Direct-to-Consumer (D2C) companies have becoming major players in eCommerce in multiple industries – challenging traditional retailers and straining the capabilities of logistics companies. From 2017 to 2021, the number of US purchasers from D2C brands grew from 56 million to 91 million per year – representing 46 percent of all digital purchasers (eMarketer). Fast growth D2C companies that are vying to become market leaders include:
- Peleton, iFit, and Tonal in fitness.
- Wayfair, Burrow, Floyd, Interior Define, and Fyrn in furniture.
- Made In, Pattern, Yeti, and Stojo in home goods.
- Bonobos, Mac Weldon, Hatch, Harry’s, Warby Parker, Honest, and Fair Harbor in personal goods.
In addition to perfecting their eCommerce platforms and marketing programs and possibly opening retail locations, D2C companies absolutely need to focus on last mile logistics. After all, most of their sales are made online, so perfect deliveries are essential to getting future sales.
Here are four, critical success factors when building our a D2C-focused a world-class logistics operation:
Build and control your own logistics network. Manage it through a last mile logistics platform.
More than likely, you’ll be using multiple logistics providers to gain nationwide reach and lower costs. You need a last mile logistics platform like logistix.ai that can deliver orders to providers, automate scheduling for maximum efficiency, optimize routing, and manage deliveries to a successful conclusion. In short, you need the ability to monitor and manage every delivery on a single screen no matter which provider is making the delivery. The result is that you expertly manage your logistics providers. You can also ensure that your customers are thrilled with the delivery process and are more willing to purchase from your company again.
Optimize scheduling and routing to ensure efficient, on-time deliveries and much lower costs.
Regular old scheduling and routing will get your products to your customers eventually and expensively. Optimizing scheduling and routing using technologies like AI and ML using in logistix.ai align delivery appointments and driving routes for maximum efficiency based on many factors, including traffic, weather, and time of day. The benefits can be huge:
- 95+ percent on-time delivery.
- Lower labor costs due to fewer delays.
- Much lower fuel costs with savings of up to 40 percent.
- Very high customer satisfaction.
Invite your logistics providers to your platform.
You should make your platform available to your logistics providers. This includes providing your platform’s mobile application to technicians and a version of the web portion of the application to their dispatchers and CSRs, so they can monitor and manage your deliveries. This approach maximizes your access to performance data on your real-time logistics operation and enables you to address issues before they become problems with customers.
Establish and track logistics focused KPIs.
Every D2C company creates detailed KPIs for eCommerce marketing sales performance. Logistics services are equally important. Logistics KPIs apply to the time from when your order leaves the warehouse to when it gets to the consumer. Which provider do you use? Which provider performs best? Are the packages delivered on time? To what extent and how often does your carrier respect the promised deadlines? The names of these logistics indicators speak for themselves:
- Cost of deliveries
- Time between orders and deliveries
- Error rate in order picking
- Cost of returns
- Share of delivery costs in your revenues
Good indicators will allow you to retain your customers and boost your acquisition rate, while KPIs in the red indicate that it is time to review your logistics strategy or to consider a change of provider.