Optimizing Last-Mile Delivery: A Key Driver for Retail Growth

A UPS delivery truck in a suburban area.

A recent study by Incisiv and Veho emphasizes the significant impact of last-mile delivery on retail and D2C sectors, highlighting its role in driving revenue, customer loyalty, and operational efficiency.

The Last-Mile Delivery Imperative

The retail landscape is witnessing a transformative shift, with last-mile delivery emerging as a pivotal factor for growth in the retail and direct-to-consumer (D2C) markets. A study conducted by Incisiv and Veho, titled “Catalyzing Growth: How Last-Mile Delivery Drives Revenue, Boosts Loyalty, and Enhances the Bottom-Line,” delves into the perspectives of 161 North American retail and D2C brands. The findings are clear: a robust last-mile delivery strategy is not just a value-add; it’s a necessity for staying competitive.

Diverse Delivery Options: A Growth Catalyst

The study underscores the consensus among brands on the need for a spectrum of delivery choices. A striking 77% of surveyed brands recognize the importance of offering multiple delivery options as a lever for growth. Furthermore, the ability to provide two-day delivery is deemed critical by 81% of brands to meet customer expectations and drive satisfaction.

Strategic Insights from Industry Leaders

Giri Agarwal, the Chief Strategy Officer at Incisiv, comments on the study’s insights, stating that last-mile delivery is a cornerstone for retail success. He notes that in the current competitive environment, the ability to offer quick, diverse, and flexible delivery options is indispensable for fostering growth, loyalty, and profitability.

Itamar Zur, CEO and co-founder of Veho, echoes this sentiment, emphasizing the importance of excellence in last-mile delivery. He points out that customers not only expect but also appreciate a top-tier delivery experience. Zur highlights that exceptional last-mile delivery and return processes have a tangible and positive impact on a brand’s financial performance.

Quantifiable Benefits of Last-Mile Excellence

The study presents compelling data on the benefits of optimizing last-mile delivery:

  • An 8.9% increase in e-commerce conversion rates is attributed to providing a variety of last-mile delivery options, which empowers consumers with choice and control, influencing their purchasing decisions.
  • A 15.3% uplift in net promoter score (NPS) demonstrates the influence of exceptional delivery experiences on customer loyalty and brand advocacy. 82% of brands report improved repurchase rates and loyalty following superior last-mile experiences.
  • A 10.6% growth in average order value is linked to the provision of fast and flexible delivery offerings, encouraging consumers to make larger purchases.
  • Operational cost reductions are recognized by 92% of brands, illustrating how effective last-mile strategies can reduce costs related to delivery errors, returns, and customer service interactions, thereby underscoring the operational and financial advantages of refining delivery processes.

The study by Incisiv and Veho makes it clear that last-mile delivery is not just a logistical challenge but a strategic opportunity. Retailers and D2C brands that harness the power of last-mile delivery can expect to see not only enhanced customer satisfaction but also significant growth in their bottom line.

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