Project – Last-Mile Delivery Challenges and Customer Satisfaction in E-Commerce Logistics: A Study of Online Retail Customers in Lagos Metropolis

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

The rapid development of digital technologies has transformed the structure and operation of retailing by enabling consumers to search for products, compare alternatives, place orders and make payments without physically visiting conventional stores. E-commerce has consequently become an important component of contemporary retail and has expanded the relationship between retailers and consumers beyond the physical marketplace. UN Trade and Development (UNCTAD, 2024) observes that digitalisation is transforming consumption and business activities, while the increasing use of smartphones and internet connectivity has contributed substantially to the expansion of online transactions. The growth of e-commerce has also created new expectations concerning convenience, product availability, payment flexibility and delivery speed. However, the successful completion of an online transaction does not occur when a customer clicks the purchase button; it is completed when the ordered product reaches the customer in the expected condition, at the expected location and within the expected period. Consequently, logistics has become an essential component of the e-commerce value proposition. Risberg (2023), through a systematic review of 373 articles on e-commerce logistics, demonstrates that last-mile delivery, fulfilment, consumer delivery choices and reverse logistics constitute important dimensions of the increasingly complex e-commerce logistics environment. Thus, the quality of logistics services has become inseparable from the overall online shopping experience.

Within e-commerce logistics, last-mile delivery represents the final stage through which goods move from a distribution centre, warehouse, fulfilment facility or local delivery point to the final consumer. Although it constitutes only one segment of the wider supply chain, the last mile is particularly important because it occurs at the point where the logistics provider interacts directly with the customer. Lyons and McDonald (2023) explain that the growth of e-commerce has increased demand for urban freight and last-mile deliveries, thereby creating new challenges for carriers, consumers and urban environments. Similarly, Boysen, Fedtke, and Schwerdfeger (2022) identify last-mile logistics as a particularly challenging component of logistics because deliveries must respond to dispersed customer locations, delivery-time expectations, traffic conditions and other operational constraints. The difficulty becomes more pronounced in densely populated cities where road congestion, parking restrictions, unpredictable travel times and high delivery density can make individual deliveries expensive and difficult to coordinate. Last-mile delivery therefore involves more than transportation alone; it encompasses route planning, order consolidation, address verification, communication, tracking, delivery scheduling, customer interaction and successful handover of the product. These characteristics make the last mile one of the most operationally sensitive components of e-commerce logistics.

The significance of last-mile delivery becomes clearer when customer satisfaction is considered. Customer satisfaction in e-commerce is influenced not only by product quality and website usability but also by whether the logistics process fulfils the expectations established at the time of purchase. Vakulenko, Shams, Hellström, and Hjort (2019) found that last-mile delivery experience mediates the relationship between the online retail experience and overall customer satisfaction. Their findings indicate that even when the digital shopping experience is satisfactory, problems arising during the delivery stage can negatively affect customers’ assessment of the entire retail experience. Delivery timeliness, delivery convenience, order accuracy, parcel condition, communication and the ease of receiving an order can therefore influence how customers evaluate online retailers. Similarly, Liu, Giannikas, Petropoulos, and Lim (2020) identify last-mile delivery as an important component of e-commerce service efficiency and consumer behaviour. This implies that an online retailer’s relationship with customers does not end with the confirmation of an order; rather, the delivery experience forms an important part of the customer’s perception of service quality and may influence subsequent purchasing behaviour.

The relationship between last-mile delivery and customer satisfaction is particularly important because customers increasingly expect logistics services to provide speed, reliability, visibility and flexibility. Consumers may expect deliveries to arrive within an advertised time window, receive notifications concerning the status of their orders, communicate with delivery personnel when necessary and have alternative delivery arrangements when they are unavailable at the original address. When these expectations are not met, customers may experience inconvenience, uncertainty and dissatisfaction. Risberg (2023) notes that last-mile consumer steering, delivery choices and fulfilment decisions have become significant components of e-commerce logistics research because consumers increasingly expect seamless shopping experiences across different channels. In addition, the systematic review by Vakulenko et al. (2019) demonstrates that delivery outcomes can influence the customer’s overall assessment of an online retailer. The implications extend beyond one transaction because dissatisfaction with delivery can affect trust, willingness to repurchase and the consumer’s future relationship with the retailer. Consequently, last-mile performance represents both an operational issue for logistics providers and a customer-experience issue for e-commerce businesses.

