By Danny Hudson, Director of Retail & CPG
eCommerce has had to adapt rapidly the past few years. If global pandemics have taught us anything, it’s that the industry can transform and change to meet the challenge. Retail has been hit hard in some areas, but has flourished in others. Shop fronts closing didn’t stop consumers from purchasing, it did however change how we purchase.
Omnichannel shopping was pushed to the forefront with consumers being able to order online, over the phone, through click & collect, and (in some regions) purchase at the physical store. Despite the innovative systems retailers put in place to adapt according to the current circumstances, many industries linked to eCommerce were pushed to the brink. Supply chains struggled, postal carriers were short staffed, and many simply didn’t have the infrastructure of software to overcome these challenges . Many companies looked for holistic solutions, and while many have slowly been changing their processes there are still more advancements to be made in eCommerce and retail. Intelligent delivery is lighting the way, offering new and easy solutions for producers, carriers and retailers.
Intelligent delivery is still a very recent term, and it has been developing rapidly since then. Mostly, the term is used in relation to software. Many retailers have come to the realisation that they’ve needed such software to orchestrate deliveries more efficiently.
The heart of this has been flexible solutions. There is no one size fits all when it comes to eCommerce. Needs vary, plus technology is changing, and quickly! Integrating a variety of platforms can be next to impossible, and can also be stressful to retailers. For this reason many of these same retailers have been swapping to all-in-one platforms which fuse everything from production, purchase, tracking, all into one tab on your computer. This is still an emerging market in which some software developers are paving the way. Many of these innovative new programs are being picked up by large companies, as they include everything from stock management to GPS tracking during delivery. These softwares provide an overview of the whole process from creation to delivery.
To break down some of the aspects connected to intelligent delivery, let’s consider the following key points:
- Sustainability and efficiency
- Use of AI for optimisation + BPM Engine/tools
- Seamless software integration
Sustainability and efficiency
Environmental sustainability awareness is a pressing trend in eCommerce. As environmental protection and sustainability continues to be a hot topic of conversation, many retailers have put carbon reduction targets in place. In eCommerce, ‘sustainability’ can range from business models to product packaging and delivery routes, plus returns. On this, the eCommerce industry’s role in leading a more sustainable future will become increasingly important in the next few years.
As a means to address increasing demands for sustainability from the consumer and B2B market alike – a great deal of retailers and eCommerce businesses have responded to topics such as CSR and effective supply chain management, by implementing efficient planning in terms of production and delivery.
On this, ESG (Environment, Sustainability and Governance) is becoming a key measure for business and now needs to be reported on in Annual Reports. Investors are starting to back companies that have a better ESG rating than others due to the worth a business’s green status carries.
The issue is that retailers are not yet fully aware what the impacts of their supply chain are on their ESG rating and cannot measure it. When it comes to the post purchase experience, and last-mile delivery, it is even more of a guessing game!
Supply chain emissions are difficult to measure, however, companies need these statistics in order to work towards their net zero goals. If calculating your supply chain CO2 emissions manually or for the first time, it’s suggested to use the spend-based method.
In this method, you multiply the capital value of a purchased product or service with an emission factor (the amount of emissions produced per financial unit). This will give you an estimated value of the emissions produced. This method won’t deliver entirely accurate results, as it does not account for specificities in the calculation.
The second method, the activity-based method, accounts for the missing information. You will however need to collect additional data. This method makes use of the company’s emissions data and that given by its suppliers. For example, the liters of fuel burnt with deliveries is multiplied by the emission factors of the activities. This equals the emissions estimate.
There are simple, yet valuable, steps to take in cleaning up production and delivery. For example, route optimisation is one of the most effective ways retailers and eCommerce companies can cut back on their fuel costs, as well as eliminate carbon emissions. This is why FarEye’s intelligent delivery management platform aims to reduce the miles driven, to ultimately reduce the amount of carbon dioxide emissions per year. As deliveries account for 90% of a company’s carbon footprint, route optimisation impacts a business’s journey to becoming a more sustainable enterprise. The last-mile carries at least 5% of supply chain emissions.
