Since the start of the pandemic, companies everywhere have risen to the occasion to meet consumer demand for faster at home delivery, but have still fallen short. Younger generations are driving demand for more flexible and much faster delivery times, leading companies to get creative through delivery systems or partnerships with new delivery companies.
Back in 2018, Domino’s Pizza launched what they termed the “delivery revolution,” with hotspots around the city allowing people to have pizza delivered to parks, sports fields and beaches. They listened to their customer’s demand for pizza delivery to non-traditional places and formulated a plan.
Years later, eCommerce and retailers are beginning to adopt a similar mindset – how do we get purchases to consumers faster amidst this supply chain crisis and era of delivery revolution?
According to experts, consumer spending increased from November 1 to 24th by 19.2%, decreased 1.4% during Cyber Week (Thanksgiving to Monday, and then increased by 5.6% After Cyber Monday. It seems the “extended holiday season” helped kick off the shopping season quite strong and consumer spending still was able to grow in the typical cyber week and holiday weeks for shopping.
Another major milestone hit his year was a significant uptick to days with more than $3B spent. Last year, there were 25 days with more than $3B spent daily, and this year there were even more with 38 days.
The food industry has worked with delivery services like Doordash, Uberteats and Grubhub because they have more optimized supply chains, multilayer distribution and software-assisted delivery expectations of its drivers and restaurant partners. There is a time sensitivity when delivering food that may not transfer over when trying to provide similar delivery services for products consumers purchased for same day delivery.
There also needs to be a shift to leverage customers’ transaction data to better understand purchasing patterns and behaviors. Many eCommerce organizations have relied on their retailers for this for years, and as the shift continues to the more popular D2C approach (Direct to Consumer sales), each individual eCommerce business will now be responsible for understanding purchasing trends to buy smart for upcoming seasons.
Are Consumers Ready for Drone Delivery?
Royal Mail is testing drone delivery in the UK and instead of a typical delivery van arriving with your package, a small aircraft, slightly bigger than a microwave oven, hovers above your driveway and lowers your package secured with something similar to fishing line onto the ground. The potential to improve logistics efficiency with speed, mobility, and tracking are huge, as well as the opportunity to reduce labor costs in a market that has such a huge labor shortage would be monumental.
However, though this is technologically viable option right now, there are still several scenarios that are needing additional testing and strategizing. For instance, this particular drone being tested at Royal Mail is quite reliable and affordable, but can only carry packages under 7 lbs. and are limited to a max of 6.25 miles.
Drones are also regulated by the FAA in the US and will require filing certain standards and operating procedures for delivery. This may not be a challenge in more rural areas, but then delivery companies are facing the maximum of a 6-mile delivery in a testing area that may have tens to hundreds of miles between homes and ranches.
It is also quite challenging to deliver in cities where one drop could service entire buildings with hundreds of different consumers. There are pilot programs in effect with robots, similar to the kiosk approach. The consumer is given their unique code that then opens the kiosk robot to provide access to only their purchase. This solves the access issue, but opens the door for many other points of error in the delivery process.
The Delivery Revolution is Here
As consumers begin to see successful same-day delivery of products, demand will only continue to rise making this a critical revolution to prepare for in this odd post pandemic supply chain crisis.
Studying the competition to see how newly announced partnerships like Ulta Beauty and Doordash work and knowing your eCommerce businesses data will help to take advantage of opportunities as they arise.
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