21 Same-day Delivery Challenges and Solutions for Retailers

Running a small business is no small feat, especially when it comes to mastering same-day delivery. The challenges can seem endless, with skyrocketing operational costs, distant warehouse locations, and the complexities of managing inventory and ensuring timely deliveries. These pain points can feel like a never-ending uphill battle, making it tough to meet customer expectations and stay competitive.

We’ll point out the common hurdles and explore practical solutions that can help you enhance efficiency, reduce costs, and keep your customers happy.  By addressing these issues head-on, you'll find that implementing or improving your delivery operations is worth the time and effort for the bottom line.  But understanding these challenges is the first step toward overcoming them. Let’s dive into our comprehensive list of the top 21 challenges (in no particular order) faced by many small business retailers and e-commerce companies in the realm of same-day delivery.

1. High Operational Costs

Problem: Implementing and maintaining same-day delivery can be very expensive. This reduces profit margins and makes it harder for businesses to grow.

Rationale: High costs in logistics, staffing, and fuel can eat into profits.

Solution: There are many different items to consider when decreasing costs.  Some we will mention here, and others have their own section below.  The costs may be high, however, if the customer is willing to pay for the convenience, then not offering it causes the customer to go elsewhere and possibly never come back.  So, making local same-day delivery as effective as possible is key and therefore, drivers need to be trained, insured, and efficient. Routes need to be mapped to minimize mileage and reduce fuel costs.  When factoring the wages, mileage reimbursement, benefits, insurance, outsourcing may be the better long-term option.

2. Distant Warehouse Locations

Problem: Warehouses far from customers lead to longer transit times, making same-day delivery difficult.

Rationale: Longer distances mean more time and higher costs to deliver orders.

Solution: If your loyal customers are concentrated in a certain area, using shared warehouse space to make delivery of the fastest moving items is an option.  Also, you could deliver to those longer distances if the cart total is higher than a certain amount.  This higher ticket could help offset the higher delivery costs.

3. Inventory Management Issues

Problem: Poor visibility of stock across warehouses can cause stockouts and unfulfilled orders.

Rationale: Not knowing what’s in stock can lead to missed sales and unhappy customers.

Solution: Having an accurate inventory management system is the important resolution here.  However, for the multi-location businesses, same-day delivery can help pick up those out-of-stock items from another location and deliver directly to the customer, ensuring the sale is complete and not lost.

4. Limited Delivery Radius

Problem: Businesses with a wide customer base may find same-day delivery infeasible.

Rationale: Delivering to far-off places increases time and cost.

Solution: As mentioned above, distance can be a difficult challenge, however each business should consider their industry, and customer base to map out where they live, work, or play.  Your delivery radius should incorporate the most loyal customers and not eliminate potential customers who live further out. This type of data could help determine if a new location is warranted in areas where your customers are ordering from.  Also, partnering with delivery services that have the ability to deliver further can be a crucial benefit for all your deliveries or to supplement your own delivery drivers.

5. Customer Expectation Management

Problem: High customer expectations for same-day delivery are tough to meet, especially with delays whether caused by weather, traffic, or driver delays.

Rationale: Failing to meet expectations leads to dissatisfied customers.

Solution: Keeping customers informed with real-time notification updates and or live tracking helps to manage expectations with accurate delivery estimates.  Being informed is half the battle and usually is sufficient to keep customers “in the know”.  Delays are inevitable in logistics.  They shouldn’t become a recurring issue; therefore, just outsourcing delivery can give the business a scapegoat, keeping a buffer between business and customer.

6. Technology Investment

Problem: Significant investments in technology are required for same-day delivery. Whether doing in-house delivery or outsourcing, delivery technology can get expensive.

Rationale: High upfront costs can be a barrier for small businesses.

Solution: There are options depending on whether you do delivery in-house or outsource. If you do delivery in-house you can use low-cost software to assign orders, track drivers, and provide proof of delivery to customers. If you outsource then you can go with a provider that offers order creation via their platform or via an integration.  So, start out with using their platform and as you grow your same-day delivery volume you can integrate your website POS system to auto create orders.

7. Delivery Partner Reliability

Problem: Reliance on third-party logistics providers can lead to inconsistent service quality.

