It’s always fun when you partner with a tech company that is so complimentary to your own. When you speak the same language, yet don’t compete. We orchestrate orders across fulfillment nodes, they orchestrate the last mile.
Given that last mile delivery has been such a hot topic this year, last week I caught up with Nikolai Avrutov, VP Alliances at Bringg. He shared his take on fulfillment experiences, delivery trends, and the ever important, sustainable delivery. Let’s see what he had to say.
In your recent 2020 Retail Holiday Guide you talk about creating a ‘memorable fulfillment experience’. What do you see as the top 3-5 things that make a fulfillment experience memorable?
That’s a great question. Think back to the last time you made an exciting online purchase, or had an exciting interaction with a brand. What made that experience memorable? For me, memorable experiences are about the entire journey, from browsing a retailer site or app, all the way through to the unboxing experience. As I shop, what pickup or delivery options am I offered? After I checkout, the excitement about my purchase builds. Do you as a brand, build on this excitement with personalized and branded order updates, or do you make me log into your site? Do you offer me the option to select a convenient delivery or pickup time? Can I easily reschedule? The day of the delivery, my excitement is at its peak. Do you feed my excitement with regular updates and a live tracking map? Following the delivery, do you ask for feedback in a seamless and convenient manner? These are the primary touchpoints that I see as creating memorable fulfillment experiences.
We’ve seen lots of ‘quick rollouts’ of click and collect, curbside pickup, and ship-from store this year, but a lot of them are not optimized. What are some of the most common pain points?
The most common opportunity we see across every single retailer and their delivery partners, is the need to scale up and optimize delivery and fulfillment. Improving manual, inefficient processes allows these brands to improve customer experience, while boosting new revenue growth and scalability. Typically, these are the result of outdated technology, or a lack of technology overall. For example, many retailers ask customers or delivery drivers to call the store or tap an “I’m Here” button when they arrive for a curbside pickup order. The data clearly shows that orders that are sent out after the customer has already arrived take about 5x longer to fulfill, averaging up to 10 minutes per order. When the retailer can accurately predict when the customer will actually arrive (by tracking their progress), they can fulfill the orders up to 5x faster, completing orders within 2 minutes of arrival. At scale, this means that retailers can fulfill more orders per staffer, reducing operating expenses, while providing a faster, better customer experience.
What do you see as the biggest opportunities for improvement?
The single biggest opportunity retailers face, is to leverage their retail footprint and inventory for online order fulfillment. In today’s market, every retailer can and should be utilizing their retail footprint to rapidly fulfill online orders – beating even the juggernauts like Amazon on speed and convenience. If a shopper can get a pizza delivered from a local store in 30 minutes, they should be able to get their groceries, medicine, or holiday gifts delivered with the same speed and convenience. Technologies like Bringg allow retailers to implement local delivery through third party fleets, in-store and curbside pickup, all in just a few days. The real impact however, comes with the automation and optimization that occur at scale. By digitizing delivery and fulfillment through an agile SaaS platform, retailers gain real-time insight, automation and control to continuously adapt to changing requirements and market conditions.
Let’s talk about Last Mile Delivery. How is it different from the other phases of fulfillment?
Last mile delivery is the polar opposite of first mile and often, middle mile logistics. The typical supply chain optimizes towards availability and cost, focussing on moving a consolidated, massive amount of inventory to a limited number of destinations. In contrast, the last mile requires moving miniscule amounts of inventory at comparably far faster speeds. As a result, both the financial and operational models are very different. From an operational perspective, consider something fairly straightforward, like routing software. In the first mile, every route is pre-planned, and legacy routing solutions are often sufficient. However, in the last mile, when deliveries are both planned and on-demand, where retailers rely on multiple delivery providers and at times, their own internal fleets, dispatch and routing are far more complex, demanding an entirely new class of technology solution.
How has Last Mile Delivery changed/evolved during the pandemic?
In most retail segments, last mile delivery was a strategic priority prior to the onset of COVID-19, with nearly every retailer allocating resources towards a 12 month or 24 month vision. However, the pandemic accelerated the market shift by three years, and did so virtually overnight. As a result, nearly every retailer is either planning or has already begun investing in rapid last-mile enablement, with a focus on both scaling up and optimizing. We have seen a number of retailers already in the early phases of their rollout scale up and accelerate plans, growing their delivery rollout by up to 6x in just the first few months of the pandemic. In tandem, as last mile delivery volumes grow, retailers tackling the financial realities of last mile delivery head-on, using technology to both scale up and optimize their last mile delivery.
