By 2026, 24% of retail purchases are expected to take place online. That’s nearly 1 out of every 4 purchases! As e-commerce continues to grow in popularity, the importance of efficient delivery becomes increasingly significant. This is where route optimization comes in.
Several e-commerce businesses have successfully implemented route optimization in their delivery processes. For example, Amazon uses route optimization algorithms to determine the most efficient routes for delivery vehicles. Walmart uses GPS and real-time tracking technologies to monitor delivery vehicles and adjust delivery routes as needed.
Route Optimization: What is it?
Route optimization involves the use of algorithms and technologies to determine the most efficient routes for delivery vehicles. It need not necessarily be the route with the shortest distance. But it will be the route that saves you the most time and money.
While optimizing a route various factors are considered:
- Start and end locations
- Delivery time window
- Stop priority
- Stop duration
- Vehicle capacity
How does route optimization help in e-commerce deliveries?
Saves last-mile delivery costs
E-commerce businesses need to make last-mile deliveries i.e. deliver the package right to the customer’s doorstep. The cost of making last-mile deliveries can quickly add up if not controlled and can seriously impact the P&L. Route optimization helps in saving costs by keeping the fuel costs in check as the drivers follow the most efficient route. It also reduces vehicle maintenance costs as the vehicles go through lesser wear and tear.
Optimum planning of the route ensures that delivery drivers and vehicles are utilized efficiently. Businesses need not have additional drivers on their payroll or purchase additional vehicles until really required.
Saves planning & delivery time
Manual route planning is extremely complex. It keeps getting even more difficult and time-consuming as the scale of your e-commerce business grows. By choosing to automate route planning and optimization, you will save a lot of time for your planning team. As time is money, this time can be used towards generating more business.
Route optimization also ensures that deliveries are made quickly in the least possible time. As the drivers are able to make deliveries efficiently, they can use the saved time to make more deliveries in a day.
Improves customer satisfaction
One of the biggest factors in the success of e-commerce businesses is the ratings and reviews they receive from their customers. Route optimization software helps in keeping your customers happy by ensuring fast deliveries. Also, the option of adding a delivery time slot while optimizing the route ensures that customers receive their packages at their preferred time, reducing the chances of failed deliveries. A positive customer experience leads to increased customer retention and loyalty.
Helps in managing jump in delivery volume during peak seasons
The holiday season is the most important time of the year for e-commerce businesses. Route optimization helps in scaling up operations during the holiday season when there is a significant increase in the volume of orders. Businesses can plan the routes smoothly with a route planner and ensure that the orders are delivered to the customers on time.
Track the real-time location of the drivers using GPS. It helps in keeping the customers in the loop as customers are demanding more visibility into the progress of their delivery. This transparency enables the fleet managers to take prompt action in case of any unexpected delays and inform the customer about any changes in the ETA.
To stay on top of their game, e-commerce delivery businesses need to make use of all the technologies available at their disposal, route optimization being one of them! It not only helps in saving time and money but also improves customer satisfaction. E-commerce businesses should consider investing in a route optimization software if not using one already!