Consumers have more options than ever and unashamedly expect ‘added-value’ as standard. The ‘last mile’ of the customer journey does not escape this expectation and has an undeniably increasing influence on a consumer’s entire purchase decision. Trailblazers such as Amazon have heightened expectations and customers are demanding more and discounting those retailers who cannot directly meet their needs.
Getting the customers last mile of ‘payment, delivery and return’ right it is critical to surviving and flourishing, particularly within today’s retail landscape. The agility, vision and experience of a retailer’s senior leadership team are crucial to a successful last mile improvement strategy.
We’ve all noted those that are doing it well – think Argos, where you can order something at 6pm and have it delivered to your door by 10pm. However, for many retailers the limitations of legacy systems & supply-chain inefficiencies often inhibit the most innovative of last mile strategies, ultimately limiting the ability to meet ever-evolving customer demands.
This is most evident with the UK’s more traditional retailers. These firms often have no choice but to allow their legacy operational and technological capabilities to dictate their last mile proposition. It’s this which enables newer and more agile retailers to leverage their advantage in terms of speed-to-market.
In today’s retail landscape, consideration of more entrepreneurial, partnership-led supply-chain options is vital. Is there potential to partner with larger bricks and mortar retailers and take advantage of their distribution network? Or think more laterally and utilise the networks of technology businesses such as Deliveroo and Uber?
Take the Co-Op, which is partnering with e-cargobikes.com to make customer deliveries using human-powered bikes with electric motors around its King’s Road Store within two hours. While only in its early stages, the approach aligns with the company’s brand values and meets the constraints of London’s ultra-low emission zone, all without compromising on delivery times for the customer.
These success stories exist because of agility. In order for more retailers to achieve such success, bold and agile management and board-level teams are required. Yet, this is what seems to be lacking. KPMG and JDA research highlighted that 70% of retailers cite a lack of management commitment as the greatest impediment to investment in supply-chain and legacy systems. This is the time for the hard conversation around leadership and for retailers to take a step forward and reimagine their approach.
As we’ve noted, legacy systems and set-ups are a hindrance. The way to overcome this is the development of agile senior teams that are collaborative and take the best long-term view, rather than for short-term functional ease.
The darling of online fashion; ASOS, has had a challenging few months. It faced a backlash following the introduction of a new, stricter returns policy at a time when it also delisted 280 brands. This was received poorly and was seen to be disrupting customer choice and expectations.
But for large global brands, the pain caused by tough decisions should be seen as part of a long-term strategy to continually innovate. With the right leadership team aligned behind brave strategies, should see them weather most storms.
The real heroes of will be the ones who can collect relevant customer data and create highly collaborative teams that can not only translate it but build broad cross-functional long term strategies driving whole-business change inside and out.
Across other consumer-centric industries, we’ve already seen this shift. The FMCG industry has seen the rise of the Chief Growth Officer role in recent years in response to a more customer-centric and tech-focused world. The role of a Chief Growth Officer or Chief Customer Officer is much broader than a CMO and will lead strategic growth initiatives that are rooted in customer desires, a heavy reliance on data, and an overall cross-functional obsession with digital transformation. This type of step-change in breadth and remit is absolutely something that retailers must consider, to bring balance and drive change.
Successful last mile strategies are one of the cornerstones of future retail. Forward-thinking, agile and collaborative leadership will be the key to ensuring that their organisations can cross the finish line and continue to the next race.