What other trends are you seeing in Last Mile Delivery?
There are a number of noteworthy trends we are seeing across verticals, and around the world. With the initial onset of COVID-19, delivery volumes across almost every sector spiked to as much as two or in some cases, four times the normal levels. However, even after the world came out of the first wave of “lockdowns”, last mile delivery volumes remained high.
Another noteworthy trend is the growing role of the retail location in online order fulfillment. Whether this means delivery from store, click and collect or increasingly, curbside pickup, the local retail location is playing a pivotal role in eCommerce growth. Alongside this shift in focus, retailers are increasingly moving from a “get it live” to a “do it better” mentality. Asking a customer driving up to a curbside bay to open their phone, find their order confirmation email, click “I’m here” on the link, and then wait 10 minutes for their orders is no longer acceptable.
Shoppers demands have evolved. Safety and contactless pickup and delivery are top of mind. Shoppers want greater choice and convenience. For many retail categories, the need for instant gratification and rapid delivery remains important. However, no matter whether this is a 30 minute or a 7 day delivery, customer anxiety levels are high. Customers want to know where their orders stand, when they will arrive, and that they will arrive within the promised time. Alleviating this anxiety through real-time delivery updates, live tracking and easy scheduling/rescheduling will not only reduce call center volumes, but dramatically improve the customer experience.
Can you tell us about some specific challenges you’ve overcome for clients?
The upside to every client engagement is that there is never a shortage of opportunities for improvement, from digitizing manual processes to automating complex decisions by unifying different models or partners into a single platform.
For example, one major retailer asked curbside customers to call the stores when they arrive, and a store associate would bring out their order. This was unscalable, inefficient and a terrible customer experience. Together, we deployed an automated curbside experience that tracked inbound customers so that orders would be ready for handoff as the customers arrived. This retailer stood up our automated curbside solutions in just a few weeks, and scaled to every retail location in under 2 months. The impact has been profound, with real-time visibility and control reducing curbside turnaround time by as much as 5x.
A leading grocery retailer was in the early phases of their delivery rollout, relying heavily on manual dispatch to a couple of crowdsourced providers. We found that by better managing and measuring each fleet’s performance via a single, unified platform, we were able to both automate the entire dispatch process, and reduce their cost to deliver by over 20%, while improving their on-time delivery rate.
Similarly, a major TelCo retailer discovered that their lower cost delivery partner was actually performing at a far higher level than their premium delivery counterparts. By reallocating these deliveries and scaling up with the optimal fleets, this retailer doubled their eCommerce sales, while reducing their cost to deliver by almost 60%.
Across nearly every activation around the world, the last six months have been focussed on rapidly scaling up and optimizing at scale.
Tell us how you see Bringg’s solution and an Order Management System (OMS) like Fluent Order Management working together.
Today’s retailers look to their OMS partners, like Fluent Order Management to better fulfill their orders, improving their inventory allocation and customer experience. Bringg connects the dots, bringing data driven last mile innovations to these same retailers, and most importantly, to their customers. As an integrated technology offering, Fluent and Bringg provide retailers and their customers with scale, optimization and experience they need to only survive, but thrive in these tumultuous times.
Let’s talk about sustainability and delivery. What kind of trends are you seeing in the marketplace? How does Bringg support this?
Sustainability is a very interesting, and important topic. From a business perspective, sustainability means operating at the ideal margins, carefully balancing speed, convenience and cost to deliver the optimal ROI and the right customer experience. We have found that the only way to balance these often competing concerns, is through real-time visibility and algorithmic control over the entire last mile ecosystem.
On a larger, more global perspective, environmental sustainability is critical to not only our success as an industry, but the manner in which shoppers view and consider retailers. Technology is fundamental to improving the carbon footprint of last mile delivery. Better routing, order batching and fleet allocation ensure that the right sized assets are assigned to the right fleet, at the right time. Machine learning and predictive modeling ensure that delivery vehicles and customers waiting for a curbside delivery spend the minimal amount of time idling, improving both operational efficiency and limiting carbon footprints. In urban city centers, alternative pickup and delivery providers are frequently innovating, offering everything from delivery “on foot” to green, eBike delivery. In the 21st century, the greatest logistics challenge is not a lack of resource, but the optimal way to leverage every available resource to better serve the customer.