By Nishith Rastogi
In recent years, consumer expectations have undergone a radical transformation. The introduction of same-day deliveries has altered consumer mindsets so dramatically that any business that does not offer seamless, predictable, and lightning-fast delivery options is quickly sidelined. Moreover, industry research indicated the importance of delivery precision, in addition to speed – nearly three-quarters of customers would abandon retailers over poor delivery experiences.
Another important aspect is that Last-mile delivery accounts for nearly 53% of total shipping costs. Therefore, it’s crucial for businesses, particularly those in the Retail, 3PL/Courier, Express, and Parcel (CEP) sectors, to embrace forward-thinking strategies. These should not only expedite deliveries but also enhance customer delight and drive business profitability.
How can businesses achieve this goal? The answer lies in establishing a reliable first impression, which can be measured through the First Attempt Delivery Rate (FADR).
Understanding FADR
FADR measures the percentage of deliveries successfully completed on the first attempt without re-delivery or additional manual intervention. It is used as a performance metric in logistics and shipping industries to evaluate the expediency and efficiency of delivery operations.
By improving First Attempt Delivery Rates, Retail and 3PL/CEP businesses can enjoy a plethora of benefits, including:
- Enhanced brand reputation through positive word-of-mouth: Timely, friendly, and reliable deliveries prompt customers to share their positive experiences, expanding the brand’s customer base.
- Customer loyalty and retention: Consistently delivering on time significantly improves customers’ perception of the brand, fostering stronger loyalty and retention.
- Competitive edge: Faster delivery options and exceptional last-mile experiences attract consumers, which puts the organization ahead of competitors.
- Minimized delivery expenses: Prompt first-time deliveries reduce the need for costly redeliveries, effectively curbing delivery expenses.
Using Technology To Improve First-Attempt Delivery Rates
Delayed or missed deliveries pose significant challenges for both the end consumers and the entire supply chain. These disruptions result in increased losses for all parties involved. In fact, 39% of brands consider shipping delays as one of the top supply-chain-related challenges for the years to come.
While minor delays are inevitable, if they recur often, they can impact FADR negatively and, eventually, the brand reputation. Therefore, to improve the FADR values, businesses should leverage AI and other supply chain-related software to foster smooth, swift, and streamlined deliveries.
How can delivery businesses leverage technology to achieve a better FADR?
A software embedded with modern technologies such as AI, ML, advanced analytics, etc., can do much more for logistics personnel. It can:
Obstacles such as severe weather conditions, heavy traffic congestion, unforeseen vehicle breakdown, and customers not being available at home cause inevitable delays that lead to poor FADR. These issues can be effectively mitigated with the help of algorithm-driven intelligent real-world-ready logistics software.
- Efficiently plan routes: With AI-based software, brands can utilize predictive analysis algorithms to account for traffic conditions and recommend quicker routes.
- Allocate customer-preferred delivery time: To ensure customer availability during order deliveries, logistics providers can offer flexible time windows. By allowing customers to choose a convenient time slot when they will be at home, this proactive approach reduces the need for redelivery and enhances overall efficiency.
- Reschedule delivery time and date: If the customer is unavailable, drivers receive instant notifications, and the software automatically reschedules the delivery.
- Detects exact location: The GPS trackers pinpoint the exact delivery location and assist drivers in reaching the spot without hassle.
- Track deliveries in real-time: IoT devices and RFID tags or sensors can be attached to assets, vehicles, or packages to provide consumers with real-time location and status updates.
India’s logistics sector already benefits immensely by embracing technology in delivery operations. According to McKinsey, AI could generate $1.3 trillion to $2 trillion of value in the global logistics industry by 2025 as it optimizes the supply chain, enhances customer experience, and builds a positive FADR for brands.
The bottom line
The importance of tracking and maintaining high FADRs cannot be overstated, mainly because 93% of consumers rely on reviews before purchasing. As India prepares to welcome an additional 80 million online shoppers to its already substantial base of 125 million e-commerce users, it becomes imperative for retail and logistics companies to harness technology to enhance FADR and optimize their delivery strategies.
(The author is Nishith Rastogi, the Founder and CEO of Locus.)
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