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Delivery in
the Age of
Amazon
Lior Sion
First Edition, March 2019. Published by Bringg Delivery Technologies Ltd.
Copyright © 2019 by Bringg Delivery Technologies Ltd.
All rights reserved www.bringg.com
Chapter 1
Introduction
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If you think delivery is just about transporting a product to the buyer, think again. Delivery is the ful
of the entire customer experience, a journey that begins with brand awareness, continues with the
purchase on- or offline, and culminates in the critical moments when customers wait to receive the
Customer expectations regarding the delivery experience have completely changed over the last fe
years, challenging the way businesses currently operate and relate to their customers.
Across industries and across the world, businesses are discovering new ways to create long-term
customer relationships and leverage the delivery process — new revenue streams; new ways for u
interact with and enjoy the product; new ways to upsell and build relationships; and new data point
better understand and optimize both business operations and customer relationships.
This revolution in the supply chain’s last mile is driven by something consumers always wanted, bu
only recently became possible: convenience shopping. Getting what you want, when you want it w
a privilege available to the wealthy elite, but it is now open to all. This new, democratic level of sho
convenience is driven by companies around the world. Though sometimes referred to as “The Ama
Effect,” it is everywhere around us: from on-demand taxis, to ecommerce, to on-demand streaming
A large part of Amazon’s stunning success is due to the extraordinary experiences it provides its
customers, bringing us to the point where it now accounts for one out of every two dollars US cons
spend online. Now, consumers have become accustomed to a new level of fulfillment: convenient
options, lower shipping costs, on-demand delivery, and full transparency into the delivery process.
This optimal delivery experience is based on transparency, consistency and convenience, which in
are made possible by the ecommerce giant’s customer-first approach and how it uses technology t
service this strategy. Amazon has succeeded where others have failed by adding a crucial technol
layer across all its delivery and fulfillment channels, seamlessly syncing, measuring, optimizing an
tracking activities across all related systems and partners. The result? Consumers are now deman
same optimal experience from each and every brand. For this reason, omnichannel logistics has b
one of the greatest business challenges, although it also remains one of the greatest business
opportunities.
The delivery disruption presents brands with incredible potential to grow their business, extend the
and create deeper relationships with their customers. Better deliveries mean that customers enjoy
positive experiences that make them feel valued, experiences which give them new touchpoints fo
interacting with the brands they love, and which keep them coming back.
Delivery is an essential layer which must be in place within businesses’ operations today if brands
provide this level of experience to their customers. But in order to grow through excellent order fulf
businesses must face the logistical challenge of creating a delivery operation that is streamlined, e
transparent and customer-centric.
Achieving better customer experiences through successful delivery operations also relies on comp
visibility into the status of the order and the inventory at all times, and, of course, the need for perf
delivery execution, whether through the use of in-house fleets, third party fleets or a mix of the two
Companies that align themselves with this new reality will remain relevant to their customers, while
that don’t will quickly become obsolete. Get it right, and you can enjoy unprecedented profit margin
growth within your competitive market. Get it wrong, and you run huge risks when it comes to the v
of your business.
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In short, brands don’t have to be Amazon to build stellar delivery and fulfillment operations that win
business and drive customer loyalty. However, they do have to look deeply and honestly at the way
run their delivery operations today, and then take the next step forward by making the necessary c
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store or provides in-home services. By straddling the old and new worlds — logistics and supply ch
software and agility, offline and online — these solutions can be applicable for businesses no matt
far they need to scale their delivery operations, or how much they grow their revenues.
These technologies are available today, helping companies meet the challenges created by their
customers’ ever-rising delivery expectations while allowing them to make the most of the new busi
opportunities created by the same market changes. With the right strategy, coupled with a smart
technology-powered delivery and fulfillment platform, companies can digitize offline operations and
relationships; optimize back-end operations to achieve greater efficiencies across the entire delive
ecosystem; and offer customers a seamless and transparent experience, all while growing their pr
margins.
Closing note
The purpose of this book is to help brands across multiple industries close the gap between their o
and offline operations, and explain what delivery excellence entails: What the opportunities are, as
what the challenges are and how to overcome them. Each chapter addresses a different industry o
delivery model, and explores real-life case studies that illustrate the core concepts underpinning th
book’s approach.
This book was written as a reference guide, with the intention that each reader take from it what th
relevant. I invite you to turn to the topics that interest you and jump around as you please. I hope y
this book useful in understanding the challenges that stand in between you and logistical excellenc
how to tackle those challenges and reap the rewards of fast, efficient and customer-centric delivery
operations. I also invite you to contact me with any comments or questions you may have after rea
the book.
Lior Sion
Co-Founder & CTO, Bringg
March 2019
Chapter 2
Retail Delivery
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The retail market is undergoing massive disruption due to the Amazon Effect, with the retailer’s va
the customer and the role of the physical retail store both evolving at a rapid pace. Amazon has cle
found a winning strategy; the powerhouse represents about 5% of total US retail and ecommerce,
combined,1 and closed 2018 at an all-time high of 48% of US ecommerce sales and 13.3% of wor
sales.2 Its growth has brought about significant changes to consumer expectations and retailer str
both of which are continuously evolving, and will continue to do so for the next few years.
Facing growing competition from Amazon and pure-play ecommerce marketplaces, many retailers
fighting back with more competitive delivery — more options, faster service, better prices, targeted
personalization, improved returns processes and convenient fulfillment through their stores. The co
thread to all of these changes is that retailers have no choice but to reposition their perceived valu
their customer experience focus, as part of a shift towards omnichannel fulfillment operations.
It’s very important to address omnichannel delivery not as a preventative measure, but rather as a
opportunity to be wherever your customers are, at any time. In fact, retailers have a distinct advan
over online-only brands when it comes to omnichannel delivery, as they can leverage their brick-an
mortar stores to extend the branded experience and create additional opportunities for sales.
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Similarly, shoppers prefer retail for the categories of replenishment, purchases they may return, pu
that complement what they have, risk decisions, assembly required and carrying and handling, wh
only shopping characteristic where Amazon outperforms retail is infrequent but easy purchases.
Having a retail footprint is a unique advantage for retailers due to the ease of returns and the valua
store experience. At the same time, significant changes in customer expectations are making it
increasingly hard for retailers to ignore the ecommerce challenge. To understand why, it is importa
look at the changing customer landscape.
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These statistics regarding customer expectations present a number of challenges. First, retailers m
decide how much they will charge shoppers for rapid delivery. Capgemini reports that there is a 25
between the average cost of delivery for retailers ($10.10) and the amount that shoppers are willin
cover ($8.08), a gap that retailers must somehow close if they want to maintain their profit margins
However, only 1% of shoppers are willing to pay the total cost of last-mile delivery. Clearly, retailer
find ways to measure and maintain their profitability.
Another major challenge is where the retailers deliver from, which has a large impact on the cost s
of their operations. For example, moving pick and pack operations from centralized hubs to decent
fulfillment centers and retail locations presents both operational and logistical hurdles. In addition t
changing how delivery orders are distributed, retailers must retrain staff, implement new processes
technologies, and perhaps engage external delivery providers. Businesses today need to impleme
technology solutions to orchestrate and manage a restructuring of their bases of operations, while
streamlining their delivery flows.
Enabling rapid and cost-effective local services also requires a new approach to delivery itself. To
fast local deliveries, retailers now have the option to utilize flex staff (retail staff that are available t
deliver as needed), regional couriers, 3PLs, crowdsourced delivery providers, or traditional post an
parcel carriers. Retailers operating at scale generally have to utilize a mix of all of these delivery o
in order to provide optimal delivery speeds and prices, as well as full peak season and geographic
coverage. To do this, retailers need technology that can aggregate delivery quotes, automate dispa
operational flows, and track drivers and deliveries, as well as measure and optimize performance,
customer satisfaction and SLAs across all of these services. This is a must-have to ensure that ret
have the insight and agility they need to operate successfully in this new dynamic.
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Finally, with the rise of delivery, many shoppers have grown weary of separately tracking and sche
their multiple deliveries. Sixty-two percent of shoppers prefer to consolidate their deliveries into a s
shipment. This, together with the associated cost savings, is what has driven Amazon to introduce
Amazon Day, a program that consolidates all deliveries from Amazon into a single bulk delivery se
day the customer chooses.
Checkout
To accommodate this omnichannel flow, the retailer’s ecommerce platform must be able to identify
nearest retail location, fulfillment center or warehouse that has the correct inventory in stock.
For maximum benefit to the customer, the ecommerce platform should be able to provide real-time
delivery quotes based on inventory and fleet availability. To do this, information from the inventory
management system, in-house delivery staff or third party fleets must all be collected in a single ce
location to determine delivery availability and pricing (also called delivery quote). With this informa
hand, the ecommerce platform can now offer the shopper the best delivery options at the optimal p
points. Additionally, if the retailer has special membership rates, deals on delivery and other intern
considerations, the ecommerce platform also needs to sync with the CRM platform so that the deli
offers and fees can be adjusted accordingly.
After selecting the delivery type, the customer is presented with the option to select a delivery time
window, sometimes at an additional fee. When checking out, customers can also share specific inv
and delivery instructions. For example, a premium customer ordering a shirt may request an extra
collar stays and instruct the delivery driver to leave the package with the receptionist.
When the order is placed, the same system that is syncing all of the information between systems
parties records the transaction for later analysis, syncs the purchase information back to the CRM
platform, and notifies the pick and pack team, the delivery fleet (or driver, if internal), and the custo
with the pertinent delivery order information.
Depending on the setup, the routing solution may group orders for delivery, increasing efficiency b
delivering multiple orders in a single run. This becomes increasingly difficult when the delivery invo
large items that require add-on services such as installation, as the routing must take into account
on-site, driver capabilities and certifications, and vehicle capacity.
As the driver leaves the pickup point to start the delivery, customers should be notified via SMS or
notification in the retailer’s app. This message should ideally include a link to a branded real-time d
tracker and a more specific delivery time frame.
Like all other stages in the delivery flow, technology is required to measure everything from driver
responsiveness, through new orders, and all the way to on-time performance. Analytical tools are
for ensuring the business leadership and management can understand and optimize the automatio
and partnerships.
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Delivering to lockers is another model that follows much of the same flow as home or office deliver
Retailers can set up or rent locker space in various locations, or work with companies that provide
space in apartment buildings, various businesses or other public or semi-public areas. Automated
notify customers when their package is en route and when it’s ready to be picked up from the locke
Lockers are also a great plan-B option for home deliveries. If a delivery provider is running late, the
send a message to the customer asking if they would prefer that the package be dropped at a lock
where the customer can pick it up at their convenience. Similarly, customers who realize they won
home on time can message service providers and request that the package be dropped off at a loc
location.
These options provide customers with convenience and flexibility that can be a competitive advant
businesses but require a high degree of delivery automation to fully optimize the possibilities provi
this delivery model.
