That’s the word of our times.
With all the apps doing the rounds, everything happens in an instant. Have a thought that the world should know? Type it, tweet it. Have a photo that you took on your weekend cycling trip, upload and post it with a crazy caption on Instagram. Hungry? Food from your favorite restaurant is a tap away. Need to send across $10 that your friend loaned a week ago? Simple, open a payments app, type in your PIN and send it. Life is really about convenience, almost everything is just a swipe or a tap away.
In this era of instant gratification, is it too much to ask for a same-day delivery or a preferred time-slot based delivery from your favorite E-commerce firm?
Customer is at the heart of E-commerce
It is no longer a secret that same day delivery could change the face of online shopping. It is, in fact, the holy grail of E-commerce, as it marries the convenience of online stores with the ‘here, take it’ immediacy of the offline players.
Brands have started to recognize the importance of same-day delivery and have started experimenting with the same. Once these experiments take off, the same-day delivery demand will only grow.
Take Amazon Prime for example. It is Amazon’s annual or monthly paid membership plan which offers free two-day shipping as well as discounted one-day shipping, along with video, music, etc. According to Statista’s Amazon Prime – Statistics & Facts, “As of March 2019, there were approximately 103 million Amazon Prime members in the United States. Industry sources estimate that 62 percent of Amazon customers in the United States were Amazon Prime members, up from 47 percent in December 2015.” The shipping offering is what makes Amazon Prime so popular.
While Amazon is leading the way, a lot of E-commerce players are piloting same-day delivery across Southeast Asia, Europe, and India. These E-commerce players are also looking at changing their logistics model to enable same-day and slot-based deliveries.
Why is last-mile delivery an important part of customer satisfaction?
According to Capgemini’s ‘The last-mile delivery challenge’ report, “A great last-mile delivery service that delights consumers will go a long way towards attracting and retaining customers.” In a survey the report had conducted, 82% of satisfied customers have shared positive delivery experiences with friends and family.
If a ‘good’ delivery experience can go a long way, imagine what slot-based delivery or a same-day slot-based delivery can do.
Slot management enables customers to pick a time slot most convenient to them.
“Consumers do want fast delivery, but 73% of them said that receiving the delivery in a convenient time slot is more important than receiving it quickly. However, only 19% of firms rate the ability to specify time slots as a top priority,” says Capgemini’s report.
Slot-based and same-day delivery helps hasten the adoption of E-commerce supply chain optimization and also offers a chance for E-commerce players to push loyalty programs and also enable product up-sell and cross-sell. The fact is— people are ready to pay for convenience and good customer experience.
Why same-day and slot-based delivery now?
eCommerce Fulfillment Services has become mainstream across the globe, thanks to increasing internet penetration and the ubiquity of apps. Consumers now expect products from sectors such as personal care, electronics, home appliances, medicines, online grocery, to be delivered immediately. Companies are realizing the upsides of enabling same-day slot-based deliveries.
“If given faster delivery options, consumers will be more loyal. For example, 55% say that a two-hour delivery option would increase their loyalty and 61% say the same for same-day delivery. But when delivery moves out to three days or more, only 30% say this will increase their loyalty.
This likely reflects that consumers see this as a commoditized, mainstream option that is offered by most players. Despite the loyalty opportunity at hand, only 19% of firms offer two-hour or faster delivery. Making faster delivery options available is a significant opportunity for leading firms to differentiate themselves from their competitors and meet consumer expectations,” highlights the Capgemini study.
Same-day or slot-based delivery is just an evolution of the present next-day/multi-day delivery. While some might feel that the usual next-day delivery will be eaten up, same-day and slot-based delivery will overall only propel online commerce further. It will make the end customer experience seamless.
Also, as pointed out before, it will result in E-commerce companies pricing the deliveries at a higher range and over time, the economics of scale will make same-day and slot-based deliveries a win-win for both customers and E-commerce players.
How exactly does slot-management work?
Imagine that your delivery vehicle works for 10 hours in a day and you (an E-commerce company) is looking to provide two hours delivery slots. So, if your vehicle starts working at 8am, you will have five slots (8-10 am, 10-12 am, 12-2 pm, 2-4 pm, 4-6 pm). The customer can choose one of these slots and the company has to ensure delivery within the chosen time slot. The company can configure the slot length and timing, and the slots can be open before any number of days required.
The route optimization logistics challenge and how Locus can help
Logistics will make or break same-day and slot-based deliveries. It is both an operational challenge and a goldmine of an opportunity for logistics players. The truth is on-demand consumer requirements cannot be met without smart logistics. Route optimization will ensure that SLAs are met.
The problems that E-commerce players need to solve to enable same-day delivery are:
- Increase First Attempt Delivery Rates (FADR)
- Route optimization
- Better vehicle/rider capacity planning
- Eliminate delivery schedule calls
- Enhance end-customer experience
Artificial intelligence and machine learning can help in ensuring a seamless same-day logistics experience. AI can help at all stages, right from planning the route, allocation of duties, execution and even analytics. This will result in fuel savings, monitoring of on-ground activities, SLA adherence, and finally a great end-customer experience.
Same-day delivery and slot-based deliveries will change the face of E-commerce in the days to come and the day is not far away when you can order your favorite gadget and it’ll be at your doorstep before you finish reading its review.
While same-day delivery is changing the world of business, here’s something exciting from our end that could potentially enable you to be a part of that change.
Trust us, it’s worth it!
Join Faizal Kuraesin, Head of Supply Chain Partnership at Bukalapak, and Krishna Khandelwal, CBO, Locus, on March 18, 2020, at 2 pm WIB, in our webinar ‘Same-day delivery and how it is changing businesses in SEA’.
- Geocoding and why it is an important part of the same-day delivery puzzle
- Real-time traffic and how it impacts same-day delivery
- What are the other constraints when it comes to same-day delivery and how can tech address these
- Omnichannel fulfillment to enable same-day delivery
This post was authored by: Vignesh J