The retail sector has undergone more change in the last five years than in the previous fifty. The retailers adapted to consumption patterns, channel shifts and increased expectations towards convenience and speed. What’s more, the pace of change got accelerated predominantly due to the COVID-19 pandemic.
Nonetheless, the bar continues to rise both for retail and DTC brands. Indeed, the current race is to shorten the click-to-customer cycle time. And this is the primary factor that shall shape the future of omnichannel supply chains.
How important is the speed in delivery?
According to research, if delivery times are too long, nearly half divert to other options. What’s more, over 90 percent of US online shoppers expect free two-to-three day shipping. So, when contemplating how long is too long, this is a stark perspective that merits attention.
Nearly 75 percent of apparel, hard goods and specialty retailers are working on building network capabilities to render two-day or faster delivery. About 42 percent aspire to attain one-day delivery lead times in this year.
How does the delivery system work?
As of today, upon pick up, parcel carriers proceed to pick up the shipment from the distribution center. This often influences the order cut-off time, the latest time a retailer can accept an order to meet the delivery time. Once in the parcel network, it takes an additional day or more to reach the final mile to the customer.
In all, one or two-day shipping is no easy feat. The process requires tight cycle times and efficient execution across the supply chain.
Next up are the upcoming tech-driven solutions in the online delivery space that add efficiency to the entire system.
Inventory analytics
Today, retailers are looking to expand their fulfillment networks to incorporate more complex distribution modes such as large multimarket distribution centers, urban fulfillment centers and stores. With this comes choices and tradeoffs around distributed delivery. And traditional systems of allocating and replenishing inventory fall short in identifying these choices and tradeoffs. In resolving these technical liabilities, there are bespoke analytics and tools. Retailers now get to test, learn and adapt to sophisticated omnichannel inventory strategies. Focussing on this shall help fuel faster delivery times to customers and propel business profitability.
Automation technology and robotics
Robotics today makes the bulk of the buzz across the board. Sophisticated solution integrators and co-biotic (collaboration between humans and robots) solutions are already on the rise. In distribution centers, robotics can make for a stellar tool to enhance the speed and accuracy of omnichannel order fulfillment. What’s more, fulfillment solution providers have innovated newer economic models such as the RaaS (Robotics as a service) to help reduce the upfront capital burden. Going ahead, this calls for more scalable and variable cost models. And the best part? This proposition is an incredibly lucrative feat even for companies with limited automation budgets.
Buy online, pick up in-store and curbside pick-up
Throughout the pandemic, store-based pick-up options have experienced considerable headwinds and advancements. According to a July 2020 poll comprising 50 retail executives, store-based alternatives grew almost threefold from mid-2019 to mid-2020. Many retailers reported over a 200 percent growth in their offerings.
What’s more, according to a McKinsey report, over 60 percent of consumers intend to use these options after the pandemic. The reasons are convenience and free and fast offering. Going ahead, this can make for an ideal contender to ship-to-home delivery.
Investing in Smart Lockers
In the same way, you have lockers in the bank to safeguard money and other valuables, there are smart lockers that help secure your deliveries. The parcel locker market is poised to grow from $677.6 million in 2021 to $1644.1 million by 2028, a CAGR of 13.5 per cent. The growth acceleration comes from autonomous technology for parcel storage and management and eCommerce and parcel volumes.
What are smart lockers?
Given the forecasted growth numbers, it begs to ask this question. Smart lockers are sophisticated and upgraded versions of the traditional mailbox. Here, you get digital access, security cameras and integration with cloud-based software. In this, end-users can choose lockers as the delivery method during the checkout process. Once done, this is followed through by access instructions, usually a QR or SMS code for opening the locker electronically.
Even delivery companies and courier service providers can access these lockers using unique authentication when dropping off the packages. In this, the system automatically knows and recognizes the appropriate person.
Note that a lot happens at the backend. In this, the lockers communicate with multiple parties, including the locker administrator, delivery person or company, the eCommerce platform and the end-user.
Benefits offered by smart lockers
Given this sophistication, one expects to enjoy several benefits. Compared to the traditional pick-up points, smart lockers have on offer the following advantages:
- These can be placed anywhere, making it easier for recipients to choose heavy traffic areas
- Recipients can enjoy the convenience of 24/7 access
- The system is fully automated
- Quick retrieval. All the user needs is about ten seconds to collect the parcel
- Safe and secure. Only the final customer can access the locker
Types of smart lockers
The global smart locker market comprises standard lockers and temperature-controlled lockers. The latter is expected to experience considerable growth given the growing demand for refrigerated products. That is perishable items such as groceries and frozen foods. Also, there is an amplified demand for green and lean automated parcel technology.
At the end of the day
Most believe that a hybrid solution is the best. This renders customers the best of traditional pick-up points and modern, sophisticated lockers. What’s more, there is also continuous delivery, for which the capabilities of advanced forecasting, intelligent insights and real-time tracking are deemed integral. And this method is cost-effective for ensuring same-day delivery. With rising customer expectations and demand, this is of the utmost importance.