E-commerce is growing every year worldwide. It is expected to reach 5 trillion USD soon. And it will probably keep on growing in the upcoming years.
A significant part of its volume is in retail especially within grocery home deliveries.
The logistics behind home deliveries are set on top of a set of constantly evolving processes. Customers demand better services, narrower delivery booking slots and shorter lead times, preferably same-day deliveries. All at the least cost possible.
This requires very efficient logistics. And the highest efficiency sometimes require changing operational paradigms that have been in place forever. One can’t expect to achieve new better results while doing the same things as always.
Customers are getting more demanding but the most competitive companies are already providing proper evolutions. So check if your business is still falling behind with the following 3 signs.
Sign 1: The consumer can only book one delivery time slot
We may assume that customers want to be home for the shortest time slot possible when waiting for their groceries to be delivered.
The booking page of the e-commerce website provides several time slots for delivery. These may be wide (4-hour long or more) or narrow (1-hour). The narrower the better.
However, the customer may be available at home during multiple of the time slots shown on the booking page. If the website allows the selection of only one slot then the customer will be pushed to pick one out of his availability. Please notice the customer implicitly telling the e-commerce website that he is unavailable during any other time slot, which may not be true.
For instance, let’s suppose James is booking his grocery delivery from Acme Supermarkets e-commerce website. The booking page shows 1-hour time slots from 8am to 11pm. James will be home all day. But he is pushed to select one single time slot, so he picks 9am to 10am.
Acme will only know that James wants his groceries delivered between 9am and 10am, it will not know that any other time of the day would also be an option because James will be home all day anyway.
Now let’s suppose Abby – who is James’ next door neighbour in the same building – is ordering some grocery from Acme for the same day. But she’s only available during the afternoon when she gets back home between 6pm and 7pm.
Acme logistics department will now have to dispatch a truck that will visit the same building twice during the same day: between 9am and 10am for James’ deliveries and another between 6pm and 7pm for Abby’s deliveries.
And yet James will be home all day long. He could have been served within Abby’s time slot as well. But Acme’s e-commerce website won’t be wary of that. Because the website itself forced James to pick one single strict booking time slot.
All consumers want narrow delivery time slots. Nobody wants to allow the possibility to wait longer if there is an option to wait less time. But that may be a very expensive option for logistics as we’ve seen on this example. Visiting the same building twice on the same day is never better than visiting it only once. But how could that be avoided?
The most efficient way of managing slots does not require a consumer to select “the” time slot he wants., but rather it invites the customer to select “all” time slots he’s available.
This allows the vendor to collect the preferences of all its customers for the day and then plan the best routes accordingly. Such route planning process will occur immediately upon each order or during the following hours. And a route plan with that information will surely not include visiting the same building several times on the same day.
I know what you’re thinking by now: “But the consumer wants to know the delivery time even if he selects multiple options” and “Most customers will select only one narrow time slot anyway”. Let’s see how to work it out as well.
Even if the consumer allows multiple time slot options the route planning system will determine one single delivery time. Thus only one delivery slot will emerge as the elected from all the allowed options.
The customer allowed multiple options when posting the order but some time later the route optimization system has already chosen which one is the best. The e-commerce website then informs the customer of such decision by SMS or some other automatic contact channel. In the end the consumer will get a narrow window of time (e.g., 1 hour) to be required to stay at home even if he allowed other options initially.
Yet James’ and Abby’s orders will be matched in the same trip and delivery, saving Acme’s logistics a lot of extra miles, fuel and time.
Of course James may be rewarded for allowing multiple delivery options and saving Acme a lot of money. Rewards may come in lower delivery charges, next-purchase discounts, whatever.
Abby didn’t allow for more than one time slot. That’s fine. Many customers will still prefer to do so. But there will be no delivery discounts for such customers.
Taking advantage of multi-selection booking slots is key to reduce logistics costs daily. It also frees time to do more deliveries with the same trucks every day. It saves fuel and lowers CO2 emissions by running fewer miles.
It allows lowering costs to the customers and be more competitive by providing cheaper time slots than the competition.
All it takes is a live connection between Routyn and your e-commerce website or order management solution.
Routyn has an API for direct integration with e-commerce solutions. It allows planning and re-planning of all orders throughout the day in minutes. It also notifies customers by SMS or email of the delivery time slot once scheduled. It is a fundamental tool for state-of-the-art logistics.
This is the first of three parts on “3 signs your e-commerce logistics is obsolete”. Keep reading the second part here.