A few years ago, online purchases usually came with limited delivery options. I can remember being given 12-hour slots on inconvenient days. In some scenarios, it even meant taking time off work to be at home for a delivery.
However, the dynamic world of e-commerce never stands still. The above example represented a ‘push’ concept, in which products had to be ‘pushed’ through the supply chain.
Items were typically picked at an e-fulfilment warehouse and sent to a parcel hub. There, sortation to a parcel depot close to the customer took place. The products were then sorted, loaded into a truck and sent out for delivery.
This often meant that consumers were not at home to receive their purchases, leaving them highly dissatisfied! Essentially, the push concept was supplier-driven and left consumers with minimal or no influence.
The dawn of the ‘pull’ concept
Fast-forward to the present day and the opposite is true. Over the past few years, there has been a steady shift towards a ‘pull’ concept. Now, the consumer is firmly in control of delivery times and locations, and can even choose additional options such as personalized packing and gift wrapping.
This started with next-day deliveries. The demand for increased speed and flexibility is now driving same-day, and even two- and one-hour deliveries.
Being able to choose is crucial for consumers and maximum convenience is expected. In one survey, 50% of shoppers abandoned their carts because the delivery options did not meet their needs*.
What drives consumers?
Delivery locations are also diversifying. Traditionally, products were delivered to people’s homes or places of business. Alternative options such as in-store pick-ups, ‘click and collect’ and deliveries to pick-up points (lockers) have grown in popularity.
Even ‘in-home’, ‘in-car’ and ‘in-fridge’ deliveries are on the horizon. The only barrier is consumer trust. Customisation is also important to online shoppers, who expect a certain degree of personalisation (eg gift wrapping) and value-added (VAS) options.
Cost and control are other important drivers for change in the supply chain. For some consumers, free delivery is important. Others are happy to pay to get items delivered when and where they want. Subscription models are increasing in popularity and offer customers unlimited free deliveries in return for a set annual fee.
In addition, consumers demand real-time updates about the status and location of their orders. Incredibly, 90% of online shoppers track the status of their orders*. They increasingly want to be able to change the date and location of their deliveries.
Adaptability within the supply chain is required to support the ‘pull’ concept. This means that operations within warehouses and parcel centres must change to remain as efficient as possible. For this reason, automation is essential.
In the warehousing sector, there is a move towards order-driven systems. That’s why Vanderlande created the FASTPICK goods-to-person system. By using ADAPTO shuttles, an entire order can be fulfilled on a single workstation. Order lead times of less than ten minutes can also be expedited.
In parcel centres, carriers do not typically reserve packages for delivery at a later date. This can be solved by implementing a temporary storage buffer. Our ADAPTO shuttle system is the ideal type of automated storage and retrieval system and we are receiving more requests for such a solution.
High-level controls systems are critical when scheduling orders. To support multiple processes, our VISION software suite can be implemented. This facilitates a smooth storage and order release management process.
Having the right information
To enhance efficiency and ensure maximum service levels to consumers, data science plays a vital role. This is especially important in the dynamic e-commerce environment in which there is already a need for the continuous tracking of goods.
This includes having real-time visibility over the entire supply chain and enabling dynamic route planning. By using data science, we can continuously optimise our solutions and deliver maximum value to our customers.
With the aid of new data sources and through in-depth analyses, our intention is to move to a ‘prescriptive’ model. This will allow us to optimise our customers’ processes in real time, aligned with their individual needs.
Embracing the future
Consumer demand shows no signs of slowing down. My expectation is that deliveries will become fully personalised in the near future. Warehouses and parcel centres must continually align with the ‘pull’ concept in the execution of personalised deliveries.
However, this involves significant and imminent changes to their traditional way of working. Automation is vital in realising these new requirements. Due to the inherent flexibility in our solutions, our customers can be better prepared to move away from traditional methods, embrace new business models and quickly respond to changes in the market.
*) MetaPack: 2017 State of E-commerce Delivery.