The Nigerian environment presents additional challenges for last-mile delivery because e-commerce logistics operates within a context characterised by rapidly growing digital commerce, urbanisation, transportation constraints, infrastructure limitations and diverse consumer expectations. Adeniran, Akinsehinwa, and Olorunfemi (2022) found that geographical conditions, technology infrastructure, economic circumstances, government initiatives and sociocultural factors influence the acceptance and patronage of e-commerce logistics operations in Nigeria. Their study further indicates that Nigerian e-commerce businesses frequently combine retailing with logistics functions such as warehousing, packaging and transportation, demonstrating the close relationship between online retail and physical distribution. The United States Commercial Service (2025) similarly reports that Nigeria’s e-commerce and logistics sectors have been expanding, with e-commerce growth increasing the demand for logistics solutions capable of moving goods through both densely populated urban areas and other locations across the country. These developments mean that improvements in digital commerce must be accompanied by improvements in physical distribution systems. Without effective last-mile logistics, the convenience offered by online shopping can be undermined by delays, failed deliveries, high delivery charges and poor communication.

Lagos Metropolis provides a particularly important setting for examining these issues because it is one of Nigeria’s largest and most commercially active urban environments, with substantial concentrations of businesses, consumers, logistics providers and online retail activities. The metropolitan environment also presents transportation and spatial challenges that can affect the movement of delivery vehicles and the ability of logistics operators to reach customers efficiently. A recent Lagos State study by Asaju, Agboga, Morgan, and Oladele (2026) specifically identified traffic congestion, poor road networks, high delivery costs and inefficient addressing systems as major last-mile delivery challenges affecting e-commerce in Lagos State. The study, which surveyed e-commerce customers and logistics providers, reported that such challenges can affect customer retention, profitability and trust in online commerce. Earlier evidence from UNCTAD also identified addressing and delivery infrastructure as important concerns for Nigeria’s e-commerce environment, noting that inadequate address systems can contribute to delivery mistakes and delays. In a metropolis where customers may live in areas with complex street patterns, informal addressing systems, heavy traffic and changing accessibility conditions, accurate location information and effective route planning become essential to successful last-mile operations.

The challenges of last-mile delivery therefore extend beyond transportation time to include the broader quality and reliability of the logistics service received by customers. Recent Nigerian research on urban e-commerce customers has examined timeliness, tracking visibility, address verifiability and service-recovery responsiveness as dimensions of operational logistics service quality, linking them to customer satisfaction and repurchase intention (Aworemi, Gbadegesin, & Remi-Aworemi, 2026). Similarly, research on sustainable e-commerce logistics in emerging markets identifies information quality, delivery quality, order quality, delivery price and customer service as important components of logistics performance, with delivery quality particularly relevant to customer satisfaction (Adeniran, Olorunfemi, & Akanmu, 2024). These findings suggest that customer satisfaction cannot be adequately understood by considering delivery speed alone. A customer may receive an order relatively quickly but still be dissatisfied if the delivery charge is excessive, tracking information is unavailable, the product arrives damaged, the delivery agent communicates poorly, or the customer experiences difficulty confirming the delivery location. Therefore, investigating last-mile delivery challenges in Lagos Metropolis requires attention to multiple dimensions of the delivery experience and their relationship with customer satisfaction. This study is consequently designed to examine how delivery timeliness, delivery cost, address and accessibility problems, communication/tracking and service reliability relate to the satisfaction of online retail customers in Lagos Metropolis.

1.2 Statement of the Problem

The rapid expansion of e-commerce has created greater opportunities for consumers to purchase goods conveniently through online platforms, but the physical delivery of those goods remains a major operational challenge. Unlike conventional retailing, where customers usually undertake the final journey from the shop to their homes, e-commerce transfers much of this responsibility to retailers and logistics providers. This creates a complex last-mile environment in which individual orders must be delivered to geographically dispersed customers within promised timeframes. The problem becomes more pronounced in large urban areas where traffic congestion, road conditions, delivery density and parking restrictions can increase travel time and operational costs. Lyons and McDonald (2023) identify last-mile urban freight as an increasingly important challenge associated with the growth of e-commerce, while Boysen et al. (2022) describe last-mile delivery as a difficult logistics problem because of the need to coordinate numerous customer locations and delivery requirements. In Lagos Metropolis, these general challenges are compounded by specific local conditions, including traffic congestion, road-network limitations, high delivery costs and difficulties associated with locating customers, all of which have been identified in recent Lagos-specific research (Asaju et al., 2026).

