Retail pricing is a balancing act on a good day. But as peak season approaches, retailers and shoppers are keenly aware of the cost of goods — and the delivery fees to get them where they need to be. This is especially true in 2023 when the entire retail industry is dealing with the effects of inflation.
While retail sales saw a small 0.3% bump in the spring, economists expect a slowdown in consumer spending during the second half of the year. These economic conditions put logistics teams in a tough position. Holiday shopping season already puts pressure on retailers to price products competitively, but what about inflation-driven transportation cost increases? Now’s the time to get out ahead of those last-mile delivery costs so they don’t add up to a poor customer experience.
What we Know About the Expensive Last Mile
We already know the last mile is the most costly part of the supply chain. A recent study found that retailers incur costs around $10 per online order in the last mile, but consumers only cover about 80% of that with charged delivery fees. We also know delivery fees disproportionately result in online shopping cart abandonment — and that consumers prioritize fast delivery with an expectation of two days or less due to an increase in same-day delivery requests.
With those facts and figures in mind, increasing delivery fees or slowing down delivery times to save money are both no-gos for retailers. Instead, logistics teams need to look for cost-cutting measures within their control to help keep costs down while still meeting customer expectations. Crowdsourced delivery is an excellent place to start. With delivery options like batching, routing and direct shipping from warehouses, platforms like Roadie let retailers lower their own costs so there’s less to pass along to the customer.
Get Fast and Consolidated Delivery with Same-Day Routing
When it comes to cost-cutting, retailers need to start by ensuring that they’re getting the most efficiency possible out of logistics practices. For every extra trip a delivery driver makes between warehouse, retail store and customer doorstep, the retailer’s costs increase — and so does the time the customer has to wait for their order. Route consolidation, or batched and routed delivery, is the better answer.
With the batched and routed approach, a single driver can pick up orders from a chosen origination point and drop them off with customers along the most efficient possible route. This is an area where Roadie’s crowdsourced delivery platform shines. With a driver network equipped with everything from compact cars to box trucks, retailers can have a single driver pick up to 30 orders at once (usually a minimum of 10) and let the Roadie app do the heavy lifting of efficiently mapping the drop-offs with customers.
Not only does this approach maximize a retailer’s logistics dollars by getting the most out of the driver, it also reduces the number of delivery vehicles on the road, so retailers and their customers can feel good about a reduced carbon footprint. And with Roadie’s same-day delivery technology, you can be efficient with routing while still meeting consumer demand for ultrafast fulfillment.
Keep Oversized Items from Overstretching the Budget
The evolution of e-commerce puts the entire world of products available for easy customer ordering with the click of a button. That includes large and heavy items like appliances, furniture and gym equipment — most of which can be delivered for free, despite the higher shipping costs usually associated with overpriced items.
Generally speaking, retailers absorb the higher shipping costs for large items to give customers the perception of added value, or they build some or all of the added cost into the sale price of the item. While these are both legitimate strategies, retailers should strongly consider opportunities to lower their logistics fees in ways that will actually lower the cost burden on both sides of the purchase. Having a lower cost to pass along keeps retailers more competitive and keeps customers happy with the great deals they’re getting.
Solutions like Roadie XL™ make sending oversized, heavy, and big and bulky items easier than ever, with more reliable delivery times and pricing than traditional carriers can offer. While retailers often deal with fluctuating dimensional-weight pricing, uncertain delivery timelines and unexpected delays with traditional carriers, Roadie XL™ has none of those constraints. In addition to abiding by order cut-off times and delivery windows that the sender specifies, Roadie XL™ offers flat-rate pricing for oversized items and doesn’t even require crating or other special packaging.
Cut Costs by Streamlining the Supply Chain
Whether a retailer is delivering large items with less hassle or multiple small orders in one fell swoop, the fewer stops each order has to make, the more time- and cost-efficient deliveries will be. This is true on the fulfillment side of the supply chain, too. Streamlining warehousing, sorting and distribution processes can help any retailer gain back valuable time and reduce labor costs. Specialized solutions like Roadie Direct™ can make that happen.
Imagine that a supplier brings a truckload of merchandise to the retail warehouse, but instead of sorting the delivery, forwarding portions of it to distribution centers and then sending the rest on to retail stores as the point from which to fill customers’ orders, all those extra steps are skipped. Roadie Direct™ helps retailers implement sorting, staging, routing and delivery components directly into their warehouses for super-streamlined order fulfillment.
Unlike traditional logistics that can add days to the order fulfillment process, Roadie Direct™ can reduce fulfillment times to just a few hours. This doesn’t just mean better margins — it means better customer loyalty. According to recent research, 77% of shoppers are more likely to purchase an item if it can be delivered in two days or less, but 65% of consumers will abandon shopping with a retailer altogether after two or three late deliveries. When it costs five times more to acquire a new customer than to retain one, trimming the fat from the fulfillment process can help retailers build more sales from an existing, happy customer base.
Leverage the Efficiency of the Largest Local Same-Day Delivery Network
No matter which Roadie features a retailer takes advantage of, each low-cost last-mile delivery approach leverages Roadie’s widespread, flexible network of independent drivers. With more than 200,000 on-demand drivers serving 20,000 ZIP codes, using Roadie gives retailers of all sizes the opportunity to reach more customers same-day without passing along exorbitant delivery fees to the customers. And with the Roadie team on hand to tailor the retailer implementation, it’s easy to get crowdsourced delivery up and running in time for peak season.