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Another common strategy is to improve delivery flexibility and lower fees by engaging third party a
crowdsourced delivery fleets. While most retailers are still heavily reliant on post and parcel compa
last-mile delivery, regional 3PLs and crowdsourced fleets often offer superior rates for local, rapid
deliveries. Larger retailers may also find that engaging additional delivery services may improve th
leverage in rate negotiations with traditional carriers.
Some retailers have even begun managing their own in-house crowdsourced fleets. For example,
Walmart Spark program allows anyone to deliver for Walmart in select areas. To take this a step fu
most shoppers (55%) would be willing to deliver products to neighbors in their vicinity. A recent stu
21
the journal Sustainability demonstrates the feasibility of crowdsourcing delivery through the gen
public’s everyday commute. (For more on crowdsourced delivery, see chapter 6.)
A major part of the transformation in retail delivery strategies shifts the focus to delivery from retail
locations. Most retailers that offer two-hour deliveries fulfill them from their store fronts (57%) or ba
rooms (12%), while most same-day deliveries are fulfilled from store back rooms (43%) or storefro
(19%). However, less than a third of retailers are currently prepared to ship from stores, and nearly
in-store pickup orders could not be fulfilled through retail. While roughly one in three retailers offer
and-collect or fulfill BOPIS within 24 hours,22 most retailers are still held back by the fact that they
have the necessary real-time information regarding product availability, and even fewer retailers ha
ability to inform a customer about an issue with their order.
Obviously, pricing strategies also vary depending on the type of retailer. For example, discount reta
may find that 30-minute deliveries do not provide sufficient margins to cover the high cost of delive
$25 purchases. However, they may find that $100 purchases may offer sufficient margins to offset
25% delivery cost gap.
It’s clear that utilizing retail locations is becoming a strategic necessity, one which both helps retail
manage delivery costs while also broadening delivery offerings to be more in line with customer
expectations today. With the growing importance of retail stores as last-mile delivery and fulfillmen
retailers must make the strategic investments needed to digitize, manage and optimize their retail-
fulfillment processes.
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customers that leads to lifetime loyalty. Coupled with fast, on-time delivery, this face-to-face touchp
becomes a powerful branding tactic. It also creates incredible opportunities for added value service
installation and tutorials), home showrooming and upsales.
The battle for omnichannel retail and the challenges and opportunities of retail in the era of Amazo
clear. To succeed and grow in this new market, business leaders every part of the company — from
supply chain and IT through operations and marketing — must work together to provide superior c
experiences, build new markets, establish new processes and find new efficiencies.
This transformation requires a new type of technology that enables businesses to measure, gain in
collaborate, automate, and otherwise connect all the dots throughout the complex delivery process
Businesses that perform this transformation to omnichannel delivery have a unique opportunity to
operational efficiency and last-mile performance, while simultaneously perfecting the customer’s e
end delivery experience and even generating new revenue streams.
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delivery speed in an effort to win over shoppers. This is reinforced by the fact that nearly all (87%)
shoppers who receive same-day gift delivery will return to purchase from the same retailer down th
and almost as many (86%) will recommend the retailer to a friend after receiving same-day deliver
However, many retailers fail to capitalize on this remarkable opportunity. The holiday season is the
season of the year, and resources are already stretched to the limit — both at the retailer and at its
delivery partners. Stores are open longer, inventory turns over faster, and everyone from marketing
through operations is working at a breakneck pace to capitalize on the opportunities presented by
special season.
This dynamic produces the perfect storm for creating disappointed shoppers. Over one-third of pea
27
season deliveries in 2018 were late or incomplete. Most shoppers blame retailers when their de
arrive late (80%) or damaged (74%). US holiday season delivery disappointments grew dramatical
28
2017 (36%) to 2018 (56%). Remarkably, the global average is even higher than that.
With holiday deliveries, the potential for profit is as high as consumers’ tolerance for bad deliveries
Retailers must look for innovative new solutions to ensure delivery operations run smoothly across
entire supply chain.
Notes
1. Lunden, Ingrid, “Amazon’s share of the US e-commerce market is now 49%, or 5% of all retail s
TechCrunch, 2018.
2. eMarketer, The Future of Retail 2019. 2019.
3. IDC InfoBrief, Winning Over Shoppers in the Digital Age: A Guide for Retailers and CPG Compa
2018.
4. Capgemini Research Institute, The Last Mile Delivery Challenge. 2018.
5. Dropoff, Consumer Expectations for Holiday Deliveries. 2018
6. Pitney Bowes, 2018 Global Ecommerce Study. 2018.
7. Convey, Last Mile Delivery: What Shoppers Want and How to #SaveRetail. 2018.
8. UPS Pulse of the Online Shopper Study, April, 2018
9. Metapack, 2018 State of eCommerce Delivery. 2018.
10. Gartner L2, Retail Europe: Omnichannel. Insight Report, 2018.
11. Eyefortransport & Quintiq, D3 2019: Dynamic Distribution Disruption. 2019.
12. Accenture, Reroute Your Strategy for Last-Mile Delivery. 2017.
13. Sword, Alex, “Has Amazon’s Free Delivery Week Changed Peak Forever?” eDelivery, 2018.
14. DHL Group, Shortening the Last Mile: Winning Logistics Strategies in the Race to the Urban
Consumer. Euromonitor International, 2018.
15. Zetes, Turning Lost Opportunities Into Profitable Sales During Peak Trading. Retail Report, 20
16. Dropoff, I Want It Now. Same-Day Delivery + The U.S. Consumer. 2018.
17. Sopadjieva, Emma et al. “A Study of 46,000 Shoppers SHows That Omnichannel Retailing Wo
HBR, 2017.
18. Business Insider Intelligence, 2018
19. MultiChannel Merchant, Merchants Looking to Differentiate in the Last Mile, Returns, Outsourc
MCM Special Report, 2018.
20. IMRG Valuing Home Delivery Review. 2018.
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21. Giret, Adriana, et al. “A Crowdsourcing Approach for Sustainable Last Mile Delivery”. Sustaina
vol. 10 no. 12, 2018.
22. Stratton, Felicia, “Click & Collect Not Clicking Yet”. Inbound Logistics, 2018.
23. Narvar, The State of Returns: What Today’s Shoppers Expect. Consumer Report, 2018.
24. Deloitte, 2018 Holiday Survey of Consumers. 2018.
25. International Council of Shopping Centers, Post-Holiday Survey. 2019.
26. Uship, Holiday Shipping Stress Test. 2018.
27. Zetes, The Final Mile Imperative for Flawless Execution and Sustainable Delivery Performance
28. “Biggest E-Commerce Irritant? Post-Purchase Problems”. Retail Touchpoints, 2019.
Chapter 3
Grocery Delivery
The advent of online shopping has disrupted the grocery sector as much as, if not more than, othe
industries. The modern consumer has grown accustomed to the convenience offered by online sho
in other sectors. Largely as a result of the Amazon Effect, consumers now expect an flawless onlin
shopping experience that provides multiple inexpensive delivery options to their location of choice.
These demands are now being directed at grocery retailers, who are facing escalating customer
expectations for both home delivery and pickup in-store options. In fact, these demands are driving
serious disruption to the grocery industry: it’s forecasted that $1 trillion of grocery earnings will shif
online, discount and non-grocery channels, eliminating half of today’s grocers from the playing field
Reinforcing that point, nearly all (82%) of the 2018 sales growth in the FMCG market came from
2
ecommerce.
Amazon’s purchase of Whole Foods raised a red flag for the 80% of retail grocers3 for whom onlin
grocery, curbside delivery and rapid grocery delivery had been secondary concerns until then. The
acquisition alerted grocery executives to the reality that the grocery shift to online is happening now
Amazon’s expansion of the Whole Foods retail footprint to enable two-hour delivery further laid ba
shifting market trends.
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In response, many grocers have accelerated their digitization and supply chain innovation program
Where many were previously heavily reliant on a single picking and delivery provider, these busine
are now diversifying their delivery fulfillment partnerships and capabilities to better withstand chan
market pressures.
Recent studies predict that 20% of all grocery spending will move online in the coming years, with
4
US shoppers forecasted to be purchasing their groceries online by 2024, and online grocery sale
expected to triple in the next three years alone.5 All of this points to the fact that online grocery sh
is quickly growing in popularity, and grocers that expect to successfully compete in the long term m
adopt a multichannel offering.
There a number of considerations grocers need to factor in as they explore how to roll out or scale
their delivery offering. How will delivery and curbside pickup impact in-store sales and operations?
generate digital brand awareness and loyalty? How and when should dark stores or warehouses b
to enable greater efficiencies at reduced costs? How can profitability be maintained given the high
of delivery from retail stores?
While these questions may seem daunting, they also indicate that the shift to online presents excit
opportunities for grocers looking to diversify their offerings, strengthen their brand position and bui
stronger customer relationships.
While the grocery vertical as a whole lags behind other verticals such as restaurants in the shift to
accommodate online shoppers, this delay presents grocers with the opportunity to leverage and ad
latest solutions, along with the knowledge that their counterparts have accumulated as a result of t
experiences. Although grocery delivery presents its own unique challenges — such as the need to
address a wide variety of order sizes containing foods that need to be maintained at different
temperatures — there are fundamental aspects of a successful delivery operation that apply regar
sector.
In order to provide customers with reliable, cost-efficient deliveries while also generating a positive
grocers need to navigate the logistics of delivery, identifying the specific methods and processes th
enable them to reach optimal efficiency. The keys to delivery success for large grocery chains and
regional grocers alike will revolve around creating scale, maintaining flexibility and establishing the
processes.
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(64%), achieve stress-free shopping (60%), shop in one place (48%), quickly complete shopping (4
and purchase high-quality goods (37%). These desires likely reflect two distinct buyer personas, b
shoppers vs. premium, convenience-oriented shoppers.
Recognizing the need to offer grocery deliveries in order secure their market position, major US ch
including Walmart and Kroger are regularly expanding and improving their curbside pickup and de
services. While many in the market are rolling out various delivery services, some grocers have be
investing in and/or testing automated warehouses and self-driving vehicles for last-mile delivery. W
some grocers have already scaled the former option, autonomous vehicles are likely a mix of bran
and PR, with less of a focus on scalability in the near term. All of these initiatives provide grocers w
better solutions for younger, more urban shoppers who are generally the most likely to shop online
their groceries.
Considering the modern shopper’s familiarity and comfort with technologies that enable easy and q
online shopping, the overall move of grocery shopping to online options will happen much faster th
same shift in other industries. Indeed, according to an FMI/Nielsen survey, online grocery sales in
are expected to reach $100 billion by 2025. This means that now is the time for brick-and-mortar g
retailers to figure out how they plan to meet consumer demands for an easy and efficient online gr
shopping experience.
This transformation places a great deal of focus on delivery from retail stores. Retail grocers that o
two-hour deliveries fulfill them mostly from their retail storefronts (57%) or retail backrooms (12%),
same-day deliveries are fulfilled mostly from retail backrooms (43%) or, to a much lesser degree, r
storefronts (19%).