A major problem arising from ineffective last-mile delivery is the possibility of customer dissatisfaction. Online customers typically form expectations about when, where and how their orders will be delivered based on information supplied by the retailer or logistics provider. When delivery is delayed, tracking information is inadequate, communication is poor, the package is mishandled or the customer is required to make repeated arrangements to receive the order, the customer’s perception of the entire shopping experience may be affected. Vakulenko et al. (2019) provide empirical evidence that last-mile delivery experience plays a mediating role between the online retail experience and customer satisfaction. In the Nigerian context, Adeniran et al. (2024) similarly report that delivery quality, information quality, order quality, delivery price and customer service are relevant to customer satisfaction in e-commerce logistics. Thus, the problem is not simply that deliveries may be late; rather, weaknesses across several dimensions of last-mile service may undermine the customer’s confidence in the online retailer and influence future purchasing decisions.

Another concern relates to the economic and operational costs associated with last-mile delivery challenges. Delays, failed delivery attempts, inaccurate addresses, traffic-related travel time and inefficient routing can increase fuel consumption, vehicle utilisation, labour costs and the number of resources required to complete an order. These costs may subsequently be transferred to consumers through higher delivery charges or incorporated into the overall pricing structure of online retail businesses. Adeniran et al. (2022) found that economic, geographical and technological conditions influence e-commerce logistics operations in Nigeria, while the United States Commercial Service (2025) identifies the continued expansion of Nigeria’s e-commerce market as increasing demand for more efficient logistics and last-mile solutions. The Lagos-specific study by Asaju et al. (2026) further identifies high delivery costs and infrastructural bottlenecks as important last-mile challenges. Therefore, inefficient last-mile operations may create a dual problem: customers may experience reduced satisfaction while online retailers and logistics providers face higher operating costs and reduced service efficiency.

Although existing studies have examined e-commerce logistics, last-mile delivery and customer satisfaction, there remains a need for further empirical examination of these relationships among online retail customers in Lagos Metropolis. Existing international literature demonstrates that delivery experience can shape customer satisfaction, while Nigerian studies identify infrastructural, technological, geographical and service-quality challenges affecting e-commerce logistics. However, the rapidly changing Lagos e-commerce environment requires continued investigation of how specific last-mile problems—particularly delivery delays, delivery cost, address accessibility, communication and tracking, and service reliability—are experienced by customers and how these challenges relate to their satisfaction. Recent Lagos evidence has begun to address this issue, but further customer-focused research remains useful for understanding the different dimensions of the delivery experience within the metropolis (Asaju et al., 2026; Aworemi et al., 2026). The problem this study therefore addresses is the insufficiently established empirical understanding of how last-mile delivery challenges affect customer satisfaction among online retail customers in Lagos Metropolis.

1.3 Purpose of the Study

The main purpose of this study is to examine last-mile delivery challenges and customer satisfaction in e-commerce logistics among online retail customers in Lagos Metropolis.

Specifically, the study seeks to:

1. examine the major last-mile delivery challenges experienced by online retail customers in Lagos Metropolis;
2. assess the level of customer satisfaction with last-mile delivery services among online retail customers in Lagos Metropolis;
3. examine the relationship between delivery timeliness and customer satisfaction among online retail customers in Lagos Metropolis; and
4. determine the relationship between delivery cost, address accessibility, communication/tracking and service reliability and customer satisfaction among online retail customers in Lagos Metropolis.

1.4 Research Questions

The following research questions will guide the study:

1. What are the major last-mile delivery challenges experienced by online retail customers in Lagos Metropolis?
2. What is the level of customer satisfaction with last-mile delivery services among online retail customers in Lagos Metropolis?
3. What relationship exists between delivery timeliness and customer satisfaction among online retail customers in Lagos Metropolis?
4. What relationship exists between delivery cost, address accessibility, communication/tracking and service reliability and customer satisfaction among online retail customers in Lagos Metropolis?

1.5 Research Hypothesis

The following null hypothesis will be tested at the 0.05 level of significance:

H₀: There is no significant relationship between last-mile delivery challenges and customer satisfaction among online retail customers in Lagos Metropolis.

