GUEST OPINION Could apps solve logistics last leg conundrum?
Juan Pablo Luchetti, Consultancy Director at mobile consultancy and app developer Mubaloo argues the case for logistics firms to integrate with retailers to solve the delivery issue.
According to the Global WebIndex Q4 2014 report, the UK leads the world with e-commerce, with 64% of the national population having purchased a product online in the past month. This will come as no surprise, following the recent issues logistics companies ran into over the Christmas period. As discussed in the recent interview with Yodel, demand for deliveries was up 40% in December 2014, compared with December 2013.
Much of the problem in today’s world is that consumers expect deliveries to be smarter and for the problems of the past, where someone would have to wait inside all day, to be gone. The reality is often far from that. This has the knock on effect of irritating customers; leading to increasing customer service costs for online retailers, having to provide product refunds or offering goodwill gestures for future orders - all at a cost to the retailer.
Even if the problems only affect a relatively small number of overall customers, it is the reputation of the retailer that is at stake, as that it where customers level the responsibility.
Innovation is clearly key to helping to solve many of the current challenges.
Whilst much of mobile technology used today results from advances made in the logistics industry, it is evident that as demand for deliveries has increased, logistics firms are struggling to keep up. Many logistics firms have made large investments in mobilising their operations, though it is often at the consumer end that problems arise.
Many of the issues that arise at peak delivery times come when people aren’t aware of the time packages are due for delivery. Being more mobile is often the problem, with consumers not needing to spend as much time at home. Failed deliveries impacts the wider chain and adds extra costs when attempting a repeat delivery, or risking packages being left in insecure places.
Whilst firms like DPD offer premium delivery options, that alert customers via SMS of when packages are due, this doesn’t apply to all delivery firms.
With the vast majority of delivery firms now providing mobile devices to drivers that help them log signatures and log job information, the devices aren’t always used to maximum effect to enhance the end-to-end service.
What’s needed is for logistics firms to better integrate with retailers systems to provide customers with more information, or options for deliveries.
With smartphone penetration in the UK at 79% of the population, more can be done to utilise the app presence that many retailers have to create a smarter delivery system. By feeding information about estimated delivery times and joining that up with many of the backend systems that logistics companies use, customers can be more in control.
A successful supply chain management and logistics system should track information in real-time, with complete visibility across all aspects of the business and jobs roles, including warehouse operatives and drivers, through to the customers.
Data should be tracked and relayed back to analysts and customer service operatives in real-time.
There are many apps that give clues to logistics firms for how to help customers by utilising data. One example is Google Now that takes data from multiple sources, such as a users calendar, Google searches and third party sources to provide users with alerts that are relevant to them, such as when to leave for a flight, based on current travel conditions. Dark Sky is another app that uses data to great effect. The app utilises data collated via weather beacons and thousands of smartphones, that feature barometers and other sensors, to give highly accurate weather information.
Many firms are also using systems which make use of integrated sensors and GPS for real-time automated vehicle locating. This helps dispatchers keep tabs on the delivery vehicle and assets by providing real-time traffic information for drivers and enables geo-fencing to confirm an appointment, if a delivery vehicle moves within a certain mileage of a customer.
By feeding this information through the system, from end-to-end, it would be possible to help to avoid situations where customers either have to spend all day at the location they are expecting a delivery, or miss the delivery.
Firms like Parcelforce Worldwide have recently made strides into this space, by launching Parcelforce Select. This service offers greater communication with customers and options for delivery that could help to reduce the number of failed deliveries.
A Smarter Industry
As the online retail industry has exploded further in recent years, delivery companies and online retailers have sought to introduce new ways for consumers to get their products. Initiatives include eBay’s option for customers to pick up deliveries from Argos retail stores, Amazon customers to use select post offices and other retailers to use Doddle or Collect+ destinations have all marked additional options for consumers.
By implementing systems that can integrate with retailers ordering systems, driven via apps or SMS, delivery firms can close the gap that can exist with getting products to customers with minimal disruption or problems. Having greater awareness of a more precise delivery time or options that allow customers to delay or provide other instructions at the point of delivery, could help to improve the endpoint experience.
Technology has always been used to create competitive advantages in the logistics industry. Whilst, largely speaking, the infrastructure within sorting offices and with handheld technology for drivers has been dramatically improved in recent years, there is still room for improvements.
Last year, Dave Barnes, UPS’s Chief Information Officer, explained in a statement analysing the adoption of smartphones in logistics: “Being competitive means staying connected anytime, anywhere. Mobile technology has created a virtual logistics landscape where people and products move without limits - around warehouses, facilities, networks and the World - transforming customer relationships and business operations.”
Ultimately, it comes down to the logistics industry working closer with its retail partners to improve the last leg of the experience. Online retailing took off because for many, it was more convenient to order items and have them delivered. If that final part of the order, the delivery, fails or becomes an issue, people may be inclined to go back to the high street.
Apps are storefronts which are in the pockets of millions of consumers. Making greater use of apps to connect the final step could herald great improvements to the customer experience. Delivery firms who seek to keep ahead in this space can form greater relationships with retailers, potentially leading to cost savings for overall operations. Connecting that experience appears to be what’s required.