In light of consumer demand for fast delivery, grocers must understand the implications of the oper
and cost levels of same-day deliveries vs. next-day deliveries. Same-day deliveries of grocery orde
generally follow the planned / on-demand hybrid delivery model (see chapter 9), while next-day de
follow the classic planned delivery model (see chapter 8). Next-day deliveries can also be fulfilled
dark stores or specialized warehouses optimized for grocery pick and pack operations, such as
temperature-controlled delivery staging.
For grocers fulfilling same-day orders from their retail stores, it’s important to take into consideratio
fact that retail stores are designed to maximize shoppers’ cart value, and are not set up or staffed
and pack operations. On the other hand, centralized dark stores or warehouses used for pick and
operations are generally designed with picker efficiency in mind. Similarly, automated warehouses
designed for robotic fulfillment efficiency. Therefore, grocers that choose to fulfill online delivery or
from retail storefronts must also factor in the cost and time required to set up, staff and manage th
for pick and stage.
For grocery retailers already offering same-day curbside pickup, expanding to same-day delivery o
from the same location is generally easier. By adding a dispatch and delivery service on top of exis
curbside pickup flows, many grocers have been able to more rapidly scale grocery delivery from re
without needing to reinvent their in-store fulfillment processes.
Grocery delivery should not be limited to large deliveries that replace the week’s shopping trip. Ma
grocers, particularly those in urban areas and those that are open 24 hours, must also factor in cus
demand for smaller, on-demand grocery deliveries. These convenience delivery trips may include j
few items, from personal care items to bread and snacks, or perhaps an emergency purchase of d
These types of orders generally require fast, on-demand delivery. Whereas customers may be fine
waiting three to five days for the delivery of heavy pet food packages that can be difficult for them
themselves (indeed, relative to the growth of online and offline pet consumables combined, ecomm
9
sales of pet consumables grew 10x more in 2017), they expect shorter delivery times for their hou
groceries, and even faster delivery for convenience shopping.
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Complicating the picture even further is the fact that larger grocers may use different solutions for
markets. Picking for larger deliveries in dense, urban areas may be best accomplished using adva
automated warehouses located just outside the city, while convenience grocery delivery in that sam
market may be best picked and delivered by a messenger on a bicycle.
Picking operators are provided with printed lists or, better yet, with digital devices that contain their
lists. Pickers typically work in zones, collecting multiple orders in a single pass. In a well-organized
delivery operation at scale, multiple pickers will likely collect different parts of a single order.
As store layouts often change, it can be difficult to map where each product is in a given store. Gro
picking solutions might (a) provide the option to upload updated inventory maps by aisle; (b) use a
of camera arrays together with object recognition technology to identify the location of each item; o
gain information on product locations throughout the store based on the data collected by pickers.
Grocers must also consider the fact that pickers need to be trained on how to accurately pick items
to make sure they are the correct weight or amount. Also, particularly when it comes to produce, m
fish, they need to know how to pick high-quality, fresh items that are the same or better quality com
to those that customers would pick themselves. Customers are often presented with the ability to a
comments for special requests, such as for bananas that are not yet fully ripe, a well-marbled stea
specialty item that is only available upon request (such as a specialty cut of meat).
Sometimes, the requested item is simply unavailable and substitutions must be made. For exampl
pickers must know what to do when the particular carton of a dozen eggs that the customer reques
out of stock. Do they send a carton of 18 eggs and discount the price, or do they attempt to contac
customer for further instructions? Managing substitutions requires a precisely defined, streamlined
carefully orchestrated process.
Typically, as pickers complete a run, they place their picked items into the delivery staging area, w
usually organized by temperature, with separate temperature-controlled areas for frozen, refrigerat
fresh items. Pickers will typically unload their items into barcoded or RFID-enabled box totes (large
containers), although some grocers use cardboard boxes in place of totes. The delivery staging te
scans each inbound tote, linking delivery orders across temperature zones to ensure that all the or
are properly and completely dispatched.
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them. By tapping into the meal kit trend, grocers can build relationships with shoppers by providing
with the option to have their meal kits delivered with all of their other groceries in one convenient d
As grocers continue to expand prepared foods and catering operations, delivery presents new grow
opportunities for these offerings. For example, some grocers have begun partnering with restauran
ecommerce aggregators or restaurant delivery fleets to offer fresh and affordable on-demand lunch
deliveries.
Curbside Delivery
Alternatively, grocers can offer online shoppers the opportunity to pick up their orders at the curbsi
which offers a number of advantages for both sides. For the shopper, curbside pickup is convenien
offering the speed of online shopping without the delay of the in-store checkout experience, while a
eliminating delivery wait times.
For grocers just making the move to online, offering curbside deliveries can be a great starting poi
Rolling out this type of service can also be less expensive compared to delivery services, and serv
entryway to home delivery down the line. Moreover, a curbside pickup service provides customers
opportunity to get more comfortable with the idea of shopping online, especially in geographies wh
grocery delivery is less mature.
Regardless of the fulfillment path, grocers must be able to track, analyze and optimize their operat
Only then will they be able to successfully manage every aspect of their delivery fulfillment operati
across every internal and external team and touchpoint, in order to maintain their profit margins wh
building customer habit and loyalty.
Grocers are feeling significant pressure to provide fast and inexpensive delivery. As the market for
grocery shopping across geographies matures and the competition becomes ever fiercer, grocers
need to find ways to execute deliveries in the time frames that customers demand, at price points t
reasonable for both them and their customers. Moreover, grocers who expect to compete successf
the new marketplace will need to create a delivery experience that’s as comfortable as an in-store
experience for their customers. This means offering a seamless, simple and effective online orderi
process with reliable, transparent deliveries.
To achieve this, grocers must adopt well-documented processes and embrace the technologies tha
enable them to track and optimize every component of their delivery operation. This is especially
necessary due to the complexity of grocery orders and the large variations in order size. While cur
pickup is a simpler and more straightforward service, grocery delivery is a whole different ball gam
curbside pickup, customers arrive on site and the staging team brings out their order. With delivery
order picking and staging process has to be timed exactly right so the delivery can be coordinated
other orders on a specific route to ensure that all promised delivery windows can be made.
Similarly, grocers must track and adhere to strict food temperature safety standards. While insulate
delivery totes and disposable cold packs will extend this time window, frozen and refrigerated food
only be out of cold storage for very limited durations. Similarly, fragile items like eggs should either
labeled as fragile and handled with care, or placed in a dedicated part of the delivery vehicle (such
passenger area) to prevent damage. Additionally, large grocery orders may require larger than nor
vehicles, or even two vehicles to deliver.
Special instructions or added-value services, such as grocery unpacking or remote access to a cus
home to unload the groceries, will increase time-on-site, as will the delivery of any exceptionally la
11
order. With many grocery deliveries taking ten minutes or longer to deliver, deliveries that requir
time-on-site present added complexities for grocery dispatch and delivery routing.
Another challenge for grocers relates to how they handle mistakes and returns for delivery orders.
the cost of returns relative to the inventory cost, many grocers will simply refund customers for alm
every return request and allow them to keep the delivered grocery items. Similarly, those focusing
customer loyalty will often refund the delivery fee when customers are frustrated by a poor delivery
experience.
The various challenges surrounding grocery delivery highlight the need for grocers to find ways to
optimize delivery operations, delivery times and profit margins. They need technologies that will m
every aspect of the delivery operation transparent, so it can be tracked and optimized. This techno
must be integrated into every system, including order management systems, to ensure the efficien
information and visibility from the moment the order is placed through to customer delivery or picku
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information along with a user-friendly interface is crucial for providing a positive customer experien
Satisfying these demanding shoppers, however, is often incredibly rewarding. Most satisfied delive
customers (74%) have increased their spend by 12% with the retailer, have shared positive deliver
experiences with friends and family (82%), are more willing to try to new offerings (73%), and over
(53%) are willing to purchase a paid membership for a delivery service.
operations, factoring in considerations such as whether it makes the most sense for online orders
picked and packaged in central warehouses, dark stores or their retail locations, as well as who wi
picking and delivering the orders.
Demand for grocery delivery has never been higher. The industry’s shift to online is an exciting one
offers grocers a number of new opportunities — new, creative ways to meet customer demands an
touchpoints where they can engage and retain customers, as well as new revenue streams. Of cou
grocery delivery presents real challenges too, but grocers that have yet to invest in their delivery s
run a very serious risk of falling irreparably behind in the near future. To avoid this and capitalize o
opportunities offered by delivery, the first step grocers need to take is to embrace technology that a
them to measure, optimize and streamline their delivery fulfillment operation from start to finish.
Notes
1. Kuijjspers, Dymfke, et al. “Reviving grocery retail: Six Imperatives”. McKinsey & Company, 2018
2. The Nielsen Company, Total Consumer Report. 2018
3. Redman, Russell, “Survey: Amazon is top threat, disruptor to supermarkets”. Supermarket New
4. FMI and Nielsen, The Digitally Engaged Food Shopper. 2018.
5. Kantar, Retail in Motion – What U.S. retailers can learn from France. 2017.
6. Macquarie Research, Concierge Economy in Retail. 2018.
7. Commonsense Robotics, Crossing the Grocery e-Commerce Rubicon. 2019.
8. Capgemini Research Institute, The Last-Mile Delivery Challenge. 2018.
9. Nielsen, An uptick in clicks and bricks for pet food: An Omnichannel Perspective. 2018.
10. Kantar Worldwide, Winning Omnichannel: Finding Growth in Reinvented Retail. Issue 2, 2018.
11. Semuels, Alana, “Why People Still Don’t Buy Groceries Online”. The Atlantic, 2019.
Chapter 4
Restaurant Delivery
Restaurants today are facing new and growing customer demands for delivery that are changing th
nature of the marketplace. The modern customer expects restaurants to offer delivery, pickup and
experiences that are fast, reliable, convenient and — most of all — enjoyable.
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These demands are impacting the industry to such an extent that delivery is now the strategic imp
for restaurants, and chains must adapt, or risk being left behind. While the industry as a whole has
varying rates of acceptance and success in mastering this new reality, many early adopters are se
positive results, including higher revenues and improvements in customer loyalty.
Delivery is about more than just getting food to people. Customers want an experience that is simi
the one they enjoy when they visit the restaurant. Fast food buyers are looking for simple, fast and
effective deliveries, and high-end aficionados expect high-quality delivery and food experiences, w
everyone in between wants reasonably priced, convenient and smooth deliveries that bring restau
quality experiences right to their doorstep.
A new generation of businesses have thrived by meeting and exceeding these customer expectati
backed by strong technology. These include delivery services such as Postmates or Doordash in t
and Deliveroo in the EU, and technologically advanced restaurant innovators such as Panera Brea
has created an urgent need for every restaurant chain to provide a competitive delivery offering tha
meets customer expectations regarding speed, convenience, freshness and cost.