1.6 Significance of the Study

The study will be significant to online retail businesses because it will provide evidence concerning the specific delivery challenges that influence customers’ perceptions of their online shopping experience. Understanding the relationship between delivery performance and customer satisfaction can assist online retailers in improving delivery arrangements, selecting appropriate logistics partners and establishing realistic delivery promises.

The study will also be useful to logistics and courier companies operating within Lagos Metropolis. Findings from the study may assist logistics providers in identifying areas of service weakness, particularly with respect to delivery timeliness, routing, customer communication, tracking, address verification and service recovery. Such information may contribute to improved operational planning and customer-oriented delivery strategies.

The study will benefit online retail customers by drawing attention to factors that shape their experience after placing an online order. Greater understanding of delivery challenges may encourage retailers and logistics providers to develop more transparent and customer-friendly delivery arrangements, including better communication, tracking systems and flexible delivery options.

The study will also be relevant to transport and logistics policymakers and urban planners. Evidence concerning the relationship between urban transportation conditions and last-mile delivery may contribute to discussions concerning road infrastructure, delivery-vehicle management, addressing systems, loading and parking facilities and urban freight planning.

The study will further benefit researchers and students in transport management, logistics, supply-chain management, marketing, business administration and related disciplines. It will contribute empirical evidence concerning the relationship between last-mile delivery and customer satisfaction within the Nigerian urban e-commerce environment and may provide a basis for future comparative studies involving other Nigerian cities.

Finally, the study will be useful to e-commerce industry stakeholders and investors by demonstrating the importance of logistics as part of the overall online retail value proposition. As e-commerce continues to expand, effective last-mile delivery will remain important for maintaining service quality, customer confidence and sustainable business operations.

1.7 Scope of the Study

The study focuses on Last-Mile Delivery Challenges and Customer Satisfaction in E-Commerce Logistics, using online retail customers in Lagos Metropolis as the study population.

The geographical scope covers selected areas within Lagos Metropolis where online retail activities and home-delivery services are commonly used. The study is concerned with customers who have experience purchasing goods through online retail platforms and receiving those goods through delivery services.

The content scope of the study covers major dimensions of last-mile delivery, including delivery timeliness, delivery cost, address accessibility, communication and tracking, service reliability and customer satisfaction. Customer satisfaction will be considered in terms of customers’ assessment of the delivery experience, expectations, convenience, reliability and willingness to continue using online retail services.

The study does not focus primarily on international shipping, port operations, warehousing or long-distance transportation. These activities may influence e-commerce logistics generally, but the study concentrates on the final stage of delivery from a local fulfilment, distribution or delivery point to the consumer.

1.8 Operational Definition of Terms

Last-Mile Delivery: The final stage of the logistics process through which goods are transported from a warehouse, fulfilment centre, distribution point or local delivery facility to the final customer.

E-Commerce: The buying and selling of goods or services through electronic networks, particularly internet-based platforms, websites, mobile applications and other digital channels.

E-Commerce Logistics: The logistics activities supporting online retail transactions, including order fulfilment, warehousing, packaging, transportation, delivery, tracking and returns.

Last-Mile Delivery Challenges: Problems or constraints encountered during the final delivery of purchased goods to customers, including delays, traffic, high delivery costs, address difficulties, poor communication, inadequate tracking and unsuccessful delivery attempts.

Customer Satisfaction: The degree to which a customer’s experience with an online retail transaction and its delivery meets or exceeds the customer’s expectations.

Delivery Timeliness: The extent to which an order is delivered within the period or time window promised or reasonably expected by the customer.

Delivery Cost: The amount charged to the customer or incurred in connection with transporting an online purchase from the retailer or fulfilment location to the customer.

Address Accessibility: The ease with which a delivery provider can identify, locate and physically access the customer’s delivery destination.

Delivery Tracking: The provision of information that enables customers to monitor the location, status or progress of an order during the delivery process.

Service Reliability: The consistency with which a logistics provider delivers the correct order, to the correct customer, at the expected location and within the agreed or expected delivery conditions.

Online Retail Customer: A person who purchases goods through an internet-based retail platform and receives the purchased goods through a delivery arrangement.

Lagos Metropolis: The highly urbanised commercial area of Lagos State comprising interconnected urban communities where substantial retail, transportation, logistics and e-commerce activities take place.

Project – Last-Mile Delivery Challenges and Customer Satisfaction in E-Commerce Logistics: A Study of Online Retail Customers in Lagos Metropolis