How to improve last-mile delivery in an online store

The last mile is the final stage of shipping, which runs from the moment the parcel leaves the warehouse until it reaches your customer. Even if you do not realise, this is also where a large part of your margin slips away and where your customer decides whether to buy from you again.

Of course... even if you do not have vehicles or your own fleet, there are quite a few things you can do to improve that last mile in your online store.

Think about it: you may have the best product, impeccable product pages and a checkout that runs like clockwork, but if the parcel arrives two days late, or the courier finds no one at home and returns it, all that work falls apart in those final miles. The customer may not remember how good their experience on your website was, but they will not forget that their order was delayed.

It may sound a little harsh, but I say it based on experience and verified data. 84% of shoppers will not buy from a brand again after a negative delivery experience, according to the data collected by elogy. And that same final stage accounts for around 53% of the total shipping cost. In other words: the last mile is both the most expensive part of your logistics operation and the factor with the greatest influence on whether a customer returns.

The good news for a store of any size is that a large part of this stage is played out on your turf, through decisions that are entirely under your control, rather than in the courier's van.

Are you sure everyone wants to receive the parcel at home? Really?

Many customers, for example, work away from home, and no one is at the address in the middle of the morning, meaning that home delivery ends up becoming an “absent” notification and a second attempt that costs you money.

Providing alternatives changes things considerably. Collection from a nearby point (what is known in English as a pick-up point), smart lockers or collection from your own physical store, if you have one, allow customers to choose how and when it suits them best. And they work: collection-point networks reduce failed deliveries by between 30% and 40%, according to Celeritas, because the parcel waits for the customer instead of the other way around.

There is another reason to offer these options, and that is the price. 34% of shoppers consider the cost of shipping to be the most important factor when ordering online, compared with 23% who prioritise speed, according to a ShipStation survey reported by eMarketer. A collection point is usually cheaper than delivering a parcel door to door, so you can pass those savings on to the customer, and everyone benefits.

Look at how Zara operates. Its in-store collection service is not only free; it has even installed automated lockers so that you can collect your order without queuing, using only a code.

The option is so convenient that a large part of its online purchases end up being collected in-store rather than delivered to customers' homes, according to analyses such as this one. In the process, every customer who enters to collect their parcel walks past the latest products and impulse-buy items, so we can state that in-store collection has an impact on conversion.

Amazon plays exactly the same game in the last mile with its network of lockers (the well-known lockers), but because it does not have its own network of stores, it places them in convenient locations such as supermarkets and petrol stations.

You do not have to be a giant to copy the idea: simply connect your store to a network of collection points and offer it as an alternative at checkout.

It is not only an unpleasant surprise at the final stage of the shopping basket; it is also one of the main causes of lost sales. 48% of shopping-basket abandonments are due to unexpected costs (shipping, taxes, fees) that appear late in the process, according to Baymard.

The solution is not to hide shipping costs until the end: it is to show them as early as possible.

Display the cost and estimated delivery time on the product page itself or, at the very least, on the shopping-basket page, before the customer starts entering their details. If the exact amount depends on the postcode, show at least an indicative range.

When it comes to delivery times, apply the usual rule: promise what you can deliver. It is better to say “arrives in 3-4 working days” and have it arrive in two than to promise 24 hours and fail. Every missed deadline results in a complaint email and a customer who will think twice next time.

A delivery that fails on the first attempt is one of the most expensive situations there is: you pay for delivery twice (or three times), the customer gets upset and the parcel often ends up returning to the warehouse. And it happens more often than it may seem. 24% of retailers acknowledge that more than 1 in every 10 orders is not delivered on the first attempt, according to elogy.

A large proportion of these failures have a silly cause: an incorrectly written address. A missing building number, the wrong floor, a changed postcode. It is worth taking care over how you capture the address during checkout, validating the fields and providing the option to add instructions (“doorbell broken, call mobile”, “leave with concierge”).