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The advantages of offering delivery for chain restaurants are clear. Delivery offers the opportunity
customers at their own home or office the same positive experience they enjoy in-house, with the u
convenience — thus extending a brand’s reach and strengthening customer loyalty. However, actu
implementing a new delivery offering can present a number of challenges. Every element — includ
people running the delivery operation and the technologies supporting their flows and processes —
be carefully designed and executed to give the restaurant the best chance to succeed.
Given this, some restaurants are understandably wary of delivery. In this sector specifically, there a
number of challenges that complicate matters.
1. Speed
Time is a pivotal element of restaurant deliveries. Once food is prepared, its quality and freshness
to decline immediately, turning delivery into a race against time as soon as an order is placed. Cus
ordering delivery expect to receive their food very quickly, and there is little room for error if restau
don’t want to sacrifice on the customer experience or on the quality of the food they’re delivering. F
restaurants to provide a delivery experience customers will want to repeat again and again, they m
strategically and logistically equipped to ensure that delivery orders get prepared in a timely mann
handed off to drivers without delay, and quickly arrive at customer doorsteps while still fresh and a
desired temperature.
2. Quality
Restaurants must also consider the ways their delivery offering will match the dine-in experience in
of the brand experience and food quality that customers have come to expect. To achieve this, res
need to make sure they “own” their customers — both their interactions and their data — so they c
provide consistent, high-quality experiences over time.
3. Reliability
Another challenge of implementing deliveries is reliability. Restaurants have to hit their target SLA
time, or risk dissatisfying their customers. Returning customers are a major contributor to restaura
revenue, with 74% of food delivery customers ordering repeatedly from a particular source. If custo
feel that the delivery service is unreliable — because they receive the wrong order, or the food is la
some other reason — then the restaurant can end up losing the future lifetime value of that custom
Restaurants must establish processes and check that they have all the necessary tools in place to
to ensure reliability across every aspect of delivery.
Earning and maintaining customer trust and loyalty in delivery requires consistently satisfying cust
expectations around quality, reliability and speed, every time. Moreover, from the restaurant’s side
maintaining a delivery network and generating a positive ROI requires consistent demand for deliv
services. Because it takes time to build the necessary velocity of orders, delivery can come with a
cost of acquisition, especially in the earlier stages of development.
The growth of delivery in this space presents unique opportunities for restaurants to enjoy new rev
streams and extend the experiences their brand offers beyond their brick-and-mortar locations. Fo
restaurants aiming to ensure their long-term sustainability, now is the time to focus on their deliver
offering — to optimize this crucial component of the business and ensure that it is as streamlined,
and lucrative as possible.
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Catering
The business of catering provides a unique delivery opportunity for chain restaurants. Customers l
brand recognition and the familiarity that comes with their favorite chains. At the same time, restau
appreciate both the added revenue and the ability to plan large orders in advance, without disrupti
day-to-day operations. Catering orders are often prepared in dark kitchens (kitchens located outsid
retail location, often in lower-cost locations) and delivered during non-peak dine-in times. Because
longer lead time, catering allows for a more planned delivery process.
But catering also presents its own challenges. Some catering orders are still prepared in the restau
kitchen, which can disrupt operations and lead to longer prep times. The larger portions in catering
also take longer to prepare. Additional time is a big risk, since it can impact delivery times. In cater
sales are most often built through relationship and trust, and if the catering does not arrive on time
trust may be destroyed.
Maintaining food quality is also more difficult with larger orders, sometimes requiring distinct packa
Catering orders also involve additional items that traditional food delivery does not — such as serv
utensils and a larger number of plates and cutlery — as well as ways to keep food warm on site un
served. On the other hand, catering can also create new revenue streams, such as on-site setup a
staff, and clean-up services.
As with any new delivery offering, a restaurant expanding into offering catering services must crea
standardized processes for managing and executing these operations. Technology for effectively
managing a catering program is key to its success, since it enables restaurants to streamline the w
receive and manage catering orders, easily onboard and manage drivers, and automate the proce
handling customer requests and complaints, among many other benefits.
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experience, but the most durable packaging is quite costly. Restaurants must find cost-effective pa
that meets their needs while maintaining the overall profitability of delivery operations.
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Restaurant delivery journeys often start with an ecommerce transaction (orders made online or via
app). This makes the decision of whether to partner with a food aggregator service one of the mos
important considerations in a restaurant’s approach to deliveries.
Food ordering aggregators can offer a variety of compelling advantages. To start, restaurants witho
ecommerce offering can leverage aggregators as a rapid, scalable online storefront. Even restaura
amazing websites and mobile apps often build compelling partnerships with aggregators, whose w
and mobile apps can help restaurants generate more orders, increasing both revenues and brand
exposure.
Furthermore, aggregators shoulder the cost of customer acquisition, presenting restaurants with h
customers, ready to order. Many aggregators also provide a turnkey end-to-end solution, including
delivery itself, which allows restaurants to quickly and easily start offering both ecommerce and de
at scale. Trusted aggregators bring a wealth of subject matter expertise in ecommerce and in com
on-demand delivery operations. The right partnerships can provide immense value to both restaura
and aggregators.
At the same time, there are some additional considerations that surface when restaurants partner
food aggregator sites for ecommerce and/or delivery. These include:
Revenues and competition
Food aggregator sites typically take a fee of 20%–35% of the order value. They tend to more prom
feature restaurants that (a) offer discounts, (b) buy advertising or (c) have high customer ratings. T
rewards popular restaurants that have exceptional food, and may lead others to further invest, whi
into their margins.
Some restaurants, particularly those with premium brands or those with average to poor customer
are concerned that being listed alongside their competitors commoditizes their food and brand. Mo
some aggregators are now either testing or deploying their own dark kitchens to prepare delivery o
competing directly with existing restaurants.
Restaurants that choose to partner with food aggregators for ecommerce, delivery or both can add
many of these concerns by selecting the partners that fit their long-term vision and strategy, as we
implementing efficient delivery order prep processes so customers enjoy high-quality, fresh food th
the restaurant apart from the competition.
In-house operations
Many restaurants have taken a broad approach, working with multiple food aggregators to increas
exposure and delivery business. However, using multiple food aggregator sites often puts dispatch
in-store staff in “tablet hell,” where they are forced to manage multiple digital tablets, one for each
aggregator. Not only does this present significant operational hurdles for handling incoming orders
creates the added burden of needing to streamline orders across providers so they are all prepare
batched the right way and handed off to the right drivers.
Restaurants can address this challenge with the right technology stack and integrations that ensur
smooth and efficient order preparation and dispatching, regardless of the number of and which foo
aggregator sites they partner with. Technology can provide a centralized hub for order aggregation
puts all aggregator orders into a single platform that’s easier to manage. This integrates into the lo
own POS (point of sale) and KDS (kitchen display system), eliminating tablet hell, and making inco
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and canceled orders easier to handle. Delivery preparation processes are similarly streamlined, wi
service’s orders being grouped to avoid confusion. Perhaps most importantly, this technology layer
enables restaurants to partner with as many providers as needed while maintaining control over th
delivery operations — ensuring that the many varied parts that comprise the delivery flow work tog
smoothly and efficiently.
Menu compatibility
Food aggregators often cause menu confusion, as individual services often use a slightly different
than the restaurant. For example, where a restaurant may list an item as Double Bacon Cheesebu
the food aggregator may list the same item as a Double Cheeseburger with Bacon. These small
differences can make integrating food aggregator orders directly into the restaurant’s ecommerce a
POS systems challenging. To address this issue, restaurants can have a “single source of truth” th
eliminates menu confusion, allowing them to smoothly embrace food aggregator services and also
insights into order trends and performance.
Customer and performance data
When restaurants rely on food aggregator sites, they’re often left in the dark about the customer: w
ordering from them; customer order patterns; customer delivery satisfaction (when the aggregator
delivers); and broader order volume and delivery SLA performance. These datasets and insights a
fundamental components of the restaurant’s delivery operations and customer experience. Restau
need this data in order to improve and grow.
Many restaurant aggregators offer their own reporting to restaurants on order trends as well as de
SLAs (as applicable). Centralizing data across all aggregators can help restaurants understand the
business performance, and the right technology solution can provide reporting across order aggreg
and in-house ecommerce transactions. However, there is generally less customer data available w
working with aggregators as compared to in-house ecommerce.
Customer Relationships
When aggregators perform deliveries on behalf of the restaurant, positive customer experiences a
attributed to the aggregator, making it challenging for the restaurant to use these experiences to b
brand loyalty. Restaurants also generally miss out on branding and promotional opportunities when
not the ones executing their deliveries.
However, savvy operators will find that creative packaging, technology solutions and strong partne
help close some of this gap. For example, adding branded “extras” such as promotional items or s
of new dishes into delivery orders can build both the customer relationship and the brand. Similarly
restaurants can negotiate with their delivery partners on the branding of the customer delivery trac
well as the ability to send a customer survey following a delivery.
ensure that meals are prepared quickly and reach customers while they’re still fresh and hot. For t
purpose, restaurants need to consider how they will streamline delivery order preparation, and whi
technologies they’ll use to achieve maximum efficiency.
At the same time, restaurants also need to design and integrate their new dispatch capabilities. Th
need to hire and train dispatchers who will decide, among other things, how to prioritize orders and
fleet or driver will handle which delivery. Dispatchers will also need to address customer complaint
other delivery issues that arise. Will the restaurant have a dispatcher handling delivery operations
location, or will it use a centralized approach to dispatch? Restaurants must determine whether the
embrace technologies that can automate the core dispatching functionality, as these technologies
optimize better and faster, freeing up dispatchers to handle delivery exceptions.
Technology
Recent years have seen the emergence of technologies that make it possible for restaurants to mo
easily and quickly launch a new delivery offering or optimize an existing one. These technologies c
around optimizing and automating delivery operations while providing real-time visibility into everyt
associated with deliveries — from backend operations and management insights all the way throug
driver flows and the customer experience — ensuring that all associated processes are streamline
efficient so as to deliver the necessary ROI to the business.
Today, restaurants aiming to achieve true excellence in their delivery operations must embrace tec
solutions that focus specifically on delivery and fulfillment. Fortunately, many of these technologies
embraced without requiring restaurants to make significant changes to the processes or technolog
already have in place.
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There are a number of key considerations restaurants must factor in when they explore the techno
that will support their delivery operation. These include operational efficiency — including the exte
which technology will enable the restaurant to streamline and automate its delivery processes whil
enjoying flexibility and visibility surrounding delivery operations — and big data, ensuring that, thro
technology, the restaurant will be able to collect and utilize the operational insights that drive const
improvements to its delivery operation, and the strategic, executive macro insights that will inform
and growth.
Notes
1. Klein, Danny, “Panera’s Delivery Program Goes National”. QSR Magazine, 2018.
2. Morgan Stanley, “Alexa, What’s for Dinner Tonight?” Morgan Stanley, 2017.
3. Olo, Want to Scale Delivery? Implement These Best Practices. 2018.
4. Wirth, Sara Rush, “The Stats Are In: Consumers are Upping Restaurant Delivery”. Restaurant
Business, 2019.
