Why E-Commerce Companies Should Focus On Improving Their Last-Mile Delivery Experiences
Ram Nikhil Dodda is Head of Product Management for Amazon Key.
From clothing to electronics, millions of packages are shipped each day globally. In its 'Global Parcel Shipping Index,' which examined 2022 data from 13 countries, Pitney Bowes, a company that offers mailing and shipping solutions, found that in that year, 'global parcel volume reached 161 billion.' That's 'equivalent to 5,102 parcels shipped every second.' Additionally, Pitney Bowes predicted that by 2028, 'parcel volume will most likely reach 225 billion.'
That projection is not surprising, given the extremely high rates of online shopping. Consider data from the U.S. Census Bureau, which revealed that 'the estimate of U.S. retail e-commerce sales for the fourth quarter of 2024, adjusted for seasonal variation, but not for price changes, was $308.9 billion.' And that's just in the United States. As people shop online, they have expectations about deliveries. For instance, according to a 2024 report by global consulting firm AlixPartners, U.S. consumers 'want home delivery within 3.5 days.' If a retailer doesn't provide that, 'around 25% will shop elsewhere.'
Consumers have more choices than ever when it comes to online shopping. Providing seamless last-mile delivery experiences to consumers is no longer an option. For their e-commerce companies to stand out and win consumers' business, leaders must focus on improving their last-mile delivery experiences.
To start improving their last-mile delivery experiences, e-commerce teams should prioritize several key metrics. There are two broad groups of key metrics—customer-facing and operational.
On the customer-facing front, there are three crucial metrics. First, there's the on-time delivery rate, which is linked to delivery promise (the commitment a company makes to a customer) and delivery window (the expected timeframe for a package to arrive). Essentially, e-commerce companies need to deliver orders within the timeframes they've promised. The tighter the delivery window, the more challenging it is to meet that expectation. Some e-commerce companies have more precise delivery windows than others, sometimes narrowing them down to the hour. To improve on-time delivery rates, e-commerce leaders should set realistic delivery promises and delivery windows. Then there is the order accuracy rate, which refers to getting the right items to customers. Order accuracy is a big driver of customer satisfaction. Getting the wrong item can derail a customer's plans. Finally, there's the first-attempt delivery rate, which is whether or not the delivery is made on the first try. This is another important driver of customer satisfaction, as it's a hassle for people to reschedule or arrange to retrieve missed deliveries.
As for operational metrics, there are three main ones. First, there's the delivery defect rate, which refers to the percentage of orders that don't reach customers as planned due to late deliveries, incorrect or defective items or issues such as theft. For a good e-commerce experience, customers should receive a correct, undamaged product on the first delivery attempt. Moreover, delivery defects can have serious financial repercussions for e-commerce companies. Next, there's the cost per delivery rate. On a basic level, e-commerce companies should strive to minimize costs relative to their package volume. The last key operational metric e-commerce leaders should focus on is driver productivity, which includes measuring average deliveries per route, total distance traveled, time spent on each delivery and the rates of successful first-time deliveries.
To be able to deliver on key metrics, e-commerce companies should focus on building several customer-facing and internal features.
Arguably, the most important customer-facing feature is real-time order tracking. Consumers expect to know where their packages are at any given moment. Supply chain platform Verte's 2022 survey revealed that 91% of U.S. consumers ''actively track their packages.'' Related to real-time order tracking? Automated delivery updates. Overwhelmingly, customers want to know where their packages are at any given point in time. In the Verte survey, 82% of U.S. consumers expressed 'high or very high expectations for accurate delivery information when tracking their packages through an app.' Flexible delivery options are another important feature that e-commerce companies should offer. Many people want control over when they receive their packages—according to McKinsey research published in 2025, 'more than 50 percent of survey respondents place importance on being able to schedule deliveries.' Finally, many consumers seek convenient pickup locations, and e-commerce companies should secure strategic partnerships that give customers more choices. A 2024 study by Retail Economics and InPost, a parcel locker delivery service, found that 52.8% of consumers in the United Kingdom 'have used a delivery locker at least once.'
Internal features are the foundation of e-commerce companies' ability to power better last-mile delivery. For one, e-commerce companies should improve drivers' access to buildings, namely, gated communities and apartment buildings, in order to reduce the chances of late or missed deliveries. Address validation is another crucial feature drivers need for accurate deliveries. Finally, features that enable secure, seamless delivery options, such as drivers being able to quickly leave packages in a preferred area (such as the mailbox versus the front porch for smaller items or delivering more expensive items inside the garage instead of on the front porch) can help reduce damage and theft. Some e-commerce companies, of course, rely on delivery partners, such as national postal carriers. When choosing partners, they should screen for capabilities and look for opportunities to collaborate in these areas.
Implementing the metrics and features mentioned above is only one part of the equation. E-commerce leaders need strategic, data-driven approaches to their last-mile delivery operations to truly optimize performance and customer satisfaction.
A key mistake e-commerce leaders should avoid is failing to weave in last-mile delivery planning into their businesses from day one. The longer they wait to do so, the more challenging it becomes to seamlessly integrate new features into their existing infrastructures.