The other major remedy is something as basic as sending a notification. A message on the day of delivery with an approximate time slot and the option to reschedule greatly reduces the number of “absent” recipients. A customer who knows that their parcel will arrive between 4 p.m. and 6 p.m. can arrange to be there; one who does not know goes out to buy bread just as the courier arrives... and that drives up your reverse logistics costs.

Between “thank you for your purchase” and the doorbell ringing at home, there is a silence that creates anxiety and, above all, support tickets. The classic “where is my order?” is one of the enquiries that places the greatest strain on online stores' customer service teams.

Properly implemented tracking resolves this in a very high percentage of cases. But “properly implemented” is the important detail here: simply providing a tracking number and leaving the customer to find their own way around the courier's website is not enough. It is better if you send notifications at every milestone (order prepared, out for delivery, delivered), with a clear link and, if possible, your own branding in those emails. Every notification you send means one less enquiry coming in and one more reassured customer.

The last mile is also an opportunity to be remembered, and this is where smaller stores can make a difference compared with the giants. The moment someone opens your parcel (unboxing) is one of the few physical points of contact you have with your customer, so make it memorable.

The most frequently cited example is Glossier, the cosmetics brand. Its orders arrive in a padded pink pouch, with stickers so customers can decorate whatever they like and a small personal touch inside. It may sound trivial, but those packages ended up in thousands of unboxing videos (the moment of opening) uploaded by the customers themselves, meaning that a large part of its community was built there, without spending a single euro on advertising.

Another example, in the opposite direction, is Rothy's: this footwear brand sends its shoes directly in their original box, without the typical packaging that contains one box inside another. Less material, cheaper shipping, greater sustainability...

Two different approaches, the same underlying idea: packaging also communicates and embodies brand values.

And it pays off. According to a Dotcom Distribution study cited by byrd, 40% of consumers are more likely to buy again from a store whose packaging they perceive as thoughtfully prepared. You do not need the budget of a major brand to apply this. A handwritten note, a small sample of another product, tissue paper bearing your logo or a simple “thank you for placing your trust in us” can make a big difference and cost very little.

That detail is not easily replicated by a huge platform or a marketplace, and it is exactly what makes someone remember your brand.

But be careful: overdoing it is not good either. Excessive packaging makes shipping more expensive and, increasingly, loses points with customers who value sustainability. The balance lies in taking care of the presentation and the security of the order, but without filling the box with plastic, as Rothy's clearly understands by removing layers instead of adding them.

When we think about the last mile, we imagine a parcel travelling towards the customer. But incidents sometimes occur and there is a return journey that some stores do not control and which forms part of the same problem: the return. In fashion, the return rate is extremely high, and a poorly managed return hurts twice as much because you pay for shipping twice and also risk losing the customer.

A clear and straightforward returns policy helps you sell more. Customers who know that making a return will require little effort buy with less hesitation. And in-store or collection-point drop-off works in your favour here again: if the customer can start the return in the same place where they collected the order, the entire process becomes simpler for them and cheaper for you. This is why so many brands with physical stores encourage in-person collection and returns: the customer walks past the shop window once again.

Almost all stores measure up to the point of sale and then say goodbye. But if you do not know what percentage of your orders arrives on the first attempt, how many incidents you have or how much each successful delivery truly costs you, you are managing the most expensive part of the process blindly.

You do not need a complex dashboard. Three figures are more than enough to get started:

Review them carefully every month. If you see that one courier fails more often than another in your area, replace it. If incidents surge in a particular province, investigate why. The last mile improves when you pay attention to it, so do not simply leave it alone.

If the answer is “more or less”, there is your first opportunity for improvement. The last mile is expensive and complicated, yes, but it is also where a medium-sized online store can differentiate itself from large platforms, simply by making a few straightforward decisions: providing delivery options, being honest about timeframes, sending proper notifications and taking care over the final detail.

Start by measuring where you stand now and choose just one item from this list to work on this month. The customer who receives their order on the first attempt, on time and well presented may not say so aloud, but they will return.