The last mile, that crucial space that completes the purchasing relationship between vendor and customer, seems to be something that online stores have as an advantage. But, when you examine this more closely, you will discover that brick-and-mortar retailers have a strong advantage in this area, and the term used to describe this should not be the “last mile.”
For a few centuries at least, retail establishments like markets, and later department stores and malls – were the only places people could go to buy the goods they wanted. In time, mail order and expedited delivery helped people buy remotely, and the Internet, of course, expanded this practice globally, giving rise to game-changing virtual businesses like Amazon and Alibaba.
It appears that online establishments have circumvented the liabilities of physical stores entirely by focusing on fulfillment through distribution centers and sophisticated delivery methods. This has left many chains appearing helpless, occupying significant amounts of land in malls and on streets, seemingly unable to compete with the agility of their virtual competitors.
The scenario does not have to be this way. The tables can be turned completely, equipping stores with a one-two punch that addresses online competitors squarely and makes mobile commerce a centerpiece of the in-store business.
The first half of this solution addresses the last-mile problem, retailers start to redefine their stores as leveraged fulfillment centers. This is one of the messages embedded in a recent Insight Report by L2, entitled Retail Innovations: Omnichannel.
Published in February 2016, the L2 report points out that Macy’s currently has a collection of potential distribution points that would eclipse Amazon in the U.S. by a factor of twelve. These are buildings with plenty of space inside and out, with easy access for delivery systems of all types, from traditional couriers like FedEx through to an army of drivers from Lyft, Deliv, and Uber.
From these latter companies, retailers should take a strong lesson, since the parallels are striking.
Uber and its competitors quickly rose to a position of dominance over the taxi industry by replacing the traditional dispatcher-based approach with a dynamic, smartphone-based system in which the locations of driver and customer did not matter much. It was all coordinated by an overarching mobile presence: the cloud, where connections are made and fares are paid.
Retail stores have this same opportunity staring them in the face. Staff members, inventories, and deliveries can now be coordinated through a more versatile mobile commerce operating system. There is no need for a sales associate to pick up a phone and ask a neighboring store if they have an item in stock – or worse, for them to do this within their own store. Nor should delivery be a problem anymore.
The L2 report points out that “Fifty-nine percent of consumers would pay a fee for same-day delivery." Add to this the point that customers do not need to be at their home or office to receive their goods. Handoff is now possible anywhere – a coffee shop, for example, using the same borderless location ability and attitude that powers Uber.
Retailers who are truly determined to lead the way in mobile commerce trends should think about changing the term the “last mile” to something that indicates the permanence of a great relationship between retailers and customers. Maybe they could use something less final, like the “next step.” The term “last mile” says nothing about the ongoing, persistent relationship that excellent, customized service encourages. Nor does it say anything about the willingness of a retailer to make it easy for customers to make returns – a traditional pariah in the retail business.
In this new age of relationship retailing, the so-called last mile is a treasure trove of customer service opportunities. It allows brick-and-mortar retailers to beat the online vendors through a combination of physical availability – distribution centers – and top-tier scalable clienteling through superior in-person and online customer service.
This is a rich opportunity for store operators who worry about declining mall traffic and are contemplating the closure of some of their outlets. It is time to redefine the roles of stores in the fulfillment business. They can be prime catalysts for a more permanent and fruitful relationship with each customer, turning immediacy and availability into advantages, once again.
This article is the second of a multi-part series focusing on retail innovations and omnichannel commerce solutions. To read the L2 Report, click here>>