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Remarkable Pickup: Popping the Delivery Question

- Feb. 18, 2020


Popping the Delivery Question

5 Key Insights:

1.   Better pickup means consumer personalization options with predictability and reliability, delivery within 2 days or less. 

2.   We also need to add revenue generation to reduce costs for online delivery without losing sight of 5-star customer satisfaction ratings. 

3.   Empowering consumer convenience is a delivery choice as to when/where to receive their packages. Convenience means increasingly tackling the food retail last mile challenge.

4.   Delivery with Wow! Remarkable customer expectations at the core are points in the consumer brand journey that differentiate one retailer from its competition, one customer from another with personalization. 

5. Mobility is King (or Queen). Mobile e-commerce encourages economic diversity that is flexible, scalable and an integrated fulfilment with inventory and network closer to the consumer.

We need patience and guts on Popping the Delivery Question: compelling reasons to leverage physical assets, spaces and integrated networks to ask better delivery questions.

The front lines, the back lines, in-between data, algorithms and logic, some major retailers and couriers execute logistics extremely well. With the difficulty of getting a product from A to B despite the complexity of weather, human issues, equipment and digital technology – the logistics model needs to perform well, very well. But there’s always improvement needed, increasing customer convenience, meeting expectations, as any global player with a huge network knows.

Retail online (Amazon, Shopify, Alibaba, Walmart, Target) now requires a lot of experimentation because no one knows what will work and finding the answer is imperative.

“Pickup is defined by Personalization. Pickup affects everything and thus physical space. It is arguably the central concept behind consumer choice.” Chris Westra, OMNION

1.   Physical Space – access points are the new consumer network and enabling micro-fulfilment nodes.

The physical infrastructure retailers already own, the diverse asset classes, is arguably the best place to start the re-building process rather than building entirely new infrastructure with automated and technology (eg. automation and micro-fulfilment centres or MFC) dedicated to retail (and e-grocery) only. What’s been referred to as the “ball and chain of existing infrastructure that’s dragging grocers down” [Mercatus], is the challenge of finding the right mix of physical assets and focusing on the typical 100000 sq. ft grocery store between self-shopping, personal-shopping and efficient dark store online operations. It’s clear the conventional grocery store needs to be re-born as something better, new and personalised food experiences and values for the consumer, and a more efficient MFC.

2.   Customer centricity strategy – leadership with people first

An excellent start is customer centricity with leadership that drives this strategy at every step. The B2B and evolving B2C consumer is at the core of and at every level of the logistics flow and to ensure an end-to-end (E2E) logistics management process. The enlarged interpretation of logistics means constructing an all-encompassing, agile fulfilment network for the movement of everything. Everything now defined around the interchange of data from several sources, online, physical, logistics, marketing, digital and more. Even though It’s more than all data sets talking to each other, this is clearly a technical challenge. It’s having people talking to each other, collaborating, communicating; and integration ­– this is large obstacle to change.

3.   Time variables and data – focusing on execution, growth and profitability

Supply chain logistics usually defines time (time variable or ΔT) as king or the most important variable with respect to volume, distance and other defining measurements. This is one model we need to look much closer at to help fast track omnichannel growth and profitability. Depending on a well-defined and systematic design of the fulfilment network, as it depends on its focused execution (think efficient micro-fulfilment centres), it’s a good place to start to generate customer-centric SLAs to ensure predictability, transparency and better logistics values. Data from this process helps to eliminate friction points ensuring a seamless customer experience as well as better, loyal user narratives.

4.   New Supply Chain KPIs – transitioning to physical/spatial sustainable environments

Now let’s consider flipping this model on its head! The time-stable linear model captures specific slices or data-points of the logistics movement but certainly neither the consumer dynamics, nor the entire experience or the new KPI’s required. We’ll need to adopt a different concept to better account for human interaction, including collaboration and communication, with their physical environments, whether collecting a parcel, engaging online, mobility, or experiencing their local retail store. This new concept is defined as follows: space (place/location) is the fundamental structure to develop processes that create a unified experience across every digital and physical channel while aligning the processes that deliver value closer to demand and to the consumer. Physical assets (different classes of assets) are better to align processes that deliver value to the consumer.

I'll leave you with Jean-Marc Francois's insight on true omnichannel experience: “Weaving in as much as possible the physical in store with the online experiences to the point they are seamlessly intertwined will ensure that stores are fully leveraged…This is why I recommend grocers to focus on ‘click & collect’ (or ‘store pickup’ as it is increasingly known in the US) as a way to leverage their store networks and create cross-shopping opportunities and a true omnichannel experience.” 

Thanks for reading. Comments are always welcome and appreciated. Stay tuned for the follow up to this article: “Real-Time X: Why Physical Matters”.

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