Ecommerce Delivery — Changing the mindset of retailers and customers

Free Delivery — Who came up with that? When economy ecommerce delivery was the only option this tactic was financially viable for e-retailers to use to attract and retain customers. With the birth of new more convenient delivery options this ‘free delivery’ mindset is still expected — but this needs to change. Same-day and on-demand delivery follow a completely different model to the economy solution, with lower order volumes and the increased man-power required for faster fulfilment these express options warrant a higher delivery fee.

Embracing ecommerce and preparing to scale

Ecommerce makes up only a tiny percentage — 1% of the overall retail market in South Africa compared to 8.3% in the USA. While our percentage might be small we look to our global counterparts to set the trends and test the waters. The time it takes for South Africa to catch up will be determined by the speed we start adopting the mindsets of these global frontrunners — which is fast-paced and innovative always evolving in order to win customers over by providing a better and more convenient user experience all round.

As a small to medium retailer in SA you have all the resources available to set up an ecommerce solution quickly and seamlessly — easy to setup ecommerce websites using prepopulated themes with plugins for inventory management, payment gateways and delivery that make purchasing quick and easy for customers — you can start selling online within minutes at a minimal fee compared to a few years ago where an upfront development investment was required. Once your platform is set up the fulfilment & delivery component requires some careful planning.

Who do I use? You will need to consider which courier is stronger in which area i.e. local / international. This will result in juggling accounts with multiple courier partners.

What do I charge? You’ll need to plug in your various courier rates into your ecommerce store — and it’s up to you whether you’d like to offer any discounts or markups on delivery. Because of low volumes your rates are likely to be higher, than established ecommerce stores, resulting in a possible barrier to entry.

For the large bricks and mortar retailers making the move into the ecommerce market requires a lot more consideration on all fronts as scaling becomes more complex than shipping one package from a nearby warehouse to a nearby customer.

Inventory Management — The foundation of great delivery

For large traditional (bricks and mortar) and online retailers inventory management is the most important part of the delivery chain. If you get this right it allows retailers the ability to offer a variety of delivery options seamlessly. However, succeeding here is not easy as a number of decisions need to be made, mainly around warehousing and distribution.

When it comes to warehousing a centralised dark store is the obvious answer for some retailers to take the hassle out of distribution. By definition a ‘Dark Store’ is: a large retail facility that resembles a conventional supermarket / store but is not open to the public, only housing goods used to fulfil orders placed online.

The advantages of a dark store:

  • You can manage inventory in real-time
  • It is faster to replenish stock when you’re running low
  • Managing returns is easier with one centralised location
  • Faster picking and packing timelines due to optimised store layouts
  • Automation Possibilities — Europe are already making use of goods-to-person pick stations where orders come in and a route is optimised for a mechanised system to send goods to the picker via a conveyor belt
  • Allows for cost effective same-day, next-day, economy and other delivery options

The biggest advantage is that that from these dark stores or centralised warehouses smaller hubs can be serviced in strategic locations where order volumes are high. Middle mile vehicles can run daily loads from dark stores to hubs. These hubs then act as an express lane for Picup drivers to collect and deliver parcels, they cover shorter distances between drops that are optimised to ensure efficacies.

Fulfilment from individual stores works when you are small

For small to medium retailers an outsourced dark store may not be the best option, low order volume and costs are the key factors influencing this decision. When order volumes are low they can be picked and packed from stores at the same time while servicing walk in clients, however as online orders scale managing this becomes hugely time-consuming. Stock control and returns become challenging along with picking and packing space on the floor in addition to managing deliveries.

The conclusion to inventory management and making the right decision simply lies in your order volume. Big retailers, you can’t afford to wait — invest in ecommerce now, ensure stock is available around the clock, ensure all the delivery options are available at the right price and last but not least make your customers’ ordering experience flawless from start to finish.

Not just the delivery man

As the way we shop continues to evolve so do the touch points. Day–to-day we’re used to the friendly shop assistant who goes to check in the back for sizes or the cashier who swipes your gift card and checks that you haven’t bought two left shoes. With the rise of convenience shopping online you’re faced with the helpful customer support tweet or the friendly voice on the other side of the phone. The only real human interaction comes into play when your goods are delivered. The delivery drivers are the face of the brand and need to be trained legends and customer service ambassadors.

At Picup, we’re changing the delivery landscape for good. The days of the conventional care-free delivery driver arriving when you’re not at home are numbered. While technology plays its part in improving many efficiencies in our drivers’ day a lot must be said about what goes into becoming a Picup legend. Our delivery legends go through rigorous on-board training before setting off on on their first delivery, they are also empowered to perform better with our earning model that rewards hard work and productivity. Each and every driver manages their own business equipped with the best technology to improve efficiency day-to-day.

You — the customer

Free shipping has been the most powerful draw card for retailers to attract customers to their online store and undoubtedly the most successful online marketing tool ever devised for ecommerce.

However, in more recent times retailers are starting to offer faster deliveries to attract customers to their online store. This poses a different set of cost challenges across the various service types that we’ve seen of late.

These are some of the ways retailers are trying to get orders to customers swiftly:

  • Shipping items from nearby stores
  • Using on-demand delivery companies
  • Using click and collect points

Because fast and free isn’t easy, selecting the best combination of service types is the way forward for e-tailers and will clearly give you a competitive advantage. They include:

  • 3 Hour Delivery
  • Time Slots (choose a date and time in the future when you want your order delivered)
  • Same Day
  • Next Day
  • Economy (2–5 business days)
  • Click and Collect (Choose the closest collection point you want your order to be delivered to.)

As the ecommerce market continues to grow so will the desire to deliver and receive orders quickly and cheaply. While most people are willing to wait for their orders if it’s free, there is an increasing number that are willing to pay for faster deliveries as the on-demand culture grows globally.

Picup — delivery simplified

At Picup we are focused on improving last mile standards across the board, for decades customers were used to the same delivery standards, the big players are working around the clock to improve service levels by using better technology and improved delivery standards. But they face limitations in their ability to implement new innovation into their well oiled machines.

Smaller more technology-focused businesses like Picup are changing the delivery landscape, by being more agile. We are able to trial and test new and potentially better ways to make a customer’s experience more pleasant, however before we can do that we need to ensure our drivers have all the tools readily available to deliver the goods day in and day out. Here are a few areas we are working on with our crowdsourced driver network:

  • Building a network of drivers that are trained and motivated to earn more with our unique driver earning model
  • Improve the driver experience with an incentivised delivery model
  • Creating a platform where our drivers are able to manage their own business, much like the way Uber’s platform works with their drivers
  • Giving customers more visibility on their deliveries using delivery notifications and live tracking to help our drivers minimise failed delivery attempts

There is no first time success with getting the above right from the get go, it requires constant trialling and testing of delivery routes and algorithms and adapting as you go. While the ultimate goal is on making delivery profit, our primary focus at such an early stage of our business life cycle to grow and sustain our crowdsourced driver network.

The long and short

Retailers and e-tailers small or large it’s time to invest in ecommerce if you plan on sticking around for the long term future, shortcuts will stunt your growth and before you know it you’ll be at the back of the queue!

Customers, the next time you buy online, know there is a lot more that goes into picking, packing and delivering your online order to your door, be loyal to the providers that stick to their promise and provides an online shopping experience that keeps you coming back. The ones that don’t will hopefully learn and adapt as quickly as possible as ecommerce prepares for serious growth in the months and years to come.