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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. 

Categories
business data e-commerce mobile product Retail social media sustainability technology Uncategorized

The cost of free returns, manufacturing post-Brexit, the resale revolution

A round-up of everything you might have missed in relevant fashion, retail and tech industry news over the past week.

TOP STORIES
  • The unsustainable cost of free returns (Vogue Business)
  • The brave new post-Brexit world of UK manufacturing (Drapers)
  • Retail at risk: analyst cite resale revolution (WWD)
TECHNOLOGY
  • A guide to virtual beings and how they impact our world (Tech Crunch)
  • Facebook’s vision of glasses that read your thoughts isn’t just a dream (Fast Company)
  • StockX was hacked, exposing millions of user records (Tech Crunch)
  • UK financial watchdog finally decides which cryptocurrencies to regulate (The Next Web)
  • John Lewis partners with UK robotics companies to create blueprint for robot-human interaction (Charged Retail)
SUSTAINABILITY & PURPOSE
  • True sustainability not achievable until 2021 (Drapers)
  • Textile waste has increased 811% since 1960 (Supply Chain Dive)
  • Inside Nuuly, Urban Outfitter’s attempt to take on the rental clothing market (Modern Retail)
  • Waitrose to expand sustainable unpacked trial (Retail Gazette)
  • Beauty’s giant glitter problem (BoF)
  • Carrier bag sale in supermarkets drop 93% (Retail Gazette)
  • Why are fashion supply chains so wasteful? (Retail Dive)
  • H&M called out for ‘greenwashing’ in its conscious fashion collection (DeZeen)
RETAIL & E-COMMERCE
  • Retailers to scale back ‘kiss of death’ Black Friday (Drapers)
  • How Zappos used AI to rebuild its search engine (Modern Retail)
  • Amazon adds styling service to Prime Wardrobe (Retail Dive)
  • Why this Japanese e-commerce giant is doubling down on fashion (BoF)
  • Can retailers break up with the mall? (Retail Dive)
MARKETING & SOCIAL MEDIA
  • The golden age of Instagram marketing is over (BoF)
  • Inside Westfield’s VR jungle adventure (Retail Gazette)
  • MCM immersive pop-up playground lands in Shanghai (Jing Daily)
PRODUCT
  • Rag&Bone puts the focus on fit in fall initiatives (WWD)
  • Should brands charge more for larger sizes? (Vogue Business)
  • Duchess of Sussex to launch clothing collection (Drapers)
BUSINESS
  • Risk of global recession threatens luxury party (BoF)
  • China’s tech startups flourish in talent-rich second-tier cities (Asian Review)
  • Gucci fears spark Kering sell off (Bloomberg)
  • The Future of Maison Margiela (BoF)
CULTURE
  • Beauty is designing packaging for the visually impaired (Vogue Business)
  • Pantene breaks beauty advertising norms by celebrating grey hair (Campaign)
  • The Hong Kong protests: what brands need to know (BoF)
  • Meet the designer behind a new line of functional and fashionable accessories for wheelchair users (Teen Vogue)

How are you thinking about innovation? 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.

Categories
Editor's pick product sustainability

Sustainable packaging: The refill market opportunity everyone is missing

UK supermarket Waitrose recently announced a trial in one of its stores for refillable products. 46 items in total, including detergent, washing-up liquid, cereal, pasta and more, are being tested – inviting consumers to bring in their own containers for replenishment rather than buying yet more plastic packaging. 

According to Greenpeace, the top 10 UK supermarkets produce 810,000 tons of throwaway or single-use packaging every year. The initiative at Waitrose therefore also sees all produce involved offered at up to 15% cheaper, incentivizing shoppers to do this and buy more sustainably as a result. 

The first thing it brought to mind for me, is why doesn’t this already exist? 

As a consumer, it’s increasingly frustrating to run out of shampoo, detergent, cleaning products, even moisturizer, and have no option but to throw the bottles or containers away (or in some instances put them out in the recycling in the vain hope their second life becomes a reality). I, for one, would love to be able to take all of such items with me next time I pop in store and top them up again instead. And don’t get me started on miniature travel items. 

I’ve talked to dozens of other people about this subject however, and the responses have always hung somewhere between a concerted yes on wanting to do it and a feeling that it takes a lot of effort to actually carry it out. 

Consumers are lazy, we know that. 

Yet many of us now take our ‘Bags-for-Life’ with us every time we shop – popping them in the back of the car or in our handbags when we’re out and about so we don’t get caught without one and need to purchase a new plastic disposable carrier instead. 

