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4 innovative retail fulfilment methods to know

The on-demand economy has fueled consumer desire for instant gratification. Products and platforms ranging from Airbnb and Uber, to Seamless or Deliveroo, have resulted in growing appetite in the market for convenience and immediacy on virtually anything and everything we can dream of today.

Needless to say, that has therefore filtered over to retail, with mega corporations like Amazon only feeding the notion that we need access to products within the same or next day – leaving little option but for other businesses to follow suit.

By 2021, over 2.14 billion people worldwide are expected to buy products online, reports eMarketer. A core aspect of the purchasing decisions that come with this is speed of delivery. According to McKinsey & Co for instance, 25% of consumers would pay a premium to receive products same day.

This of course presents logistical challenges. The cost of global delivery amounts to €70billion a year, according to McKinsey, with the last mile portion of that being the biggest challenge to fulfill efficiently. As a result, numerous logistics businesses have been scrabbling to offer the right kind of solutions for their clients. Over the next five years, 78% of them are expected to provide same day delivery, and within 10 years, 39% anticipate two-hour delivery, reports Zebra Technologies.

In a bid to be competitive, luxury has picked up on it as well. Farfetch now offer 90-minute delivery in 10 cities globally for instance, while Net-a-Porter is also striving to improve the shopping experience by offering its top tier a ‘You Try, We Wait’ same day service.

There are many others experimenting with their own methods alongside. Here are four areas of innovation within the delivery space we’re currently tracking…

CROWDSOURCED DELIVERY

The last mile of fulfillment is the most expensive and time consuming part of the delivery process, but numerous startups are looking to disrupt this space by enabling anyone to have anything delivered on-demand by trialling such areas as crowdsourced delivery. 

Similar to the structure of Uber, this allows individual couriers to deliver parcels straight to your door, or facilitate them for pick-up or drop-off around individual homes and offices. Crowdsourced delivery is expected to be adopted by 90% of retailers by 2028, according to a report by delivery company Roadie.

One e-commerce company currently trialling such a scheme is Zalando. This allows people to volunteer their homes as pick-up and drop-off points in Scandinavia. Primarily intended to benefit the customer, it also enables self-employed, retired or stay-at-home parents to earn some extra income.

ROBOTIC POSTIES
Ford Delivery Robot

McKinsey & Co predicts that more than 80% of parcels will be delivered autonomously in the next decade. The thought of robots walking around town beside us may seem a little futuristic, but many companies have already successfully tested them.

Postmates is intending to roll out a new autonomous delivery robot in Los Angeles later this year, for instance. The self-driving rover, named Serve, uses a camera, light detector and sensor to safely navigate the sidewalk. This can create a virtual picture of the world in real time and communicate with customers via an interactive touch screen. Serve is part of Postmates’ vision of a world where goods move rapidly and efficiently throughout cities.

Ford meanwhile is experimenting with a package carrying robot that will be able to walk, climb stairs and deliver your parcel to your front door. In partnership with Agility Robotics, the robot – called Digit – can successfully carry a 40lb package.

DRONES
Amazon Prime Air Service

Next up is autonomous urban aircrafts, otherwise known as drones. This could become a $1.5 trillion industry by 2040, according to Morgan Stanley Research.

Amazon has been leading the way in the space for some time with its Prime Air service, which is under constant experimentation. Its latest announcement said consumers will be able to get parcels delivered within 30 minutes or less by drone, thanks to a sophisticated ‘sense and avoid’ technology allowing it to safely maneuver in the sky. Executive Jeff Wilke stated that between 75%-90% of deliveries could technically be handled by drones in the future.

Strictly speaking, however, when that will be is still unclear. While the technology is improving constantly – using a combination of thermal cameras, depth cameras and sophisticated machine learning – there remains the small issue of authorization. Regulation is continuing to evolve, with a recent test moving things forward in the US market, and further developments happening in Europe, but Amazon’s view of commercial drone deliveries ready within just a few months, seems unlikely.

It’s not alone in trying however. Wing, a drone service from Alphabet – Google’s parent company – has completed a successful trial in Australia and is now doing so in Finland. Similarly, UPS is currently testing drones for the use of medical supplies and samples in North Carolina. Its long term plan is to eventually roll out the drones for the industrial, manufacturing and retail markets. UPS is another that has applied for a Federal Aviation Administration certificate that it hopes will allow it to operate the drones on mass.