Use of AI for optimisation + BPM Engine/tools
Technological innovation is no longer optional in delivering a fully integrated retail experience. In an effort to optimise the consumer experience and increase eCommerce efficiency, the use of AI for optimisation is now prominent among online retailers, as well as traditional brick and mortar businesses.
With AI leading the way in merging the on- and offline shopping experience, many consumers now ‘window shop’ online before heading to the store (Google research has shown an 80% increase in store visits when companies incorporate Omnichannel shopping*). Having systems and software that talk to each other is a large part of this. This is part of the reason why FarEye values, for example, enhanced visibility and traceability, AI use for optimisation and automation, BPM engines/tools, and flexible solutions.
The use of AI does not only enhance the quality of an omnichannel experience, it also enables retailers to deliver better services against lower costs. According to an expert, with eCommerce getting increasingly competitive, the consumer experience benchmarks are steadily on the rise too. While consumer experience is an absolute necessity, managing operations in a technology-driven, innovation-first manner is key to offering new services and gaining a competitive edge. To ensure businesses maintain a high level of consumer satisfaction, as well as logistical operations efficiency, it’s recommended to make use of helper-tools that can assist in automating service delivery systems.
The use of BPM (Business Performance Management) tools have also become an integral part of optimising business processes. These tools are designed with the purpose of, for example, automating business workflows – with the goal of improving efficiency and performance rates, whilst minimising errors in management, production and delivery systems. To demonstrate, certain BPM engines assist with mobility in logistics. The aim of this is to address the issue of greater visibility and transparency. Supported by Artificial Intelligence and advanced Machine-Learning algorithms.
BPM engines help eCommerce companies and retailers to increase efficiency by, for example, enhancing the consumer experience through easily scheduling store pickups, ensuring time-bound deliveries and reverse pickups. BPM tools also assist with route optimisation, live tracking and predictive analytics, like delay calculation. As for enhanced transparency, it’s imperative that retailers and eCommerce companies partner with delivery agents who merge the ‘pick and deliver’ process seamlessly with real-time updates about package statuses.
Seamless software integration: flexible solutions + real time tracking and traceability
Effectively sourcing inventory, meeting customer SLA’s and efficiently running last-mile operations is a balancing act. With great advancements being made on the front of enhancing the consumer experience, retailers should prioritise innovating to differentiate from their competition within the last-mile experience.
In order to capitalise on the opportunities presented by software integration, businesses should think about how platform technology can allow them to operate differently, service consumers better than competitors and work more efficiently.
Focusing on the post-purchase experience, investment in last-mile services and meeting consumer demands and SLA’s are paramount. Retailers have recognised that not delivering on consumer promises and services in the last mile is costly business and has a negative impact on the lifetime value of consumers.
Offering the consumer flexible solutions and realtime tracking and traceability is an effective way by which the retail and eCommerce industry can enhance their last-mile delivery experience. The last mile is focused on delivering items to consumers as quickly as possible, while minimising company costs, as well as taking into account the sustainability value of delivery route optimisation. Giving consumers the flexibility to change their delivery location or time is a strong action businesses can implement. While this does not ensure tracking and traceability, this does empower businesses to do so.
To conclude, in order to succeed, retailers must be innovative, offer environmental sustainability delivery options and, most of all, understand the demands of the demographics they serve and be able to flex their operations and services to delight their consumers. Flexible technology allows for retailers and eCommerce businesses to react quickly, and if they are proactive enough, they can serve the market demand for greater transparency, this is why solutions built in AI will help retailers learn and adapt more quickly. By taking the correct steps towards enhancing the value of intelligent delivery systems, retailers can enhance their consumers’ omnichannel shopping experience. .
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