Leaders should also avoid adopting a one-size-fits-all approach to last-mile delivery. Last-mile delivery strategies should be tailored to local conditions, such as building types and population density. Whether rolling out a strategy as a whole or a new feature, e-commerce companies should prioritize testing it in one area and then iterate so the feature can work in other areas.
Finally, e-commerce leaders should invest in the data infrastructure to regularly track key metrics and customer feedback—and take action as needed. Ultimately, it's through iterating that e-commerce leaders can continuously improve last-mile delivery experiences for their customers.
Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
3 hours ago
- CNBC
Americans are losing spending power, say researchers: Most can no longer afford a 'minimal quality of life'
In 2023, about 11% of Americans officially lived in poverty, according to the U.S. Census Bureau. Even more struggle financially, though — and the share may be higher than you think. Many of the headline economic stats you see are based on "survival indexes," says Gene Ludwig, founder of the Ludwig Institute for Shared Economic Prosperity, and don't reflect Americans' full financial picture. "What people are thinking about — a real shared prosperity — is not, 'I can survive,' but, 'What does it take to live a middle-class life?'" he says. "'What does it take to be on the first rung, at least, of the American dream?'" To that end, LISEP developed a "Minimal Quality of Life Index," which takes into account not only essentials, such as food and shelter, but also the costs living a fulfilling life with a chance at upward mobility. Food costs in the model, for example, include occasional trips to casual restaurants as well as the cost of hosting an annual holiday meal. The index factors in basic leisure costs, such as cable and streaming subscriptions, and trips to the six movies and two MLB games per year in the cheap seats. According to LISEP's analysis, most Americans don't meet that standard. In 2023, the bottom 60% of households by income fell well short of the threshold for a minimal quality of life. That's largely because wages have failed to keep up with rising costs, the researchers say. Medical premiums rose 301% from 2001 to 2023, they note, while travel expenses were up 170%. Rent grew by 131%. The cost of raising children, which includes saving for higher education, by LISEP's estimates, grew by 107%. With wages failing to keep pace, LISEP finds that consumers' real spending power decreased by 4%, on average, over that period. Americans who fall short of the minimal quality of life costs may sink into debt or have to forego important financial planning steps, such as saving for college or investing for retirement, to afford modest discretionary expenses such as a gym membership or an occasional vacation. For families looking to get on the path to upward mobility, "it is hard to give advice without being patronizing," says Kevin Brady, a certified financial planner with Wealthspire Advisors. If your budget is stretched thin and you have mouths to feed, there's only so much financial maneuvering that can help. That said, there are a couple key things you can do to lower your living costs and help you put more money toward your goals. You may feel guilty about spending on some of the things that bring you or your family joy, but those small luxuries likely don't break your budget. "I get tired of the 'Stop your Starbucks latte habit' [advice], because in reality it's not people's fault," says Laura Lynch, a CFP and founder of The Tiny House Adviser. "The structures around us have created an expectation of a lifestyle that is increasingly becoming unreachable for folks." You're better off focusing on the major tentpoles of your budget, experts say: Housing, transportation and food costs. Marcos Segrera, a CFP and principal at Evensky & Katz/Foldes Wealth Management, calls these the "Big Three," and attacking them may involve some creativity. "This might mean refinancing a mortgage, choosing a more fuel-efficient or used car, or embracing meal planning to cut down on food waste and expensive takeout," he says. You may want to consider outside-the box solutions to lowering your housing costs, says Lynch. "Co-housing, tiny homes, [accessory dwelling units], multi-generational ownership are all ways to share expenses, resources and create wealth," she says. It's easier to fund your financial goals — paying down debt, building an emergency fund, investing for the future — if there is more money to go around. So "one other piece of advice I have here is to not just focus on expenses, but think more about growing your income however possible," says Brady. "Again, it is easy to say but harder to do this." Boosting your income may mean asking for a raise or finding a different job altogether. Workers who switched companies in May earned an average pay bump of 7%, according to data from ADP. It may make sense to look for inexpensive ways to increase your workplace skills or to familiarize yourself with emerging technologies, such as AI, Brady says. You may even think about picking up a side hustle. You may find it less difficult, in the end, to bring in more money than to cut back on what you provide for the people you love. "Look at both sides, not just spending," says Brady. "Because with a young family, that might be hard to change."
