A survey of the innovations in supply chain logistics gives one a fair idea of the shifting focus in commerce over the past few years – instant gratification and convenience for the customer. It’s like pizza – everyone’s scrambling to get it to you in the fastest way possible. The continuous battle between online and offline businesses has spurred interesting innovations across the landscape. Let’s look at some of these innovations and what they signify as commerce becomes pervasive.
The mammoth in this scenario has always been Amazon. Everyone else’s strategies are designed to be competent against theirs. Over the past few years, they have toyed with everything from drones to Sunday deliveries, to one-hour deliveries, to deliveries straight to your car. The last mile comes at a premium. According to a recent survey, two-thirds of consumers expect drone delivery within the next five years. An interesting question is how many of these people would be comfortable being tracked to their last footstep for the ultimately convenient delivery? Theoretically, that sounds pretty astounding and the epitome of convenience. Anybody who has come back home to that dreaded third and final “Sorry we missed you” (are they really sorry?) FedEx or UPS slip slapped to their door wouldn’t mind giving it a try.
Most big box retailers like Macy’s, Nordstrom, Target, Best Buy, and Home Depot offer “buy online and pick up in store” services. It’s convenient for channel-agnostic consumers who like the option of buying and then picking up at their convenience. That last mile of delivering to the customer’s doorstep that is not a scalable solution for most retailers. Herein lies the importance of having third party companies like Deliv. Crowd-sourced deliveries is an especially notable innovation of the sharing economy. Deliv connects drivers with retailers who can then enable same-day delivery without having to do it themselves.
One-hour delivery is a whole other beast. Amazon started offering it from late last year and the service is now available in a few select cities across the world. It’s a value-added service for sure. But here are some questions to consider – what is the trade-off between same-day delivery and free shipping? What are the products for which customers are willing to pay the premium of same-day delivery versus waiting a little longer with free shipping? It seems like there is a mix of customers that place emphasis on both services.
I think it really depends on the product, particularly how involved a purchase it is – if it’s an everyday essential like groceries where a trip to the store is a chore, or something else. When you are working on a big presentation and your laptop charger fails, one-hour or same-day delivery is the ticket! Or if you come back from a shopping trip and you realize you forgot something essential like toilet paper or dog food. You don’t want to go out again when you have the convenience of having it delivered. But when it comes to say a new television set or golf clubs, would you really mind the trade-off of free shipping and a few days of anticipation?
The underlying philosophy driving these changes is the advent of Pervasive Commerce, where every interaction in the physical world or online is an opportunity to inform, educate, and buy or sell products and services. What consumers want is a seamless and fluid shopping experience. Supply chain innovation is one part of that equation. There are a lot of other pieces that also need to fall into place for the machine to run smoothly.