The barrier for these refill uptakes should not be that much bigger. It’s an achievable consumer behavior shift. 

The scheme to reduce plastic bag usage in the UK is evidence. It has seen over 15 billion being saved from going into landfill since it was introduced nearly four years ago. That stat is particularly significant when you think about the fact these items can take around 500 years to breakdown. It’s the same for plastic bottles. 

What’s more, since then, we as consumers have been increasingly exposed to numbers like the 28,000 tons of single-use plastic disposed into our oceans every day. Or that by 2050, there’s expected to be more plastic in the sea than fish. Whether verified in their entirety or otherwise, such insights have spurred us into action beyond just reducing plastic bags – resulting in adopting various other habits including reusable drinks bottles, keep cups, paper rather than plastic straws and more.

The fact supermarkets like Waitrose – and others – are exploring the opportunity (or necessity) here to look at such shifts within food and household goods packaging more broadly, seems a natural one as a result. 

The other way to look at it is through the emerging brands and startups stepping into the space. 

Loop is a new initiative from waste management company, TerraCycle, announced at the World Economic Forum in Davos this year, for instance. It is being supported and trialled by major businesses including Unilever and Procter & Gamble. It enables shoppers to purchase regular goods in new durable packaging that is collected, cleaned, refilled and reused. This is not about the consumer refilling it themselves, but the company doing it on their behalf.  

Eco-friendly household product brand, Ecover, by comparison, which is owned by SC Johnson, has introduced bottles that can be used more than 50 times directly by consumers. It has refill stations across the UK for products including washing up liquid, hand soap, laundry detergent and all-purpose cleaners. The company calls the initiative a “Refillution” and says it’s been experiencing higher demand than ever before over the past year. It is one of the companies trialling with Waitrose. 

Other examples are being experimented within the beauty and cosmetics market, which accounts for around 120 billion units of packaging each year, according to retailer Lush. 

Lush itself is constantly innovating so as to introduce products that come without any packaging at all, but also has things like a zero-waste lipstick that it announced at the end of 2018. These are refills that can be placed into any other lipstick container the consumer already has at home, or bought with a recycled case from Lush to be used over and over again. 

British health and beauty retailer Boots meanwhile, recently opened a new wellness concept store in London that includes refillable skincare products from eco brand Beauty Kitchen.

And skincare brand Olay has just announced it will trial a sale of refill pods for its Regenerist Whip moisturizer from October 2019. Those pods fit into existing jars, saving consumers from needing to get a new one each time they run out of the product. The team estimates one million lbs of plastic saved if five million jars worth are refilled instead. The pods themselves are also recyclable. 

The Olay test will run for three months with the aim of then evaluating learnings to inform future packaging. “It’s really important for us to get it right because only then can we bring this concept to market at scale,” said Anitra Marsh, associate director of sustainability and brand communications for skin and personal care at Olay’s parent company, P&G.

And test and learn is clearly the stage we are at here. There are inevitably many barriers for adoption in a broader sense beyond assumed consumer apathy. The logistics of pulling many of these initiatives off are notable, but so too are concerns around things like hygiene, which is particularly pertinent when it comes to skincare or beauty – hence the pods from Olay rather than a mass refill station that is more possible with the cleaning products of Ecover. 

Much of this was noted in a report by WRAP over 10 years ago – highlighting other things like contamination of product, no easy mechanism of transferring the ‘use by’ date on the packs, the stackability of bulk refills in store or at home, and more. Arguably, all of that still stands, which is why there hasn’t been huge uptake in this space, and is what makes this such an interesting discussion. 

All roads point to huge opportunity and need for evolution, and yet so little has actually yet happened. Frankly, disruption here is needed, and as with successful movements linked to sustainability and the circular economy in other sectors (the resell market, the sharing economy and more), there is a growing business case to do so as a result. 

Right now, brands are largely jumping on a marketing opportunity and benefitting from the halo effect that surrounds reducing single-use plastic consumption. In doing so, there’s a dodge of responsibility occuring. 

Which brings us to a need for regulation in this space to force companies to adhere (something that is being looked at more broadly in the UK for single-use plastic, as this legislation dates back to 1997). It wasn’t until this came in for plastic bags that it actually made a difference to the landscape. The ability for change to really happen often needs a good shove in the right direction. 

That coupled with innovation is what will move this space forward. Our company, Current Global, is one built on solving challenges, and strictly speaking there’s very little here that doesn’t have a solution in front of it waiting to happen. 

The question then is who is going to be the first to truly do it, and at scale, in terms of grabbing the enormous market opportunity it presents. Now is the time.

How are you thinking about new packaging 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.