Last Mile Delivery Optimization
The Ins and Outs of On-Demand Delivery: What It Is and How It Operates
May 11, 2023
7 mins read
Meet Sarah, a hardworking professional who returns home after a long day at work to an empty fridge. But fear not! She remembers her trusty on-demand delivery app for groceries.
With a swift tap on her smartphone, Sarah embarks on an exciting shopping adventure. She scrolls through a selection of grocery stores, adding an assortment of items to her cart.
Sarah confirms her order, summoning a flurry of notifications that set the wheels in motion. The chosen grocery store springs into action, meticulously gathering her goodies and preparing them for their journey.
The driver receives the notification, picks up the order, and heads to Sarah’s address. She tracks the delivery in real-time and prepares to receive the groceries. The driver arrives, delivers the order, and Sarah conveniently pays through the app.
Sarah effortlessly replenishes her groceries thanks to the on-demand delivery app, saving time and energy. This highlights how on-demand delivery services cater to immediate needs through technology and efficient logistics.
This is a typical account of a successful on-demand delivery experience that is the common experience of many urban populations. And while it does sound seamless in this recounting, on-demand delivery involves careful coordination and meticulous execution, ensuring a satisfying experience for customers like Sarah.
What is on-demand delivery all about?
On-demand delivery is a service that fulfills immediate customer needs by providing timely and convenient delivery of goods or services. Advancements in technology and ever-evolving customer expectations have made this service gain significant popularity in recent years.
Global statistics strongly support the widespread adoption of on-demand delivery. In 2022 alone, an astonishing number of over three billion people worldwide utilized online food delivery services. Among them, approximately 1.2 billion individuals relied on grocery delivery platforms, while around 1.8 billion people opted for meal delivery services to conveniently order their desired food online.
How does on-demand delivery operate?
On-demand orders are usually placed via an online platform, often through a mobile app that picks up their location easily. Once customers place the order online, a notification is sent to the delivery provider or driver that’s nearest to the location and is available to fulfill the order. This can be a restaurant, grocery store, retail shop, or relevant service provider.
In an ideal scenario, the delivery provider often uses a navigation system integrated into their app to help determine the most efficient route to the customer’s location. This system also considers factors such as traffic conditions and other time constraints.
The delivery provider or driver then transports the goods or provides the service to the customer’s location. They may update the app with real-time tracking information, allowing the customer to monitor the delivery progress.
Once the delivery provider or driver reaches the customer’s location, they hand over the goods or complete the service as requested. The customer may be required to confirm receipt of the order through the app, which may trigger the payment process. After the delivery, customers can provide feedback and rate their experience through the on-demand delivery platform. This feedback helps maintain service quality and improve future operations.
Read the case study on how to increase visibility for on-demand pharma companies?
Why do logistics providers and consumers prefer on-demand deliveries?
On-demand hyperlocal deliveries are becoming increasingly popular among logistics providers and consumers. This is because these services are tailored to meet the immediate needs of local communities. Unlike non-hyperlocal deliveries, hyperlocal services can be completed within hours. In addition, the physical presence of stores and service providers in the locality enables prompt resolution of any grievances or complaints
Hyperlocal businesses operate within a limited area, and their focus is on last-mile delivery routing rather than warehousing and long-distance transportation. This makes reverse logistics a simpler process for them. As a result, on-demand businesses are well-suited for affordable and convenient services like personal homecare, food ordering, handyman services, at-home healthcare, and grocery delivery.
How to build your business around an on-demand hyperlocal delivery model?
Logistics companies and investors are keen to tap into the growing demand for on-demand hyperlocal deliveries. To build a successful business in this space, logistics companies should follow a traditional pattern of launching their business, starting with selecting an industry with high development potential, market size, and manageable competition. They should also choose a specific niche within the industry, identify their target audience, and develop a marketing strategy. Building partnerships with local businesses and delivery companies can help facilitate revenue flows based on commission from merchant partners and delivery charges from customers. Finally, finding a technology partner or on-demand app development service can help create a seamless customer experience.
Addressing the logistics challenges in on-demand delivery
In today’s world, where people expect instant gratification and seek convenient shopping options, on-demand delivery has become a boon for customers. However, as a business, meeting the demands and ensuring timely deliveries can be a daunting task. Operating a quick commerce delivery model often entails facing real-world challenges in the last-mile delivery process, such as:
- Managing a high volume of daily orders efficiently.
- Identifying and assigning suitable delivery partners for each order.
- Ensuring on-time and complete deliveries despite various on-ground restrictions and traffic congestion.
- Effectively handling both on-demand and scheduled orders.
- Addressing on-ground delays or errors with limited visibility.
These are the obstacles that need to be overcome to optimize on-demand delivery and enhance customer satisfaction. Choosing a dispatch management solution can bridge the gaps between logistics planning and execution with accurate dispatching, order scheduling, resource allocation and real-time tracking of orders. This is how it can manage the day-to-day dispatching of hundreds of orders:
Streamlining order planning and execution: Dealing with the high volume of daily orders in on-demand delivery can be a major challenge. Determining the right person for each task and identifying the most efficient route to deliver to customers promptly are crucial considerations. Locus offers an AI-driven dispatch planning solution that simplifies your day-to-day dispatch operations. It ensures timely order scheduling, efficient resource allocation, and optimized route planning, allowing you to handle your deliveries with ease.
Finding convenient time slots: Locus’ time-slot management system allows your logistics managers to plan last-mile operations more systematically. The Delivery Linked Checkout feature helps to unlock new revenue with premium fulfillment options, where customers can pick from multiple delivery windows—ten minutes, two hours, same day, next day—help businesses capture a wide range of customers by meeting their daily requirements.
Personalizing customer experience: With Locus’ advanced data analytics and insights, you can offer customers better, more personalized delivery services. It also allows decision-makers to stay on top of market trends.
Real-time tracking of orders: Time is of essence in on-demand delivery and Locus’ real-time visibility helps in tracking orders and providing live status updates to customers, improving supply chain visibility and keeping customers satisfied. Live updates and predictive alerts keep logistics managers on the top of ongoing deliveries and help avoid unexpected delays.
On-demand delivery is revolutionizing industries, ushering in a monumental shift that demands businesses to rise to the challenge. To thrive in this dynamic landscape, leveraging a robust dispatch management solution becomes. By optimizing last-mile deliveries, businesses can not only conquer the game but also proactively stay ahead of the ever-evolving curve.
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ABOUT THE AUTHOR
Mrinalini is an editor and writer at Locus. She reads whatever she can get her hands on and, more often than not, it happens to be Harry Potter.Read other blogs by this author
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The Ins and Outs of On-Demand Delivery: What It Is and How It Operates