5. Alix Partners, “From the Challenges of Technology, Delivery and Labor Costs, to Sparse Growth
Possibilities, the Restaurant Industry Faces a Defining Moment”. Alix Partners, 2017.
Chapter 5
In the era of Amazon, customers have learned to expect unprecedented levels of delivery speed a
convenience at remarkably low prices. These expectations place incredible pressure on every com
leadership team, with business and supply chain executives feeling the squeeze. They have by no
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to recognize that their delivery and logistics capabilities need to be upgraded if they want to match
exceed modern customer expectations while maintaining profit margins. This becomes all the more
challenging when managing expensive white glove deliveries, such as furniture, large appliances,
construction materials, and other big and bulky items.
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As big and bulky deliveries in particular are incredibly expensive, harder to optimize (requiring acc
time-on-site) and require more from the customer, failed deliveries are both common and costly. Fa
deliveries are very expensive for businesses, representing an average of nearly $70 in added cost
delivery to the retailer. Failed deliveries also add an average of 4.6 days to the delivery process.
Businesses cannot simply respond by raising their delivery fees, as nearly half of customers say th
delivery fees for oversized items have caused them to shop elsewhere.
This is a frustrating experience for businesses, their delivery partners and their customers. Custom
often miss work in order to wait for their delivery (21%), they waste a great deal of time trying to tra
down their deliveries (11%), and they end up frustrated and arguing with customer service represe
(11%). Those who hesitate to purchase big and bulky items online (28%) point to the delivery head
often entails.
Adding to the frustration, when ordering oversized deliveries, more than one in five customers hav
received damaged goods, while more than one in seven customers have ordered oversized delive
never arrived. Considering all the risks involved, it’s not surprising that 40% of the top 100 retail sit
active home delivery programs only offer curbside delivery, whereas only 5% deliver into the custo
4
house.
Facing seemingly impossible demands for faster, more convenient and professional deliveries at
reasonable costs, business executives and supply chain leaders are turning to technology to impro
performance, agility, margins and customer experience. The right technology synchronizes the del
flows, integrates every component of the business’s delivery operation, and ensures streamlined a
efficient processes that enable the business to meet customer expectations while generating a pos
ROI.
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unavailable. Customers expect support staff to have real-time visibility into their order progress an
delivery timing and that they are able to take action, such as to reschedule a delivery or schedule a
up service call, as needed.
In the hours before a scheduled delivery, customers appreciate being provided with a real-time tra
that provides both a live map of their delivery and a more precise delivery time window. These trac
are generally shared through text messages or mobile app push notifications, and should always b
optimized for mobile devices.
Trackers typically show the driver’s first name and photo and also allow customers to share their e
location with drivers. They also generally offer customers the ability to communicate with drivers d
via text message or phone call, using masked phone numbers to protect both the driver’s and the
recipient’s privacy. These features are particularly helpful for customers in remote locations or bus
on construction sites where traditional street addresses may not offer sufficient accuracy.
As the driver approaches, customers should be reminded that their delivery is on the way, often in
form of a text message or push notification. These reminders help customers make final preparatio
delivery.
Throughout the delivery experience, customers expect staff to remain professional. Delivery perso
should be professional, presentable, fluent in the local language and capable of helping with relate
such as scheduling a follow-up service appointment. They should also be able to document and re
any damaged merchandise or accidental damage they caused during the delivery.
Finally, following a completed delivery, customers appreciate being asked for feedback in the form
follow-up survey or phone call, especially when businesses later further follow up with them on the
feedback they gave. This feedback provides valuable insight for businesses as well.
Making it simple for customers to provide feedback via in-app messaging will increase feedback vo
and thus the opportunities for businesses to gather customer insight and use it to improve process
the delivery experience.
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Once orders are placed, they must be staged and dispatched for delivery. Delivery staging teams a
warehouse or retail location must know which deliveries need to be prepared and when they are d
pickup. However, manually synchronizing pickup times and delivery across multiple fleets at scale
nearly impossible and terribly inefficient. Instead, technology solutions can provide automation to
coordinate an efficient process across both the internal staging teams and the various delivery flee
ensuring that retail or warehouse staff prepare the correct order for each driver with a clear, tracke
of custody.
Often, the closest inventory for a big and bulky delivery is at a retail location. While delivery from th
location’s warehouse follows a delivery flow very similar to delivery from a resupply warehouse, de
oversized goods from the retail floor, such as floor models or delivery from warehouse clubs, requi
further collaboration with on-site pickers.
Typically, the ecommerce or delivery technology provider will ping the local retail team’s task mana
platform or mobile tablet. Pickers or retail associates follow the step-by-step instructions to collect
hand over the merchandise for delivery staging. In the case of warehouse clubs, a single order ma
divided across multiple pickers, with each assigned to a specific store section. In this case, pickers
scan merchandise as they progress through the store, grouping items by recipient. The delivery st
team will then assemble and stage the deliveries for pickup. For fresh, refrigerated or frozen items
staging may be segmented by temperature, with orders assembled for hand-off to delivery fleets o
minutes before the drivers arrive. Delivery staging teams generally utilize barcodes and printed de
labels to ensure that all orders are correctly staged and handed over for delivery. For more on stag
fresh and frozen last-mile deliveries, see chapter 2.
These technology solutions should also ensure that the appropriate delivery instructions and supp
documentation are included with each delivery. They can also manage delivery flows and documen
by syncing directly with the delivery fleet’s mobile app for drivers, or provide a mobile app for in-ho
drivers. As a major added benefit, this sync across platforms also provides dispatchers, support an
customers with real-time driver tracking and SLA performance reporting, and can even synchroniz
of delivery and photo uploads.
the need for delivery sequencing. While some businesses simply use their delivery staff as service
others prefer to schedule two distinct appointments: one for the delivery and another for the white
service. Though there is theoretically no reason that these two delivery appointments cannot be
scheduled back to back, any delays in the first delivery will also delay the second. Automated sequ
can prevent such delays and schedule the most efficient delivery sequences for big and bulky deliv
setup and installation.
Nearly all big and bulky deliveries utilize either a planned or a hybrid planned / on-demand delivery
(for more on these delivery models, please see chapters 8 and 9). Given the complexities of big an
deliveries, businesses gain substantial efficiencies from automated routing solutions.
Many businesses use fully automated routing and dispatch tools, allowing dispatchers to focus on
exception handling. Others prefer to use automated routes as a starting point, and then task exper
dispatchers with validating and tweaking delivery routes as needed. This added human touch help
businesses make the best use of the dispatcher or driver’s personal experience. A strong routing p
will allow dispatchers to run near real-time simulations, gauging the impact of each manual change
rest of the delivery flow so that the dispatchers can determine the best possible options.
Given the substantial expense of big and bulky deliveries, dispatch and support require real-time a
to driver location and delivery progress. Businesses that have already invested heavily in telematic
installation can integrate these legacy investments into their dispatch operations. Businesses that
looking to streamline and modernize, or businesses that do not yet have a telematics solution, typi
turn to driver apps running on mobile phones or tablets.
There are many benefits to driver mobile apps for big and bulky deliveries:
Upselling
Many businesses allow and even incentivize drivers to upsell additional products and services whi
site. From warranties to installation services, service packages and ancillary hardware (such as HD
cables for a TV), drivers can easily upsell and fulfill these orders via their mobile apps.
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drivers to mark the task as complete until they have satisfied all the necessary requirements. All th
delivery details then need to be synchronized with the business’s backend systems to update cust
records, activate the warranty and store proof of delivery.
Customer communications
For example, if a driver cannot locate the customer’s address, the driver can message or call the
customer right from the mobile app. The driver’s and customer’s phone numbers will be masked,
protecting everyone’s private contact information. If the customer chooses to share their geolocatio
through the delivery tracker, this information will be automatically sent to both the dispatcher’s web
and the driver’s mobile app.
Driver empowerment
Some businesses allow drivers to dynamically update their delivery routes and schedules based o
personal experience, as long as they can still meet promised delivery times. Naturally, dispatchers
able to see these changes and contact the driver or override them as needed.
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dispatchers and support to track and manage driver progress across internal and outsourced prov
and providing management with the ability to track customer satisfaction and SLAs across all deliv
regardless of how they were fulfilled.
Notes
1. eMarketer, June 15 2018, Consumers Are Warming Up to Purchasing Furniture Online
2. Convey, Last Mile Delivery: What Shoppers Want and How to #SaveRetail
3. Realities in Oversized eCommerce Delivery in the Amazon Era: uShip’s 2018 Consumer Insight
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Chapter 6
Service Delivery
Enterprise businesses today, more than ever before, are rethinking the value they deliver to their
customers. Increasingly this means making house calls, providing a flawless experience of both th
traditional and newly expanded services at the customer’s convenience — exactly when, where an
they want. From retailers expanding revenues by offering home installation to consumer brands de
in-home training and setup services, it seems like every business is quickly becoming a service bu
as all seek new channels of growth.
High Urgency:
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Doctor/medical
Home repair (HVAC, plumbing)
Roadside assistance
Medium Urgency:
Internet/cable service / phone connectivity
Hospice, in-home care
Appliance delivery and installation
Appliance repair (dishwasher, washing machine)
Low Urgency:
Home tutorials
Merchandising
Furniture setup
Carpet installation
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satisfactorily complete their service tasks, answer customer questions, clean up after themselves,
complete their on-site services on time. Nobody likes a rude service provider or enjoys hearing tha
repair person is missing a critical piece of equipment and must come back another time.
In order to address these issues, businesses must develop the ability to track service provider effic
and customer satisfaction. For example, management should be able to track how often service pr
close service calls in a single visit and how often they arrive and leave on time, as well as their cus
ratings as determined by a post-service customer satisfaction survey (either digital or via phone).
A well-tuned automated routing and dispatch solution can take into account dozens of consideratio
automatically generating suggested routes. Common considerations include service tasks required
capacity, service provider languages and certifications, the number of service providers required p
vehicle capacity and capabilities (e.g., towing capacity), inventory required, inventory availability (o
vehicle or along the driver’s planned route), driver ratings, transit time between service tasks, brea
parking and loading/unloading time, and time-on-site.
More so than any other segment, service deliveries often require substantial time-on-site. Projectin
on-site is critical for dispatchers; however, time-on-site typically varies substantially (over 100% va
across different service providers and white glove tasks. For example, while some service technici
may typically require only 25 minutes to install a particular model of washing machine, others may
generally take 35 minutes. Due to the many variables involved, it is notoriously difficult to project ti
site. The ideal solution is to use a system that dynamically learns from real-world service or delive
provider behavior and adapts dispatch and routing accordingly.
