Amid rising congestion, steep expectations from e-commerce customers, and increasingly complex and costly last-mile fulfillment: how is growth possible?
To answer this, Nishith Rastogi, Founder and CEO of Locus, and Dan Vanden Brink, Global Vice President of Customer Success, talked about ‘Fueling Growth: Make Last Mile Your Differentiator’ on June 8 at the Gartner® Supply Chain Symposium/Xpo™.
At the symposium, they spoke about the on-ground realities that make last-mile optimization a mandate for companies, how a data-driven approach is essential for last-mile excellence and shared key insights from Locus’ journey of becoming a real-world ready dispatch management platform.
For a quick look at the top 5 points in the talk
Last-mile excellence is no more optional
Nishith acknowledged that growth in the past few years has been difficult. “But, as the cliché goes: Never waste a good crisis.” Noting that the last mile has become mainstream with customers, it has now become imperative to get it right.
“Imagine that you go to a retail store, pick up a shirt, but they’re not allowed to check you out. That’s similar to not getting your last-mile deliveries on time.” In fact, research by McKinsey noted that over half of consumers will switch from businesses with too long delivery times.
Hacking last-mile growth with a data-driven approach
Given the complexities of the last-mile, a wholly new approach is needed. “As businesses, if all of us increase our focus on data over intuition, we can actually flip this on its head.” He recounted how a World Economic Forum (WEF) report noted that effective data-based solutions such as dynamic rerouting can reduce emissions by 30% and delivery costs by 25% by 2030 when compared to a “do nothing” baseline.
Given that last-mile costs account for more than 50% of all shipping costs, Nishith reiterated this is the critical driver for revenue today for all companies, whether new-age ones or established enterprises.
How Locus is fueling last-mile growth with leading enterprises
Nishith then recounted how Locus grew from two friends teaming up to create a routing algorithm to a global enterprise with 300 team members serving customers across 30 countries. Today, Locus’ real-world ready dispatch management platform brings value to the last mile, right from the checkout process to the final delivery.
Over seven years, Locus has helped make over 650 million deliveries covering over 2 billion miles. In the process, Locus has saved fuel to power more than 2,400 missions to Mars. Along with Dan, the two shared some key insights on their growth journey with prominent customers:
Unilever: A leading multinational Consumer Packaged Goods company worth €50 billion that sells 400 product brands across 190 countries with 150,000 employees. Nishith recounted that their main challenge was to increase product deliveries to retailers and distributors. Speed is of the essence as the number of stock-keeping units continues to grow while shelf space remains the same. Locus has been working with Unilever to optimize the operations of its 600+ depots spread across Vietnam and Indonesia and counting. According to Nishith, the brand teamed up with Locus four years ago as it was an informed consumer that prized agility and precision in decision-making in an increasingly complex and nuanced last-mile space. Especially when timelines for making decisions have been reduced to “…minutes, not hours or days.”
Croma: Part of the Tata Group, Croma is a leading Indian electronics appliance retailer that has an intricate network of hundreds of dealerships and warehouses across the country. According to Dan, one of the biggest challenges at the final-mile for them was not only delivering products but also coordinating with the installation and removal of old appliances. By working closely with Locus, they could rapidly scale with the timely and well-coordinated provision of deliveries, services, and pickups to customers at their doorstep.
Nishith also mentioned how having a meaningful impact on customers is what motivates everyone at Locus. He recounted how while visiting a Blue Dart warehouse (a leading transportation and distribution company in India, part of the DPDHL group), a few delivery executives told him that Locus’ solutions have helped them make their deliveries on time, which gives them the chance to go home earlier and spend quality time with their loved ones. “At the end of the day logistics is what impacts the lives of all of us: Whether it’s those who are ordering, packaging, or making deliveries. That’s a very critical aspect to what we actually do.”
An age of speedy, reliable and sustainable growth
When asked about how transportation brands will look at growth in the future, Nishith noted that while the past five years have been about the speed of deliveries, sustainability will be a primary pillar in their journey. “Today, sustainability is no more driven by investor mandates by CSR, but it’s actually driven by the consumers.” He gave an example of retailers in London offering consumers an option to receive deliveries two days later as opposed to same-day delivery, as it was more beneficial for the environment. “The adoption of that is as high as 80%. Everybody wins.”
Companies are actually making sustainability the primary competitive differentiator to generate more consumer demand. Because in today’s times, speed, reliability and sustainability are non-negotiable for growth as a transportation brand. “And, I believe that’s not just the future of deliveries. That’s the future of retail. That’s the future of how we buy anything.”
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