Rationale: Unreliable partners can damage the business’s reputation.

Solution: Logistics isn’t perfect and there are always tradeoffs.  Handling hiring, scheduling, assigning, monitoring, and the liability yourself vs outsourcing all that for a bit of focus on your own core business is the trade. Just because you have your own drivers doesn’t mean they won’t make mistakes.  When partnering with a delivery provider, cover expectations upfront to see if they can meet or exceed them.

8. Route Optimization

Problem: Planning efficient delivery routes is complex, especially when your stops change daily.  Does your software take into consideration distance and live traffic conditions, and priority of orders?

Rationale: Inefficient routes increase time and fuel consumption.

Solution: Having the right software to help plan the route and ensure the driver stays on that track is important. So, when using in-house drivers route planning is essential to efficiency.  In future posts we will provide a few options for route planning, both free and paid, as well as software to help track orders and the drivers.

9. Staffing Challenges

Problem: Finding and retaining delivery drivers is hard, especially during peak times.  Drivers without orders or orders without drivers is the balance that needs to be constantly adjusted.

Rationale: High turnover and labor shortages disrupt operations.

Solution: This is a very crucial part of keeping delivery in-house.  Local same-day delivery is dependent on the individual driver as well as the collective team of drivers.  Predicting order volume and having an option to outsource is important.  Always have a plan B in place when you have too many orders.

10. Vehicle Maintenance

Problem: Maintaining delivery vehicles is costly and time-consuming.

Rationale: Frequent repairs and maintenance add to operational costs.

Solution: If keeping delivery in-house is important for the company then this cost needs to be absorbed but can be minimized by having consistent maintenance and good drivers who understand the vehicles. Training drivers to listen and feel for possible vehicle issues is essential to minimize major repairs. Also, using the route planning software can help plan the shortest and most efficient routes to minimize the mileage and wear and tear on a vehicle.  

11. Traffic and Congestion

Problem: Heavy traffic impacts delivery times and efficiency.

Rationale: Traffic delays lead to late deliveries, higher fuel costs and higher wages when using an hourly paid driver.

Solution: When considering traffic there are three possible solutions to keep in mind.  First, use routing software that dynamically adjusts routes to minimize traffic delays.  Secondly, finish delivery before rush hour, and finally consider outsourced delivery that doesn’t have time-based dynamic pricing.

12. Weather-Related Delays

Problem: Bad weather disrupts delivery schedules.

Rationale: Delays due to weather lead to unhappy customers.

Solution: Unlike traffic delays, weather can’t be avoided.  However, planning for rain delays and staffing accordingly can be a tactic.  On rainy or snow days have more drivers to take less orders each and concentrate them in certain areas to help minimize distances and in turn delays.

13. Package Security

Problem: Ensuring package safety during transit is challenging.

Rationale: Lost or damaged packages result in financial losses and customer dissatisfaction.

Solution: Actually, local same-day delivery is safer than sending orders via the traditional carriers like, US Postal Service (USPS), UPS, or FedEx.  The traditional carriers have multiple hands that touch the package, are dropped onto conveyor belts, and change trucks and vans often.  All this increases the likelihood of lost or damaged orders. Same-day delivery has one set of hands to track because they pick up from point A and deliver to B.

14. Delivery Attempt Failures

Problem: Failed delivery attempts due to customer unavailability increase costs.

Rationale: Re-attempts and returns are costly and inefficient.

Solution: Delivery providers have multiple options to consider when making deliveries.  For your specific industry and product consider relevant options between returning the package to the pickup location, leaving the order in a safe secure location at the delivery location and providing Proof of Delivery (POS), a picture of the item at the delivery destination.  Also, using delivery software to notify the recipient when a package is on the way for delivery and has been delivered is the best option to minimize failed delivery attempts.  Also, some businesses notify customers as early as the day before to expect their deliveries if they were pre-scheduled.

15. Scaling Challenges

Problem: Small businesses struggle to scale delivery operations as demand grows.

Rationale: Rapid growth can strain resources and infrastructure.

Solution: Last mile delivery is difficult and the most expensive.  As your business grows and you have more and more deliveries as a result, you must utilize technology and partnerships to allow you to focus on your core business.

