InsightsSurvival of the fastest?

Can you imagine ordering your products online and receiving them within 30 minutes? It’s not beyond the realms of possibility in today’s e-commerce world. Delivery times have been getting shorter and shorter in recent years. 

It started with next-day delivery, then came same-day, and then within the hour. Now a supermarket in China can deliver to customers within half that time in a three-kilometre radius.

Achieving this kind of speedy delivery requires changes to the supply chain, which has large implications for retailers. 

Established companies, such as Zara and Walmart, are using their stores as fulfilment and shipping centres to deliver more quickly to their customers. 

New start-ups are setting up micro-fulfilment centres in cities; other retailers are introducing new software platforms to facilitate an Uber-style kind of parcel delivery – where products are delivered from store to customer by independent contractors. 

Moving to the city

Warehouses and parcel centres are moving closer to cities to enable faster delivery times. Old shopping centres and bus stations have even been converted into logistic centres, and last-mile facilities have also been set up – where parcels from different shipping companies can be consolidated for further distribution into cities.

In line with these developments, technology is crucial to increasing the speed of deliveries. In addition to shuttles used in stores by the likes of Walmart and Zara, as well as sorters and AGVs used in parcel centres and DCs, the logistics IT system enables fast delivery by real-time planning and scheduling, optimisation and continuous visibility.

The need for speed

There is clearly a demand for faster delivery times and this has been a driver behind the development of some of our solutions at Vanderlande. Take FASTPICK, designed especially for e-commerce and omni-channel warehouses.

It’s a goods-to-person order fulfilment system that uses our advanced ADAPTO shuttles. Combining the ADAPTO shuttle system and the ability to fulfil an entire order on a single workstation results in an order fulfilment lead time of less than ten minutes.

For parcel centres, we offer sorters that are able to sort a complete product range within a very short timeframe to the correct outgoing dock, without the need for manual intervention. As a result, an individual parcel can be sorted within minutes.

Put the brakes on

But in the race to provide the shortest delivery time, it’s worthwhile to pause and think: what do online shoppers really want? While fast delivery may be a good option for some, particularly if the item is for a certain event, and if they live in a metropolitan area, it’s not the most important factor in their online shopping experience. 

According to consumer research, free delivery ranks more highly than fast delivery, with most customers willing to wait for their order if they don’t have to pay for delivery. In fact, some research has shown that consumers will actually spend more to qualify for free delivery.

What’s most important for consumers is choice when they check out – in terms of when, where and how their item will be delivered. Whether it’s home delivery, pick-up points in stores, various lead times and time slots – customers want a variety of options to meet their needs. 

Those surveyed have claimed they are willing to wait if they can choose the delivery time themselves. And if the range of delivery choices doesn't meet their needs, half are likely to abandon their online shopping cart altogether. 

Deliver on your promises

For many customers, it’s not necessarily speed that matters most, it’s the certainty that their order will arrive when it’s supposed to. Retailers need to keep their promises when it comes to delivery. By providing real-time updates and timed delivery slots, they can reassure shoppers that their items will arrive when expected.

With so many varying factors, we advise our customers to comprehensively analyse their consumer needs before designing or adapting their warehouse or sorting centre. Customer needs and preferences can vary from country to country, and even from one age group to another. 

Regardless of their differences, however, consumers are agreed on two things that retailers would do well to consider: make sure to offer a range of delivery options possible, and be able to guarantee precise and reliable deliveries.

Erik de Jonge
Erik de Jonge
Market Intelligence Manager

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