Another important component of dispatch and routing is capacity planning. Often, customers expec
able to book service providers on their own, up to a week before the actual service call. Similarly,
customers expect that retail and support staff can book their service appointments for them. This r
a centralized appointment booking engine that can calculate service provider availability in real tim
Many businesses will also offer customers the option to pay a premium for faster service or a prem
time slot, all of which must also be managed through this centralized platform. To further complicat
matters, some service businesses will engage third party providers to increase their service capac
they need to manage third party dispatch and routing as well.
All of this must be coordinated and automated in real time, following predefined business logic, in o
provide the optimal solution for both the business and the customer. This is why businesses are
increasingly looking to either automate or semi-automate the dispatch and routing systems for thei
services.
Once routes are finalized, instructions and documentation must be sent to all service and delivery
While many businesses still rely on pen, paper, spreadsheets and radios, modern dispatchers are
digital dispatch and driver management mobile apps to streamline and measure the entire process
Digital and mobile app-based systems also provide faster onboarding and fully automated process
management. For example, businesses can use mobile apps to track service provider and vehicle
locations, driving speed, and progress in real time. This information is not only invaluable for
benchmarking service providers and improving service flows, but can also provide customers with
time maps that show the progress of the service or delivery provider. Mobile apps can also prompt
providers to follow predefined service flows, including uploading photos at key junctures, scanning
barcodes, collecting customer signatures, uploading warranty information, viewing and collecting
customer notes, and more.
By standardizing service and delivery provider flows, businesses can increase efficiency while quic
easily onboarding new service providers, both internal and external.
Whenever businesses outsource to third party service providers, they must ensure that there are n
compromises in (a) the customer experience, (b) service quality and (c) data visibility. Often, a serv
business will provide its outsourced technicians with the same mobile apps that its own in-house s
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technicians and delivery staff use. This helps ensure that they all provide the same levels of servic
the same capabilities, follow the same standardized service flows and maintain similar levels of cu
satisfaction.
While this helps businesses maintain their standards, service providers also greatly appreciate how
mobile apps automate and streamline their workflows. For example, traditional dispatch solutions o
require that they “radio back to base” to report on their progress or receive new assignments. With
apps, they no longer need to check in with dispatch or manually manage mountains of paperwork.
While some businesses require that the service providers follow strictly enforced flows, many busin
have substantially increased employee satisfaction by collecting feedback via their mobile apps an
providing more flexibility where it matters most to customers. These small tweaks not only empowe
service providers to do their jobs the way they know best, but also help to improve their productivit
Customer Experience
Strong customer experiences drive strong businesses, and the customer experience starts with the
promises that the business makes in its marketing and sales process. For example, when booking
service call, customers expect to be able to select a reasonable window of time. No one wants to w
home for an entire day, only to have the service provider show up late (or not at all). Also, custome
expect to be able to book service calls on their own through the provider’s mobile app or website,
as through phone support, service providers and even retail staff.
Additionally, customers expect to be able to reschedule service calls, and many assume they will r
a reminder about the scheduled service. This feature is also helpful for the business, as it increase
likelihood that the customer will be present for their service appointment. On the day of the service
delivery, customers expect to be offered shorter, more accurate service delivery windows. Live pro
updates also help customers plan their day and prepare for service deliveries as needed.
Customers expect to be able to track the service provider’s progress as they wait for them to arrive
expect them to arrive on time and, if a provider is running late, they want to be notified in advance
Businesses can provide customers with tools that deliver real-time updates on the service provider
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location and estimated arrival time. If a secondary service call is required, automated rescheduling
a communications app can enable the customer to schedule the service with a single click.
Customers also expect service providers to be polite and presentable and to clean up after themse
Failure and frustration with a single service call can undermine all of the business’s efforts to gain
customer’s trust and build the relationship. Given these expectations, it is essential that businesse
not only their service technician’s on-time performance, but also their customer satisfaction ratings
immediately after the service experience and in the following weeks.
By collecting customer satisfaction ratings and feedback at every stage across the customer journ
by asking customers what can be done to improve, service leaders can improve their performance
customer relationships and loyalty, and bottom-line performance.
In the era of Amazon, customers expect more from their service providers, making the providers e
more from their dispatch and operations technologies. Given the growing demand for complex, con
and affordable services, service businesses have no choice but to streamline and grow their offerin
through real-time information that ensures full alignment across the entire service and delivery eco
Notes
1. Harris Interactive & Glympse, The State of Last Mile Service & Delivery, 2018
2. S&C, March 2017, The Real Cost of a Truck Roll
3. KPMG Global Insights Pulse Survey, February 2018
Chapter 7
Crowdsourced Deliver
The business of delivery is rife with interesting, albeit complex, opportunities and challenges. Busi
in different industries and verticals must factor in a variety of unique considerations surrounding th
delivery operation and how to best execute it. In the grocery sector, these challenges include the ta
the business will use to keep food fresh while it’s in transit. For retailers, it’s important to consider
areas where delivering from a brick-and-mortar location would be faster and more lucrative than de
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from the warehouse. For businesses in any vertical that are doing delivery, two questions in particu
of utmost importance: Who will do the driving, and how will the business ensure it has an appropria
capacity of drivers at all times?
Crowdsourcing can offer businesses across sectors an effective and efficient solution to many of th
delivery challenges. Many businesses turn to crowdsourcing providers because of the flexibility of
approach, one that can easily be scaled up or down as needed. Crowdsourcing can also be used t
augment an in-house fleet, adding excess capacity to meet peak delivery demands. In some cases
there are also physical, space-related concerns, such as ensuring that the retail parking lot has en
room for a fleet of delivery vehicles, crowdsourcing can offer a solution.
Crowdsourced delivery also offers businesses a unique solution to the ever-present balancing act
between ensuring customer satisfaction, handling the peak delivery rush and managing expenses.
businesses explore whether crowdsourcing is the right option for them, they must ensure that any
crowdsourcing model they adopt allows them to manage and coordinate the entire delivery operati
across every provider or platform without forfeiting control, and also keep control over the custome
relationship.
With the right technology stack in place, businesses can effectively and dynamically manage every
process — and person — associated with their delivery operation across both in-house staff and
crowdsourced delivery contractors.
An Overview of Crowdsourcing
A wide variety of businesses, including restaurants, retailers and grocers, crowdsource their delive
drivers. By having access to an on-demand, scalable pool of delivery drivers, they can easily and q
launch a delivery offering and meet capacity when needed — such as when delivery volumes are m
it hard to meet SLAs during peak delivery hours or peak delivery seasons.
The most common model for crowdsourcing is working with delivery providers who manage a fleet
crowdsourced drivers and offer crowdsourced delivery as a service. While some providers offer wh
labeled delivery as a service (deliveries appear to come from the merchant), many notable provide
as UberEats, have established strong, customer-facing brands of their own.
Many providers with strong customer-facing brands also offer ecommerce marketplaces that can h
expose a wider audience to the business’s products. On the flip side, marketplaces generally place
business and its products alongside its competitors, thereby directly commoditizing its offering.
This creates the need for businesses to find ways to differentiate themselves from the competition
example, in order to increase their order volume, restaurants can purchase sponsored listings on
UberEats’ ecommerce platform, offer discounts, and more. While many businesses invest in marke
their customers “where they already are,” other businesses have remained skeptical, and do not lis
products for sale in any ecommerce marketplaces.
Crowdsourced delivery providers typically charge a fee for both delivery and ecommerce (when av
When they operate as both ecommerce marketplace and delivery fleet, crowdsourced delivery pro
fees can be as much as 35% of the total order value. However, these fees are much lower if the bu
uses only the delivery or ecommerce aspect.
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drivers, businesses typically pay drivers per delivery. They rarely pay for the drivers’ down time be
deliveries, or for the costs of the first leg of drivers’ journeys (the time or miles they cover picking u
delivery order). This often introduces substantial savings.
Many businesses, particularly in the restaurant and grocery verticals, turn to dedicated crowdsourc
delivery providers to ensure a properly executed delivery operation while they gradually transition
own, in-house delivery service. This allows them to begin offering delivery by outsourcing to these
providers while concurrently transitioning to a stable, controlled, lower-cost internal fleet. There are
many businesses using crowdsourced delivery as a cost-effective way to provide delivery in geogr
where maintaining in-house driving staff isn’t yet viable.
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As these tactics further eat into profit margins, each business must do its own financial analysis an
its strategies accordingly. Even with the added expenses, many businesses have found that the sh
volume of orders from aggregators outweighs these concerns.
Finally, and perhaps most importantly, businesses must consider how they can maintain quality an
control when using crowdsourced delivery. For example, in the restaurant vertical, research sugge
when facing a delivery issue, customers are more likely to blame the restaurant than the delivery s
It logically follows that the same concerns are present across other verticals as well. One of the
challenges when working with crowdsourced drivers is their lack of loyalty to the business. When d
are not motivated to create an exceptional delivery experience for customers, businesses may lose
brand loyalty.
Only by maintaining control of the entire delivery chain can businesses truly deliver on the high-qu
customer experiences that help them generate sustainable growth. In addition to measuring custom
satisfaction with the driver’s performance, businesses must also be able to track and utilize data a
driver responsiveness to new orders and drivers’ success rates at delivering orders within the prom
time frame, so they can make informed decisions, adjustments and improvements.
Maintaining quality and control over crowdsourced deliveries requires a dedicated technology laye
Technology can make it possible for businesses to embrace crowdsourcing — tracking, managing,
optimizing and scaling their delivery operation while enjoying the ability to control driver flows, mea
driver performance, understand customer satisfaction and collect customer feedback. Dedicated re
dashboards should provide real-time alerts, timely insights and the top-level reporting needed to m
critical business decisions.
The right technologies can even ease the process of training a constantly changing team of drivers
walking them through the processes they need to execute not only to ensure they fulfill their jobs a
needed, but also to enhance their experience and help retain them. By helping crowdsourced drive
their jobs better, this technology layer helps businesses deliver quality customer experiences — al
some of the concerns relating to delivery by drivers that are not the business’s employees.
Restaurants
In the restaurant vertical, the most popular crowdsourcing delivery models are crowdsourced RDS
(restaurant delivery services) and ecommerce / marketplace / RDS combinations. Restaurants tha
been slow to adopt delivery will typically start with one of the major RDSs, such as DoorDash or U
(in North America). As they scale, restaurants will often add additional RDSs and marketplaces to
their geographical reach and increase scale. As operations scale, most restaurants will transition f
simply enabling delivery to also measuring and optimizing it, forming strategic partnerships and tak
more control over their customer experience. This is the stage at which they typically seek the sup
technologies that can enable them to effectively measure, brand and streamline their entire deliver
operation.
Retail
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Excluding white-glove delivery and the delivery of large or bulky items, the delivery of retail packag
an emerging market that is currently served predominantly by crowdsourced delivery fleets, courie
postal services. These crowdsourced fleets are often ideally positioned for rapid delivery fulfillmen
all, from the customer perspective, if a pizza can be delivered within 20 minutes, it should also be
for a shirt to be delivered within a similar timeframe.