ALL ACCESS
Waitrose While You’re Away Yale Technology

In a bid to combat the fact so many parcels see unsuccessful delivery attempts due to the absence of the recipient, there are also numerous experiments in the market to get around the need for humans to be present when the action takes place. This is especially being considered in the online grocery market, which is expected to grow 52% over the next give years to £17.3billion, meaning investments in home deliveries will need to be expanded.

One example we’ve seen comes again from Amazon, which has developed a system that allows couriers to deliver parcels to a customer’s car. The Key-In-Car service is available for all Prime members with a Volvo or General Motors vehicle dated after 2015. Through encryption, the courier can unlock the trunk without needing a key. This is available in 37 cities across the US. Similarly, Skoda is developing a technology that allows delivery firms one-time access to the trunk of the car. The biggest challenge to this opportunity is the threat of security. The risks can be mitigated however by couriers wearing body cameras and sending photographic evidence upon delivery, but retailers must gain consumer trust in the process first.

British supermarket Waitrose, part of the John Lewis Partnership, has gone even further by testing a ‘While you’re Away’ service in south London. This initiative gives delivery drivers a unique code that gives them temporary access to the customer’s property, allowing them to put away the shopping on their behalf. The lock technology has been developed by Yale and will be free to install for customers. To give them piece of mind, each driver will indeed wear a video camera to record their steps, which the customer can request access to.

How are you thinking about innovative delivery solutions? The Current Global is a transformation consultancy driving growth within fashion, luxury and retail. Our mission is to solve challenges and facilitate change. We are thinkers and builders delivering innovative solutions and experiences. Get in touch to learn more. 

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What you missed: What Trump means for retail, Alibaba’s $17bn Singles’ Day, Snapchat’s Snapbots

Trump America election retail
Analysts are weighing in on what a Trump presidency means for retail and for fashion

With the world reeling from the news of the US election over this past week, analysts have been trying to wrap their head around exactly what a Trump government will mean for retail. There are several good reads listed below.

Also hitting the headlines has of course been the mindblowing success and growth of Alibaba’s Singles’ Day – this year a $17bn affair, up from ‘just’ $14bn in 2015.

Meanwhile, some lighter bits to absorb: a wealth of new campaigns launched for the holiday season. John Lewis vs Marks & Spencer has got us excited, but also below is everyone from Gap to Macy’s, Debenhams and Kohl’s.

ps. Don’t forget to sign up for our Snapchat Masterclass – we’re currently offering 20% for our readers using code “community”.


TOP STORIES: US ELECTION & ALIBABA’S SINGLES’ DAY
  • What President Trump means for retailers [Retail Dive]
  • Fashion industry reacts to ‘devastating’ Trump victory [BoF]
  • Is fashion’s love affair with Washington over? [NY Times]
  • New Balance customers revolt after company welcomes Trump [Campaign]
  • $17 billion in one day: How Alibaba turned China’s Singles’ Day into a shopping bonanza [Digiday]
  • Virtual reality lets Chinese customers shop Macy’s New York store on the world’s biggest shopping day [Quartz]
  • Why luxury fashion brands are showing up for Singles’ Day [Glossy]
  • Michael Kors dished out discount codes with a casino-themed game on WeChat for Singles’ Day [AdWeek]
  • Five takeaways from Alibaba’s gigantic $17.8 billion shopping festival [AdAge]

BUSINESS
  • Nasty Gal files for Chapter 11 bankruptcy [Retail Dive]
  • Burberry profit falls 40% as costs rise [WSJ]
  • Kenneth Cole to shut down almost all its brick-and-mortar stores [Bloomberg]
  • Luxury coatmaker Canada Goose said to line up banks for IPO [Bloomberg]

SOCIAL MEDIA
  • Snap Inc.’s Spectacles are dropping in these crazy cool vending machines called Snapbots [AdWeek]

ADVERTISING
  • Luxury brands are failing in their storytelling [The Guardian]
  • Gap harnesses optimism in holiday ads [MediaPost]
  • Macy’s bets on power of Santa belief this holiday [AdAge]
  • Jennifer Saunders and Ewan McGregor sign up for Debenhams Christmas campaign [The Drum]
  • Kohl’s ramps up giving message in holiday campaign [AdAge]
  • Browns unveils new look, new website and innovative window campaign [The Industry]

UPCOMING EVENTS