16. Real-Time Tracking

Problem: Providing accurate, real-time tracking information is technically challenging.

Rationale: Signal quality resulting in Inaccurate tracking frustrates customers and reduces trust.

Solution: Though GPS tracking is great it’s not perfect.  Sometimes GPS tracking is lost or delayed, but coupled with real-time notifications can help decrease the “where’s my package” questions.  Also, having live chat, email, and phone support for delivery customers is a way to help alleviate the customer concerns.

17. Delivery Time Windows

Problem: Meeting specific delivery time windows is difficult.

Rationale: Scheduling conflicts and delays can lead to missed delivery windows.

Solution: This goes hand in hand with route optimization and staffing.  Having the right number of drivers for the number of deliveries for the day is crucial. And even then, making sure to use the routing software to avoid traffic and weather delays is difficult as well. However, keeping customers informed is the key to alleviating their anxiety.

18. Packaging Optimization

Problem: Ensuring proper packaging while minimizing waste and costs is challenging.

Rationale: Poor packaging can lead to damaged goods and higher costs.

Solution: Utilizing local same-day delivery in place of traditional carriers can help save money and time.  When sending items using local same-day delivery carriers, packaging can be minimized as the number of hands touching the item and the transport is safer.  This can help minimize the amount of packaging and the time it takes to prepare the order.

19. Insurance and Liability

Problem: Managing insurance costs and liability issues is challenging.

Rationale: High insurance costs and potential liabilities increase operational risks.

Solution: Insurance costs for packages, delivery vehicles, driver liability, and third parties is a must in today’s litigious society.  Also, most businesses don’t carry Hired Non-Owned Auto Insurance which covers vehicles and drivers of liability when making deliveries.  This insurance itself is costly and most businesses think that the personal coverage will protect them.  This is not the case.  And just like with any insurance you hope you never have to use it, but wish you had it when you needed it. Being sued for an accident, damage to a delivery location, or injury during an accident can becrippling for a business.  Either protect yourself with the right insurance or use a third-party delivery service which includes the protection.

20. Customer Communication

Problem: Maintaining clear communication with customers throughout the delivery process is essential.

Rationale: Poor communication leads to misunderstandings and dissatisfaction.

Solution: Communication is key to a positive customer experience.  Keeping them informed at every step of the way from delivery order creation, to pick up, to delivery via real-time notifications and/or live tracking is most effective.  Also, providing a place for customers to ask questions in the way they feel most comfortable is beneficial as well.  Give them chat, email, and phone options at the minimum.

21. Competitive Pressure

Problem: Competing with larger businesses that have more resources for same-day delivery is tough.

Rationale: Larger competitors can offer faster, cheaper delivery, drawing customers away.

Solution: Local same-day delivery is a must for today’s retailer.  If you don’t offer it, customers will purchase from someone who does.  Almost every large retailer including Amazon offers same-day delivery.  To stay competitive, having the option of same-day delivery is essential. Whether the customer pays extra for it, you split the cost depending on their cart value, or you absorb the full cost, is up to you, your business model, and product markups.  But not having local delivery as an option is not an option in 2024.

Conclusion

In conclusion, mastering same-day delivery for small businesses involves navigating a complex landscape filled with high operational costs, distant warehouses, inventory management issues, and the challenge of meeting customer expectations. Each of these hurdles, from managing traffic and weather-related delays to ensuring package security and optimizing delivery routes, requires strategic planning and investment in the right technology and partnerships.

By implementing effective solutions like shared warehouse spaces, accurate inventory management systems, route optimization software, and reliable third-party delivery partners, businesses can significantly enhance their delivery operations. Real-time tracking, clear customer communication, and scalable logistics solutions also play crucial roles in meeting the ever-increasing demands of today's consumers.

As you consider these solutions, delivAI offers a comprehensive starting point to address many of these challenges. With delivAI's expertise and services, small businesses can improve their delivery efficiency, reduce costs, and ultimately provide a superior customer experience. Whether you're looking to optimize in-house delivery operations or outsource to a trusted partner, delivAI can help you navigate the complexities of same-day delivery and stay competitive in the fast-paced retail environment.

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