Retail is a unique market, as not all brands or delivery types are best served by crowdsourced solu
For example, premium retailers will often want to provide a premium delivery experience — one th
branded and executed by a well-dressed delivery representative. These representatives might also
required to provide on-site services such as installation, setup, upselling warranties or user educat
While this can be crowdsourced, the specialization required often leads retailers to take this opera
house or to work with a trusted outsourced fleet.
Grocery
Grocers are embracing a few different crowdsourced delivery solutions. Until recently, many groce
on a single crowdsourced solution for their delivery. However, given the challenging economics of
delivery and the increased competition from Amazon, many grocers are now exploring ways to div
their delivery partnerships and develop their own in-house picking operation and delivery fleet.
Leading grocers like Walmart are deploying multiple delivery solutions, including a mix of crowdso
delivery services and crowdsourced delivery fleets. Though a relatively small market, online groce
2
poised for fantastic growth. As the market continues to evolve, with major grocers improving their
offerings to better compete with Amazon’s growing grocery delivery operation in North America an
around the world, the economics of crowdsourced delivery will change. Grocers seeking to improv
agility to best position themselves in this changing market will increasingly look to crowdsourcing a
supporting technologies that will help streamline and optimize these complex operations.
There are a number of crucial requirements for a successful delivery operation however it’s execut
scaled. As businesses explore the possibility of adopting, scaling or optimizing crowdsourced deliv
they must maintain control over delivery operations. This control is critical to the business’s ability
measure and optimize its performance in delivery in order to continuously achieve the most efficien
streamlined delivery operation. Furthermore, businesses must carefully manage crowdsourced del
that it fits seamlessly into their delivery operations, enhancing rather than disrupting their delivery
Most importantly, businesses must keep their eye on the prize: providing exceptional delivery expe
and building customer relationships.
With the right technology stack in place, businesses across industries can enjoy the freedom to ad
crowdsourced delivery without forfeiting control over crucial components of their delivery operation
Notes
1. SMG, webinar, What Impact Is Third-Party Delivery Having on Your Brand + Business?
2. McKinsey and Company, Reviving Grocery Retail: Six Imperatives, 2018
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Chapter 8
ON-Demand Delivery
Over the last few years, innovators such as Amazon and Uber have disrupted the market to such a
extent that customer expectations in terms of delivery speed and convenience have risen exponen
across multiple verticals. Whereas it once took several days for an ecommerce order to arrive, cus
now expect everything to be available for ultra-rapid fulfillment, on demand and at a reasonable pr
These expectations are growing around the world. In Europe, over three-quarters of Spanish custo
(77%) and slightly fewer French customers expect one-hour delivery. In metropolitan areas, over h
1
customers expect retailers to offer one-hour delivery. Expectations also change according to age
67% of millennials expecting one-hour deliveries.
The bottom line is that businesses need to quickly find sustainable ways to meet their customers’
expectations. Although most customers (70%) are willing to pay more for faster or more convenien
2
delivery, virtually all customers (99%) expect the business to foot some of the delivery expense.
Depending on the vertical and how the orders are fulfilled, businesses can expect to cover anywhe
3
between 25% and 75% of these rapid fulfillment and delivery expenses.
On-demand delivery is particularly important for services such as food delivery, grocery top-up sho
emergency services (e.g., roadside assistance) and any type of delivery to busy, high-income shop
These types of customers want the ability to pick up the phone, order a product or service, and hav
show up at their door within the hour. That said, not every business is best served by optimizing fo
alone. Multiple studies have shown that customers generally prefer discounted or free delivery, as
convenient delivery windows, over rapid, on-demand delivery.
Nonetheless, on-demand deliveries are quickly becoming a necessity due to the highly competitive
market, turning them into strong differentiators in otherwise crowded markets. For example, over h
4
(69%) of consumers would not make a second purchase if their delivery was late, and over half w
with a competitor who offered faster service.
As well as enabling retailers to maintain market hold and retain customers, the on-demand model
presents opportunities for new revenue streams through premium offerings and subscription servic
example, service companies can offer premium rates for on-demand services, while grocers and o
retailers can explore white glove options such as garage drop-offs.
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Businesses new to on-demand delivery will need to reorganize their entire last-mile delivery proce
and deal with multiple challenges to ensure that their on-demand logistical operations — including
backend operations, dispatching, new fleets or drivers, and customer-facing actions — run smooth
that their customers can be provided with a flawless delivery experience. These challenges include
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There is no reason why supply chains cannot break the mold and adopt a customer-centric strateg
Without this focus on the customer, successful on-demand delivery at scale becomes exceptionally
difficult.
Peak Demand
Managing the logistics of on-demand delivery can be extremely difficult during peak times and pea
8
seasons. Holiday shopping accounts for more than a quarter of annual retail sales in the U.S., an
year during the holiday season businesses struggle to manage delivery coverage to make their pro
delivery times.
Restaurants, too, face uneven demand on a daily basis. During the rush lunch and dinner hours,
restaurants typically have to scramble to send out enough drivers to cover deliveries. Before, in be
and after those two blocks of time, the number of drivers they need dwindles. Often, restaurants w
employees who typically function in other positions and deploy them as drivers during the lunch an
dinner hours. However, given that driving usually has a different pay rate than other roles, restaura
have to carefully track when these employees perform which roles.
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One possible solution for both of these scenarios is to hire third party delivery services to provide
additional delivery personnel for peak hours. However, because it can be hard to know in advance
many drivers will be needed, restaurants may be overspending if they pay a subscription fee to 3P
and/or crowdsourced delivery services. Logistics platforms that automate staging can help food br
keep deliveries cost-effective, while handling the ebb and flow of employees at peak times and ens
that there are always enough drivers for on-demand deliveries.
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These considerations become particularly important during peak hours or seasons. Retailers facin
massive increase in order volume during holidays, and restaurants facing the same problem aroun
time, often work with third party providers to successfully deliver all of the orders at these peak tim
means that data will be coming in from disparate fleets and systems, and automated processes ar
needed to automatically identify driver shortages and assign orders to third party drivers as necess
Exceptions, too, must be managed in order to prevent disruptions to an entire batch. With short de
windows, there is very little time to check quality or verify the efficiency of optimized routing. As a r
exceptions such as late changes to orders, sudden shifts in personnel or unexpected inventory sho
risk disrupting the entire delivery flow.
Successfully executing deliveries in a manner that can account for exceptions requires that every d
flow be carefully orchestrated and heavily automated. Backend data from all teams should be sync
seamlessly and automatically for real-time accuracy across all delivery stages. Changes in one sys
such as order cancellations or a change in drivers, must be automatically updated in all other syste
For example, restaurants that use their own POS may not receive updates about a late driver from
external fleet. This must be rectified with a centralized platform that can connect data points from t
parties. Automated alerts from that system can notify relevant stakeholders when an exception has
place. Then, the person in charge of the next stage in the flow should consult the company playbo
order to resolve the issue in a timely and effective manner.
ROI
While businesses must address multiple issues to effectively run on-demand deliveries, the primar
must be profitability. The economics of on-demand delivery is such that it is difficult to make it prof
especially in lower-margin industries. To make their delivery operations successful, particularly wh
operating at scale, businesses must be able to look at the big picture of their business and gain ins
on ROI from aggregated data. The leadership must have the high-level information to understand w
delivery times were met — and if not, why not. Costs should be visible on dedicated dashboards a
broken down by stages and disparate elements. For example, if multiple fleets are used for deliver
the same region, decision makers need insights into performance and costs for each fleet, to unde
which are over- or under-delivering and which may be too expensive.
Implementing data-tracking technology is critical to understand both delivery performance and how
resources play into both performance and costs.
Must-Have Technology
On-demand deliveries are complex and time-dependent. As businesses work to scale this delivery
technological solutions and process automation become critical success factors. Automated flows
that orders are dealt with accurately and efficiently; that every stage of the flow receives the correc
relevant data about the order and delivery; and that the delivery goes smoothly, with any exception
handled automatically. The only way to ensure reliable handoffs is to use technologies that can int
with existing legacy systems, while remaining user-friendly for all ecosystem participants.
Also critical for scaling enterprise delivery operations are technologies that provide faster staff onb
eliminating the need for extensive training time and speeding up time to optimal performance for th
or driver. Similarly, delivery routing, dispatch and driver management all benefit from the introducti
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technological solutions that can aggregate data from disparate systems and multiple fleets. Outsou
crowdsourced drivers in particular benefit from process automation. For example, an app that inclu
route and stop information, detailed delivery instructions, and prompts for individual stops (e.g., co
proof of delivery, perform an on-site service, etc.) help ensure that every driver, new or experience
their deliveries out on time.
On-demand delivery opens up new avenues for market share through customers who value speed
are willing to pay a premium to get their orders delivered on demand. To take advantage of this gro
consumer base, businesses must ensure that they fully understand the unique challenges of this h
customer-centric, time-sensitive delivery model, starting with the processes and technologies requ
ensure that the large volumes of orders with highly demanding SLAs can be delivered without a hit
Notes
1. Metapack, State of eCommerce Delivery, 2018
2. Capgemini Research Institute, The Last Mile Delivery Challenge, 2018
3. Commonsesnse Robotics, Crossing the Grocery eCommerce Rubicon, 2019
4. Dropoff, 3rd Annual Report, I Want It Now: Same-Day Delivery + The U.S. Consumer, 2018
5. Eyefortransport and Quintiq, D3 2019
6. Capgemini Research Institute, The Digital Supply Chain’s Missing Link: Focus
7. Gartner, Supply Chain Maturity Assessment for Demand-Driven Supply Chain
8. Deloitte, 2018 Holiday Survey of Consumers
Chapter 9
Planned Delivery
In the age of Amazon, customers expect better delivery options. What those options are depends o
individual and their specific situation. A person may prefer free and convenient delivery for specific
purchases, but still be willing to pay a premium price for speedy delivery in other situations. Meetin
new demands requires that businesses optimize and manage their planned deliveries using robust
technology that allows them to rethink how they approach their delivery operations: how they oper
them, how efficient they are, and what kind of customer experience they provide.
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By establishing the right processes, guided by technology, businesses can reach optimal efficiency
keep costs down for planned deliveries, while providing flawless customer delivery experiences at
right price point.
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The growth in the number of next-day and other planned deliveries through online purchases prese
numerous opportunities for brands and businesses. Over 50% of all ecommerce orders are now
5
scheduled for next-day delivery, reaching a peak of 55% in September 2018. These planned deliv
are attractive for convenience-oriented consumers, who want more options regarding where and w
their packages are delivered. In one study, 44% of consumers indicated that they planned to take
advantage of pickup or dropoff points, so they could avoid staying at home waiting for a delivery or
missing a delivery, while 28% were interested in delivery to a locker near their home.
