extra step to make sure that employees are always in full control of cutting-edge delivery technology is also a smart move.
From a live chat operative who is able to identify and take action to fix issues along the supply chain, to a driver who can provide live location updates, a well-trained fleet with access to the latest digital communication tools is the key to calm and collected customer service.
6. Meeting tight SLAs
Any retailer that offers same-day delivery knows that meeting tight service level agreements (SLAs) is at the top of the list of priorities.
Failure to do so means a drop in customer trust, a lower chance of future sales and referrals, and even a dip in staff morale due to not meeting their targets.
As we transfer from analog systems to digital tools, it’s easy to pinpoint why this is happening.
A fragmented delivery system means there’s often a disconnect between retailers and logistics companies, who are often singing from different hymn sheets due to obsolete methods like spreadsheets and paper files.
This often leads to poor planning for logistic bottlenecks that might appear, leading to the delays that break those all-important SLAs.
Pro tip
Collaboration is paramount to meeting SLAs, but this is only truly effective when all members of the supply chain are referring to the same source.
More delivery companies than ever are turning to digital logistics platforms that solve many of these issues at a stroke.
They provide a one-stop dashboard where all members can see an overview of the entire logistics process. A simple plug-and-play integration with online storefronts quickly facilitates this, allowing retailers access to professional delivery fleets, a real-time order system and automated order fulfilment that are combined to ensure a seamless delivery process.
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