Positive impact of new technologies on retail deliveries
Did you know that this 2017, e-commerce in the US is expected to roughly triple the growth of brick-and-mortar retail? That’s an 8-12% increase in e-commerce sales, versus 2.8% for brick-and-mortar, according to the National Retail Federation. Furthermore, e-commerce is expected to have double-digit growth until 2020, and account for more than US$4 trillion in retail sales.
What these figures show is that the buying patterns and needs of customers are changing, which will have a huge impact on shipping. Customers make an online purchase quickly, and expect the item to be delivered very quickly, sometimes the same day or even within a couple of hours, while tracking their order in real-time, at no additional cost. Needless to say, these expectations pose a challenge for retailers.
This reality is one faced by retailers of all sizes, and one that juggernauts such as Amazon and Uber have capitalized on with incentives such as Amazon Prime (delivery in two days or less) and UberRUSH (low-cost, fast delivery).
How can logistics transform a company into a retailer that can compete with Amazon while providing customers with an Uber-like experience?
One word: technology.
Companies are finding that the old-school systems of texting and spreadsheets don’t cut it. They have to transition to more sophisticated technology solutions if they want to deliver goods to customers as efficiently as possible, and still maintain operational costs.
Two sides of the same coin
Logistics plays a key role for both customers and retailers.
For customers, delivery is just as much a part of the customer experience as the product itself. Customers want speed, affordability, flexibility, and security. They desire transparency, and want to speak directly with drivers instead of automated toll-free lines. Customers want the option of having an item delivered according to their schedules, and not pre-selected time windows.
Retailers, on the other hand, need shippers to be partners and provide realistic rates. Small retailers don’t have a connected network of distribution centers to help drive shipping rates down.
Some of the big issues that retailers confront are:
- How effective is a company fleet?
- How do you deal with failed delivery attempts?
- How can you handle issues that come up once you’re in the process of delivering an item?
Innovations in logistics technology help to answer these questions.
Technology improves the shipping experience for retailers and customers
Today, logistics management software provides a simple way to analyze delivery data and streamline the delivery process through algorithm-driven apps.
The new logistics solutions can make the entire delivery experience much more like the delightful experience customers have with Uber and Amazon. While the retailer is tracking the fleet and watching how many deliveries are successfully made, a customer is watching for notifications which show exactly where the delivery truck is, when the delivery is made, and can even receive a photo to show the package sitting by the front door.
Customers can request deliveries on-demand, call drivers through anonymized phone numbers to get trip updates, and provide feedback about the delivery experience. Conversely, retailers can integrate delivery details into intuitive dashboards, and store trip details to pay drivers more accurately.
Logistics technology is a win-win for customers and retailers alike.
Retailers across industries have benefitted from today’s innovative solutions in logistics. Case in point: one non-profit organization delivers leftover food to local pantries and charities. As donations grow, so does the need for a more streamlined delivery method. Through the use of logistics management software, the non-profit improves performance with simpler contact between donors and recipients, customer notifications, and electronic receipts instead of physical paperwork.
Another example is a flower company that experiences steady growth and delivers bouquets through in-house delivery. As the client base increases, the company needs a way to optimize shipping in order to scale. The company partners with a logistics software startup, and through an app, now has access to route optimization. This feature helps to boost productivity and reduce training costs.
In the case of an online platform that connects buyers and sellers of quality home furnishings, the founders relied on an in-house delivery fleet powered by their in-house software, but looked to better options as their customer base and shipping needs grew. They eventually turned to innovative third-party logistics software for tools that included driver tracking and customer notifications. The décor team now maximizes its delivery fleet by cutting delivery time by one-third.
In conclusion, we are in an era where the introduction of new and improved logistics technology can ease the difficulties retailers face during the delivery process, allowing everyone to compete on more equal ground.
Whether you’re in the business of selling flowers, food or furniture, shipping that is in alignment with your business goals is now not only a reality, but a requirement. It will be exciting to see the strides that technology makes in enhancing shipping logistics customers and retailers.
|Logistics solutions in the growing Asian market|
In Asia, shipping is difficult because of the infrastructural challenges around addressing and geocoding systems. For example, as Asia continues to develop economically, new developments continue to spring up, which is great for Asian economies, but not so great for retailers shipping items to these new locales. Shipping poses challenges because a new address that a customer enters doesn’t translate properly into a coordinate. Another issue is connectivity.
These issues have financial repercussions on deliveries. Last-mile delivery is estimated to be around one-half the cost of fulfillment. So, if there are any issues during this part of the fulfilment process, the cost of shipping goes up. Inefficiencies always carry a price tag – saving time saves money. Once a company cracks the ‘last mile delivery’ problem, they can really cut costs significantly. Some companies we know say they are saving 30-40% once they made the shift to a more technologically advanced logistics solution.
Asia is also home to a growing middle class whose lifestyle is pressed for time. E-commerce has subsequently taken off. We see this phenomenon firsthand with companies like Amazon, as well as Alibaba based in China. Consumers want to order online and have items delivered on the same day, with door-to-door tracking and notifications.
Logistics technology can help Asian retailers specifically by providing a platform for delivery addresses to be entered using coordinates, and with intuitive smartphone apps for drivers. Logistics solutions can also support the entry of notes and other details important for drivers to access, along with a running list of Asian character sets.
About the Author: Khaled Naim is the Co-Founder and CEO of Onfleet, a company that makes it easy for businesses to manage and analyze their local delivery operations. Onfleet software manages complex last-mile logistics and gives consumers the ability to track deliveries right to their door. With intuitive iOS and Android apps for drivers, a powerful web dashboard for managers, and seamless communications and real-time tracking for customers, Onfleet has powered millions of deliveries for hundreds of companies around the world in the surging on-demand economy, including Grain, chopp.vn, and dahmakan (food), Beamspace (storage), Meadow (medical cannabis), and UrbanStems (flowers), to name a few. Onfleet is available in English, Spanish, and French and has clients in more than 50 countries. Khaled can be reached via email at email@example.com or connect with him on LinkedIn or Twitter.