Online ordering has already proven popular with shoppers, and digitizing delivery will provide furth
opportunities for businesses to retain existing customers as well as attract new ones. Across the U
Canada and Europe, shoppers are 15%–20% more satisfied with their online shopping experience
6
with their retail shopping experience. With most companies, however, innovation ends when an o
placed. This can no longer be ignored, given the clear advantages of providing better planned deliv
especially considering that 61% of consumers will choose to shop with the same online retailer afte
positive delivery experience.
Transforming the customer experience with planned deliveries is aided by the fact that, for many
businesses, it’s not new. Retail, service, third party logistics, healthcare and a plethora of other ind
have traditionally offered planned deliveries and have much of the infrastructure and many of the
resources for optimized delivery already in place. Adding technology layers on top of existing
infrastructure (e.g., drivers and fleets, dispatchers) and implementing new solutions to improve effi
and visibility takes time, but less so than with on-demand deliveries, and less so than if implement
entirely new delivery model.
The opportunity to create more efficient delivery services is of particular relevance to 3PLs, which
judged based on their ability to meets SLAs and offer the best rates. By optimizing their existing
dispatching and routing operations for efficiency, these service providers can offer better, more
competitive SLAs and delivery pricing that will net them more customers.
The problem is that when the routing and dispatch process is not automated, last-minute changes
exceptions can disrupt SLAs for multiple orders and lead to a succession of missed delivery times
optimization today must be highly accurate, as well as flexible enough to account for exceptions, s
customers used to ordering from Amazon will not accept anything but on-time delivery. (For more o
efficiently managing exceptions, see chapter 9.)
Time-on-site is another expensive consideration that manual route optimization rarely gets right. B
bulky deliveries in particular can take substantially longer than regular deliveries, making time-on-s
to estimate, especially if the delivery also includes white glove drop-off or installation, two added e
that show dramatic variations in terms of the time spent on site. Additionally, the large trucks used
types of deliveries, as well as some types of services, take up more parking space, and it may take
substantially longer to find a place to park.
Underestimating time-on-site leads to frustrated drivers and annoyed customers, while overestima
leads to inefficient routes and expensive underutilization of resources. (For more on the challenges
and bulky delivery, see chapter 4.)
Efficiently working with multiple fleets is another key step towards keeping delivery costs down and
meeting customer needs. Most companies that offer planned deliveries at scale work with multiple
in various combinations of in-house drivers and third party providers. When planning optimized de
operations, companies will have to look at how they manage both the fleets as a whole and the dri
individually.
Many types of planned deliveries, including big and bulky, white glove, and most types of service,
carried out by drivers and other staff with special skill sets. Each delivery or service must be match
the team with the right skill set. Furthermore, each order must be matched to the right medium of d
Retail, for example, usually requires trucks, especially for big and bulky purchases; restaurants, by
contrast, often have bicycle or motorcycle messengers and use crowdsourcing and marketing serv
Even if drivers and routes are both perfectly organized and running smoothly, businesses still need
able to manage customer-facing difficulties during planned deliveries. Many industries still offer lon
delivery windows, which demand more from the customer, are particularly hard to schedule, and o
scheduled, are difficult to change. This is juxtaposed with the fact that the majority of shoppers are
for more flexibility when it comes to scheduling deliveries, and are unhappy with their current inabi
10
change a delivery date if they cannot be home.
This is not theoretical: 30% of shoppers have made changes to delivery preferences after their ord
been dispatched, and a further 48% would have done so were the option available. In addition, eve
missed delivery adds an average of $70 in additional delivery costs and an average of 4.6 days to
delivery process. Despite these realities, long, inflexible delivery windows are still common, even t
in the long term, businesses will have to offer the flexibility to enable changes post-dispatch in ord
remain sustainable.
Developing solutions to address these common customer pains at scale must be an integral part o
supply chain strategy for any business to remain competitive in today’s landscape. Businesses nee
implement delivery technology solutions while creating a strategy that is centered around developi
efficiency, visibility and flexibility they need to be cost-efficient and deliver the flawless fulfillment
experience that customers are looking for.
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Time-on-site is another important aspect of routing that technology can help define more accuratel
especially a holistic solution that incorporates route optimization, machine learning and driver track
Driver apps can record how long drivers spend at a given location, and to account for parking diffic
they can mark drivers as having arrived when they get close to the destination, marking that time a
beginning of time-on-site. Tech solutions using machine learning can then aggregate that data to fi
patterns per driver or location and eventually predict time-on-site. The resulting route optimization
accurately include time-on-site, which dramatically improves delivery estimates, on-time deliveries
overall customer satisfaction.
Driver empowerment
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If customers are to be at the heart of any planned delivery strategy, driver empowerment must be o
its core tactics. Drivers often have to scan their own packages; some even have to plan their route
typing each order into the route planner of their choice — or even just Google Maps. The first step
adding efficiency to this process is to align routing methods, ideally through a single tool.
On a centralized management platform, the moment an order enters the system, it syncs with the
integrated driver apps. Drivers immediately see the relevant order details on their app and, if the p
includes a routing solution, also have their entire day mapped out before they begin. This saves pr
time that can be used to include extra orders on their regular route or to extend it. Outsourced flee
their own driver apps can integrate with the central platform to receive the order details and report
driver location and other real-time data about the delivery.
These solutions are a strategic imperative, both for removing inefficiencies from the planned delive
process, and for providing visibility to management and customers alike. Driver apps and integrate
management tools also accelerate the onboarding process for new drivers, improving the delivery
fulfillment process far more quickly than if the drivers had to develop the knowledge and expertise
own.
The strategy for these improvements should focus on getting more done in less time with fewer res
while providing a great customer experience. It is also important that, whichever technological solu
are implemented, they be flexible enough to work with the delivery resources already in place, so t
businesses can start seeing immediate results without having to start from scratch.
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things lost when control is passed to a third party. Solutions with white-labeled apps mean that the
delivery experience will be attributed to the brand, and not to the source of ordering, as is too com
today.
Having integrated data and delivery operations with full visibility opens up opportunities for offering
services and loyalty programs that can help defray the cost of deliveries. These add-on services a
fairly new development in the world of planned deliveries and may not be relevant for all industries
furniture retailers, large electronic appliance vendors, and other businesses that offer big box deliv
and white glove services, add-on services help differentiate their brands while providing customers
the multiplicity of options they are looking for. (For more on add-on delivery services, see chapter 5
The term planned deliveries refers to how a company organizes its delivery processes ahead of tim
also to the customer’s desire to make the choices around their own delivery. Customers now expe
ability to plan where, when and how they will receive goods and services, along with options that w
them to balance convenience and price to their satisfaction. As businesses adopt new tools and st
— including customer-centric operations, multiple fulfillment channels, and automated dispatch an
delivery solutions — they are able to become more efficient and cost-effective while simultaneousl
providing their customers with more convenient delivery options and better fulfillment.
Notes
1. Accenture, Reroute Your Strategy for Last-Mile Delivery. 2017.
2. Convey, Last Mile Delivery: What Shoppers Want and How to #SaveRetail. 2018
3. Metapack, 2018 State of Ecommerce Delivery. 2018.
4. Dropoff, I Want It Now. Same-Day Delivery + The U.S. Consumer. 2018.
5. IMRG, Valuing Home Delivery Review. 2018.
6. UPS, Pulse of the Online Shopper Study, 2018.
7. Eyefortransport & Quintiq, Dynamic Distribution Disruption, 2019.
8. Capgemini, The Digital Supply Chain’s Missing Link: Focus. 2018.
9. Yakel, Jerry, “The Real Cost of a Truck Roll. S&C Electric Company, 2017.
10. Convey, “Overcoming the Large-Item Delivery Challenge”.
Chapter 10
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Planned / On-Demand
Delivery
Every enterprise business with goods or services that need to be delivered faces the same challen
balancing high customer expectations for convenient delivery at reasonable price points with the h
costs involved in offering same-day and next-day fulfillment. Meeting these continuously increasing
expectations in a cost-effective manner demands both careful planning and the operational agility
deliver multi-day, next-day, same-day or on-demand as required by the customer.
Many businesses are turning to a planned / on-demand hybrid model in order to utilize the same
resources to offer both rapid on-demand delivery and pre-scheduled, planned deliveries. This mod
be difficult to maintain, as it can easily overwhelm traditional dispatch and routing solutions. Howev
when implemented successfully, it provides companies with the choice, flexibility, efficiency and
effectiveness they need to succeed in today’s ever-changing market.
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In order to provide on-demand or next-day deliveries, as well as lower-cost planned deliveries, del
providers must develop the functional flexibility to manage both models in tandem, without compro
delivery quality.
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team members required, inventory availability, inventory location, transit time, parking availability, t
site, vehicle type and vehicle capacity. Obviously, a human being can only take a limited number o
variables into account, which is why technology must be involved in the process.
Continuing the example above, an automated routing system would be able to efficiently match dri
certifications and truck capacity with delivery requirements. This frees up dispatchers to deal with
exceptions and situations where humans need to apply common sense in order to fine-tune the ma
results.
Whereas manual routing typically takes dispatchers a few hours, automated routing technology ca
provide a fully optimized route within minutes. Many dispatchers will then further optimize these ro
based on their personal knowledge of the business, the drivers and the local geography. When driv
arrive the next morning, they are given their runs so they can begin their day’s work.
For more on planned delivery, please see chapter 8.
A “just get it done” mentality is understandable at times, but quickly proves inefficient and expen
at scale.
The last but most important consideration is data collection, quality and synchronization. Planned /
demand hybrid delivery models require that different teams in an organization operate as a stream
efficient assembly line. Everyone from dispatch, picking and staging teams, to the drivers, custome
service and end customers must be kept in the loop with the right information at the right time.
To scale any planned / on-demand delivery operation, companies must utilize advanced technolog
efficiently manages the flow of information and data from the order through to the final delivery.
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When it comes to complex, hybrid delivery models, real-time data integrations are essential to ens
that the entire ecosystem is working in tandem, on the right tasks at the right time, in order to ensu
time and efficient delivery. Furthermore, when there is an exception, such as a cancellation or
rescheduling, the changes should automatically cascade to all the teams, updating them through t
platforms they already use.
It is important that whatever technology businesses use will integrate with the business’s existing s
chain systems, from the TMS and WMS all the way down to inventory management and CRM syst
robust, two-way data synchronization ensures that every supply chain and business platform, as w
all team members, are aligned at all times.
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and can provide driving directions and delivery instructions (e.g., don’t ring the doorbell), prompt d
collect proof of delivery or perform an on-site service, and more. By automating the management o
delivery driver, businesses ensure that drivers perform their delivery duties as required.
Notes
1. Dropoff, I Want It Now. Same-Day Delivery + The U.S. Consumer. 2018.
2. Capgemini Research Institute, The Last-Mile Delivery Challenge. 2019.
3. Kuijjpers, Dymfke, et al. “Reviving grocery retail: Six Imperatives”. McKinsey & Company, 2018.
4. Macquarie Research, Concierge Economy in Retail. 2018
5. Magill, Elizabeth, “15 Best Grocery-Delivery Services That Are Worth the Money”. GoBankging
2017.
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