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Transforming NPS: The Critical Role of Last Mile Delivery and How AI Delivers the Amazon Effect

Ziv Fass
June 24, 2024

Despite the emergence of new metrics and analytics tools, the Net Promoter Score (NPS) remains a vital gauge of customer loyalty and satisfaction for retailers. It provides a simple yet powerful way to measure how likely customers are to recommend a brand to others, offering valuable insights into their experiences and perceptions. This allows retailers to tailor their strategies to enhance customer satisfaction and ultimately drive business growth. The enduring relevance of NPS underscores its importance as a key performance indicator in the retail sector. However, the factors influencing NPS have changed significantly over recent years.

One of the most profound changes is the impact of last-mile delivery, particularly influenced by the “Amazon Effect.” This phenomenon has set new standards for delivery speed, convenience, and reliability, reshaping customer expectations across the retail landscape.

 

The Impact of the Amazon Effect on Consumer Expectations

For Amazon, last-mile delivery is streamlined and frequent, utilizing a vast network of distribution centers and advanced logistics technologies to ensure fast, often next-day or same-day, delivery of small to medium-sized packages.

In contrast, big and bulky retailers face more complex challenges. Deliveries involve larger, heavier items that require specialized handling, equipment, and coordination. These retailers rely on scheduled deliveries, leading to longer lead times and high levels of coordination with customers, including additional considerations such as in-home setup or installation services. This puts far more pressure on the post-purchase experience, significantly impacting the NPS of furniture or appliance retailers compared to less bulky consumer products.

However, the implementation of artificial intelligence (AI) customized for big and bulky retail can radically improve the ability of home furnishing and appliance retailers to meet the new standards consumers are now demanding. Let’s examine some of the effects of Amazon on customer expectations detailed by the originators of NPS, Bain & Company, and how AI delivers on these.

 

New Consumer Expectation #1: Efficient Processes that Save Time

Customers expect fast delivery. Meeting or exceeding delivery speed expectations can lead to high satisfaction and positive word-of-mouth, boosting NPS. Conversely, delays can lead to dissatisfaction and negative feedback.

AI’s ability to optimize processes and provide real-time updates reduces waiting times, ensuring packages arrive faster and enhancing customer satisfaction. BostonFAM used AI to save time and boost levels of customer satisfaction using auto notifications, chats with a personal virtual customer engagement agent, and day-of-delivery tracking.

 

New Consumer Expectation #2: Reduced Effort and Flexibility

Offering flexible delivery options, like specific delivery windows and weekend delivery, enhances customer convenience, reduces effort and positively impacts NPS. AI ensures a constantly connected delivery experience, aligning with customer lifestyles and new standards.

Before implementing AI, HomeZone was being left reviews by about 10% of customers. By placing the customer at the center of the fulfillment process, it was able to provide a more seamless service to boost levels of customer satisfaction. Now 97% of HomeZone customers leave a rating of between four or five stars.

 

New Consumer Expectation #3: Hassle-Free Delivery

Missing big and bulky delivery windows or having to return goods is a major cause of frustration for home furnishing and appliance retail customers. But these headaches are vastly reduced with the implementation of AI, which ensures a constantly connected post-purchase journey.

Armina Stone’s biggest problem used to be communicating with customers. This meant high rates of failed deliveries and lots of hassles. After implementing AI Armina Stone now maintains a 95% successful delivery rate and a 4.5/5 star customer review average.

 

New Consumer Expectation #4: Simplified and Convenient Experience

A simplified approach throughout the post-purchase journey provides convenience and an improved experience. AI enables retailers to offer a personalized, interactive customer experience with centrally stored customer information.

When DSG consolidated the various solutions it was using to manage the last mile and customer engagement into one complete, unified solution it enabled 700 additional successful delivery attempts to be completed every month compared to previous run rates. The simplicity of having one complete AI-powered solution not only improved capacity utilization, but also boosted customer happiness with 89% positive 4-5 ratings.

 

New Consumer Expectation #5: Instant Access to Support When Needed

Seamless access throughout the purchase journey is highly valued in the “Amazon effect” era. Interactive and individualized communication is now essential for building customer loyalty, improving retention rates, and increasing sales. AI and automation allow retailers to refine their communication strategies, balancing automated chatbots and human interactions.

Before implementing AI, Bob Mills Furniture’s customers could not respond to one-way push notifications and had to phone the retailer’s call center to make contact. Implementing Package.ai had a massive impact on Bob Mills Furniture’s NPS score, which went from between 50 to 60 to being in the 70+ range, along with elite companies like Costco and Apple.

The Transformative Impact of Last-Mile Delivery on NPS

 

Retailers who rely on traditional or fragmented solutions to manage last mile deliveries and customer engagement are unlikely going to be able to compete with the new standards reshaping customer expectations across the retail landscape.

AI and automation technologies have emerged as crucial tools in meeting these expectations by optimizing delivery routes, providing real-time updates, and enhancing customer engagement. By implementing these technologies, retailers can significantly improve their NPS scores, reflecting higher customer satisfaction. As the retail industry continues to evolve, adapting to these changes and leveraging advanced technologies will be essential for maintaining customer loyalty and achieving long-term success.

Discover how Package.ai can boost your NPS and meet the new standards being demanded by today’s consumers — Book a demo today.

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