Newsweek
a day ago
- Newsweek
NASCAR Insider Questions RAM Trucks' Timing of Entering the Cup Series
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. NASCAR insider Kevin Harvick has welcomed the entry of Stellantis' RAM Trucks into the Truck Series. However, considering RAM CEO Tim Kuniskis's goal of the brand racing in the Cup Series eventually, Harvick has questioned the timeline for RAM's Cup Series entry. Will it happen in 2027 or 2028? RAM Trucks made the big announcement of joining NASCAR in 2026 at the Cup Series race at Michigan International Speedway. Though the brand has yet to form a team, it remains confident in its plans to race in the Truck Series next year at Daytona. Harvick opened up on RAM's entry into the sport and questioned why it had left 13 years ago. Speaking on his Happy Hour podcast, he said: A general view of the Ram announcement that its brand will return to NASCAR competition, scheduling a Craftsman Truck Series campaign beginning in 2026 on the midway prior to the NASCAR Cup Series FireKeepers Casino... A general view of the Ram announcement that its brand will return to NASCAR competition, scheduling a Craftsman Truck Series campaign beginning in 2026 on the midway prior to the NASCAR Cup Series FireKeepers Casino 400 at Michigan International Speedway on June 08, 2025 in Brooklyn, Michigan. More"It's really neat to see RAM come back to the Truck Series. They were always such a big part of the NASCAR Craftsman Truck Series and everything that happens and has happened with it through the years. So they just, I mean — it's just NASCAR. They're just a NASCAR brand. I don't know why they ever left. I'm happy that they're back. "I can't wait to see who their teams are going to be in the Truck Series. I think it will be very interesting to see that play out. Maybe they've already got them picked. But building these programs is always intriguing." Harvick added that RAM will have to mostly focus on the aero side of performance in the Truck Series. But to race in the Cup Series won't be that easy, a point that prompted him to question RAM's timeline to enter the top tier. He said: "It's a great time to come into the Truck Series, because of the spec engine. You don't have to develop an engine. You basically are going to develop the aero side of things with your body. It's a lot simpler to get started in the Truck Series. The hard part will be getting everything situated for Cup and the timing of that. Is that 2027? Is that 2028? What is that timing?" The former NASCAR driver believes RAM's Cup Series arrival in NASCAR will benefit the other three manufacturers. He explained: "But to have them back in the Cup Series is going to make it better for the Toyota, Chevy and Ford teams, because those manufacturers are going to have to lose some people and they're going to have to either keep spending the same money with less teams, or spend a little bit more money. So, as a team owner in the past, when more manufacturers compete, the better it is for the team, because you get more funding, which means you can sell the sponsorship for less."
Motor 1
a day ago
- Motor 1
Ram: We've Thought About a Cheap Truck Like The Slate 'A Million Times'
Even for someone like me, who doesn't want, let alone need, a pickup, the idea of a cheap electric truck is certainly compelling. The tiny EV workhorse from a new company partially funded by Amazon founder Jeff Bezos will start at around $25,000. Factoring in the federal tax credit, assuming it doesn't disappear under the Trump administration, the diminutive pickup could drop below the $20,000 mark. But there's one high-ranking Stellantis official who doubts people will actually settle for the spartan version. In an interview with CNBC , Ram CEO Tim Kuniskis says buyers will inevitably want to add features they consider essential, which would significantly increase the out-the-door price: 'Now, what's it going to actually transact at in the marketplace… when people start to option them up, it's not going to be $20,000. It's going to be $35,000, and by the time you get to $35,000, you're in mid-size truck territory.' For reference, a base Ford Ranger with no options costs $35,025, including destination charges. Photo by: Slate Kuniskis argues that while the Slate is a 'super interesting' entry in the lucrative pickup segment, the actual configurations most people will buy put it in direct competition with established players. He might be on to something. A glance at the Slate's standard equipment list shows just how much you give up to hit that $20,000-ish price point. The entry-level version, with its crank windows , skips the infotainment and even speakers. You also have to pay extra for door cubbies and Bluetooth controls on the steering wheel. Whether adding these extras will push the price up by $15,000 remains to be seen, but Kuniskis is skeptical that buyers will go for the bare-bones version at the advertised starting price. He explains that Ram has considered building a Slate-like truck 'a million times' and ultimately decided against it, concluding it wouldn't be competitive once properly equipped. Despite strong early interest in the Slate, which could suggest Kuniskis is wrong, it's unclear how many of the 100,000+ reservations will turn into actual orders, especially since the $50 deposits are refundable. For those who do follow through, it'll be interesting to see how many stick with the base model. Slate Truck 22 Source: Slate Aside from not having a Slate rival, Ram also currently lacks a midsize truck to compete with the Ranger, and a smaller pickup to rival the Maverick. The Slate, at just 174.6 inches long, is much shorter than the nearly 200-inch Maverick. It's worth noting that Ram does have the compact Rampage and the lesser-known 1200 , but neither is sold in the U.S. Kuniskis told Motor1 earlier this year that he wants a 'mid-size truck so bad' for the U.S. as a more affordable option following the demise of the Ram Classic. The Slate does have a counterpart in the world of combustion pickups. Toyota's Hilux Champ is a no-frills workhorse starting at the equivalent of $14,000 in Thailand. But it's not coming to the U.S., where even the cheapest trucks cost more than twice that. Besides the $30,535 Maverick, the base Hyundai Santa Cruz starts at $30,200. All About The Slate: Slate Truck: A Sub-$20,000 Pickup With 150 Miles of Range The Slate Truck Configurator Is Live, Build Yours Here Source: CNBC Share this Story Facebook X LinkedIn Flipboard Reddit WhatsApp E-Mail Got a tip for us? Email: tips@ Join the conversation ( )
