For years, retailers have focused on increasing delivery speed when it came to the last mile delivery to differentiate with service. In 2005, Amazon changed the complete game when they launched their Amazon Prime service, which guaranteed two-day delivery to customers. They introduced this service with the primary goal of increasing market share, while delivery costs and how they impacted margin were often not considered. Luckily, they had the financial backing and size to do so and quickly, second-day delivery was so successful that it soon became the industry standard.
Large retailers have further evolved the specificity of delivery by offering specific time slots, forcing competitors to reconsider their delivery methods. Many of those retailers have begun to implement new practices to design a more optimized approach for achieving speed and accuracy in last mile delivery. The organizations that have been successful are the ones that are repurposing their existing networks in innovative ways such as implementing “dark stores” that only hold stock for online orders, using stock rooms in retail stores as delivery points for online orders or picking stock ordered online from physical stores to ship to customers.
Although consumers today expect – and demand – quick delivery options, many retail companies don’t realize that speed alone is not the answer. Organizations that have adopted delivery strategies that emphasize accuracy over speed have gained a competitive edge, but face challenges when it comes to finding a feasible route to provide those precise deliveries that make sense for the types of products they sell.
New technologies, such as drones, promise to offer silver-bullet solutions for retailers’ accuracy challenges. However, these emerging technologies are still too new and could serve as distractions from design solutions that will work in the short-term. They also have their limitations in harsher climates with wind, snow, ice, rain, fog and extreme temperatures, so they currently do not offer a broad-based solution. Though drone delivery or delivery by a self-driving fleet will impact the supply chain industry down the line, companies now should focus on how they can transform their supply chains by implementing more creative strategies to highlight their existing assets. By doing so, organizations can improve the accuracy of their delivery options to meet consumers’ growing expectations and demands.