Building a last-mile delivery system for superior customer satisfaction

BAUHAUS, a leading home improvement and gardening retailer based in Sweden, operates in both the B2C and B2B sectors. Founded in 1960 in Germany, it has become Europe’s #1 DIY retailer, with 250+ stores spread across the continent.

Business area

B2B, B2C, PIM, Solution development

Platform

Region

Nordics

Industry

Building materials, Consumer goods, Retail, Wholesale

The Challenge

BAUHAUS initially relied entirely on third-party delivery services to transport its building materials to customers. The reliance on multiple external partners made the process expensive and slow.

Service was unreliable as the third-party delivery services didn’t prioritize customer experience, which was unacceptable as customers expect seamless door-to-door delivery services.

Home deliveries

Click & collect orders

Increase in self-managed shipments YoY

Self-managed shipments

2022-2023 statistics

The solution

Last-mile delivery

In response to these challenges, BAUHAUS piloted a small-scale delivery service in Gothenburg. The pilot’s success led to establishing a proprietary fleet in Sweden, enhancing delivery reliability and customer service, in addition to other shipping methods still available to customers.

BAUHAUS partnered with Vaimo to develop an iOS native app with distribution and driver modes. The distribution mode enables efficient load checks, scanning packages, sorting orders, and reporting damage, if needed, as well as optimized logistic plans for each truck. The driver mode offers improved driver experiences with features like Google Maps routing, real-time vehicle tracking on the track & trace page and customer communication via SMS or phone call.

Customers have the ability to choose delivery slots and the option to pay extra for a custom delivery time. Customers can track vehicles in real-time, opt for unattended deliveries, and rate the service post-delivery to allow for improved customer experience continually.

The results

The project has been successful, with BAUHAUS scoring a perfect ten on the Net Promoter Score (NPS), a metric used to gauge customer loyalty and satisfaction. The introduction of the last-mile delivery system has significantly enhanced BAUHAUS’s business operations. It has led to increased customer satisfaction and employee engagement.

In 2022, the BAUHAUS distribution center handled 55% of all orders; this year, BAUHAUS manages 65% of all orders. The total cost per delivery is at an all-time low, with the price per handled delivery lowered for the fourth time since BAUHAUS began making deliveries in 2018.

The Future

BAUHAUS plans to introduce the last-mile delivery system to other markets outside Sweden. Furthermore, the company is exploring opportunities to leverage this solution for additional services, like home delivery for purchases made in physical stores.

Currently, BAUHAUS operates six distribution centers in Sweden and one in Norway, with a fleet of 40 small trucks and 8 large trucks. BAUHAUS plans to expand these numbers exponentially in the coming years.

Image of BAUHAUS employee and a mobile phone showing the BAUHAUS app

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