For retailers and e-commerce companies, the road to success in 2023 will depend on how well they can deliver cost-effective and flexible delivery options to customers. That’s according to the 2023 Bringg Barometer: State of Last Mile Delivery report, published by delivery management platform company Bringg this month.
The company surveyed 500 managers in retail and e-commerce and found that most agree that to stay competitive this year, they will need to offer multiple flexible delivery options to meet consumer demands. The issues came to light following a tumultuous 2022 that forced companies to focus heavily on cost efficiency, according to the report.
“In 2022, we witnessed how the aftermath of Covid-19 affected both retailers and consumers. Supply chain crises dominated the delivery industry, and consumer expectations continued to evolve and put pressure on [retailers’] delivery operations,” Bringg said in a statement detailing the report’s findings. “The economic instability and inflation forced both retailers and consumers to focus on cost efficiency, posing a major challenge for businesses to stay profitable, while still meeting consumer demands.”
According to the report, 87% of respondents said that digital cart abandonment is a problem, with 44% citing a lack of clarity about delivery options prior to check out as the key culprit. Another 35% said a lack of delivery options in general is the main reason for cart abandonment.
“The retail industry evolved at an unprecedented rate in 2022, and consumers became accustomed to fast, same-day delivery,” Bringg’s CEO Guy Bloch said in a press release announcing the report’s findings. “Ultimately, in 2023 the delivery experience frontier is moving toward new elevated standards, where consumers expect convenience and control, demanding flexible delivery options, transparent communications, and all at an affordable price. Retailers need to focus on investing in the right technologies and leveraging relevant partners, to successfully compete in an increasingly saturated market.”
The report cites automated delivery scheduling as one tool that will help in the year ahead. More than 60% of survey respondents said they plan to offer self-scheduled delivery this year, and 56% said they will include subscription-based delivery services.
Other survey findings underscore the complexity of the delivery landscape, including difficulties integrating services and technologies with channel partners:
89% of respondents said they are struggling with their last-mile delivery operations, with the top reason being the complexity of their tech stack (37%); accordingly, more than one in three struggle to manage multiple fulfillment channels through disparate technologies.
Lack of flexibility is affecting both cost and capacity, with 49% of retailers still lacking flexibility during peak seasons, and 37% unable to scale up or down drivers as necessary, resulting in reduced profits.
32% of respondents claim that integration with third-party carriers and fleets is a growing challenge, causing lack of real-time delivery options which negatively affects cart abandonment as well as customer loyalty and retention.