If you are not aware, the term “the last mile” refers to the final leg of the delivery journey for retail orders that are placed online.

The last mile involves packages being processed at the distribution hub and being transported to their final destinations: the customers’ doorsteps.

If you run an e-commerce business, you should take a leaf out of other online retailers’ books and make the last mile of your order fulfilment process your top priority.

Here is a look at the key reasons why the last mile matters so much.

Customer demand is changing, and you need to be able to compete

Customer demand has changed a lot in recent years. Apart from things like customers wanting companies to increasingly come up with more sustainable and eco-friendly strategies, today’s customers expect their orders to be quick and free.

Providing fast delivery so that products can be delivered on the same day or by the next day is something that many online retailers have struggled with over the years, and many continue to struggle with providing fast delivery today, especially when they are delivering goods to less densely populated areas.

But Amazon has been transforming the speed at which it delivers in order to meet customers’ changing expectations.

Seeing as Amazon is one of the leading online retailers in the world, the company has been able to adapt its last mile order fulfilment process to get products to customers faster.

However, that has meant that online retailers who do not have the infrastructure in place to provide the same service to their customers have fallen behind, while other e-commerce retailers have ramped up their last-mile delivery.

Therefore, if you want to compete with both Amazon and other online retailers, you need to make the last mile fulfilment process your first priority.

If you do not, you could lose existing customers who prefer to buy from retailers that can offer quick and free delivery via a sound last-mile delivery infrastructure. You could also see a drop in the number of new customers you attract.

The last mile accounts for a lot of your total supply chain costs

Due to the recent global supply chain shortage, which may have improved in the post-COVID world, but which is still causing major disruptions and problems to supply chains around the world, online retailers are facing additional challenges with both forward logistics, which refers to the flow of products from the manufacturer to the customer, and reverse logistics, which refers to the goods flowing back from the customer to the manufacturer.

Things like fulfilling existing backlogs of orders on top of processing new orders that come in are proving to be very challenging for many companies that rely on smooth supply chains to get orders to customers on time.

And when the last mile of your order fulfilment process is majorly affected, it will significantly affect the total cost of your supply chain expenses.

Reverse logistics is particularly problematic because online retailers experience a 20 per cent higher return rate of goods, on average, compared to traditional brick-and-mortar retail stores, which can dramatically affect online retailers’ profit margins.

For one thing, with a large number of returns, you will need more warehouse capacity and more workers.

Furthermore, studies show that last mile delivery accounts for 41 per cent, on average, of total supply chain costs. So, you really cannot afford to not make the last mile one of your first priorities.

When you focus on the last mile, your business can become more profitable

Finally, according to Capgemini, 74 per cent of customers will increase their purchase levels by 12 per cent when they are able to go with their preferred retailer that offers fast and efficient last-mile delivery.

Therefore, if you do not pay attention to the last mile, you could lose out on a significant chunk of sales.