As Amazon continues to lead the way in terms of increased delivery options, the pressure grows on other retailers to offer similar levels of choice to their customers. With Amazon Prime subscribers now able to get same day delivery in parts of the UK, maybe we need to move past the old chestnut of evening cut-off points and think imaginatively about collection and distribution.
New conversation, same problems
Whilst same day delivery has indeed set a new high bar, the industry still has to deal with fluctuating volume. Businesses have both to improve competitiveness to win new customers and reduce their cost-per-stop whilst meeting rising delivery expectation, not to mention making sure that half-empty wagons aren’t cruising up and down the M6 more often than necessary. Optimising distribution operations is a complex problem, with many trade-offs. One has to take into consideration time windows, differing vehicle capacity, and deciding the best routes can often focus over simplistically on aspects such as minimising the distance travelled.
Raising the game
After a recent visit to a carrier hub, I was somewhat surprised to hear from them that it is often the larger retailers themselves that aren’t making use of ever-increasing carrier capacity. Essentially, the warehouse can’t pick items quickly enough to make use of the capacity on offer.
Increasing warehouse efficiency has always been at the forefront of any ambitious retailer’s thoughts, however the picking and labelling difficulties faced by some retailers aren’t uniform. Next, for example, have blazed a trail for later cut off times – midnight for delivery to store the next day. House of Fraser have also followed suit, with a 10pm cut off.
Some can achieve outstanding levels of efficiency, as Amazon shows. Others cannot.
Whilst differences in efficiency go beyond the same day conversation, the ability to deliver on the same day serves to highlight the difference between the best and the rest.
Creating new strategies
Argos, recently purchased by Sainsbury’s, aim to have thousands of products available for delivery/collection within 4 hours of ordering, thanks to their unique high street distribution model. If you’re a multichannel retailer, to what degree can you start to use stores as distribution hubs to compete with Argos?
Creating loyalty/profitability tiers for customers is one way in which retailers can exceed expectation on delivery choice. If Customer group A spends £10 a week and Customer group B spends £100, should not retailers begin to prioritise delivery options for their high value customers?
Finding the optimum balance between efficiency and quality of service is the eternal quest for any retailer. Sometimes logistical constraints (the obvious example being a late order to a Highland location) mean that customer expectations may not be fulfillable at a reasonable cost.
High-spec delivery management platforms can help retailers solve some of these issues (even if we say so ourselves!), such as suggesting a more expensive carrier who can fulfil a late order for a high-value customer. These benefits make the case for investment in such software.
Photo credit: Sean T Evans via Flickr