Partner Perspective: The future of delivery

James Gagliardi , vice president of solutions innovation at Digital River , anticipates a world of ship-from-and-pick-up-anywhere retail

THE EXTRAORDINARY DELIVERY service that many retailers now offer would have been unthinkable just a few short years ago. Customers expect that retailers will deliver products for free and within just two short days. In reality, achieving all this is expensive. Just think about all the people who had to touch the product and all of the transportation costs that are involved in getting the product to the doorstep – yet most customers resent paying for delivery.

It’s not surprising that retailers, technology businesses and logistics partners are becoming very inventive as they look to reduce the cost of delivery. They’re thinking hard about what it means to ship from anywhere, to anywhere, and finding efficient ways to achieve that.

Manufacturers, retailers and logistics providers are working out economic ways of shipping across borders. Branded manufacturers are enabling customers to order direct from them, and then have their order fulfilled via a local retailer that already has the item in stock. After all, what retailers and manufacturers both want is getting products into the hands of consumers and having the ability to ship from the closest location.

By the same token, we expect to see last-mile delivery get even closer and more convenient for the shoppers as Uber-style couriers start to deliver right to the spot where consumers are – a same-day delivery service that consumers would be willing to pay for. It’s a democratisation of delivery that makes such services more affordable than the pricey couriers of just a few years ago. With the growth and proliferation of the ‘Internet of Things’, Volvo demonstrated the potential of connected cars to become a delivery drop-off and pick-up point. This initiative is an example of a win-win scenario that’s convenient for consumers and cost-effective for delivery services that can avoid first-time delivery failures and re-delivery costs. Bottom line: customers want flexibility in where and how their product gets delivered, just as they want flexibility in how they can pick it up.

Another notable trend sees customers willing to pick up packages from nearby, central locations – think grocery stores and post offices – that may be on the way home for consumers. To achieve this kind of flexibility, retailers need to solve other challenges. Having a unified view of your product inventory, regardless of where it is, is the only way these services can work. Then, there’s the need to solve the attribution question, by working out who gets credit for the sale and the delivery, and how funds are distributed between all the parties. On the converse, returns and refunds also present a problem. This is one area that I think is still being worked out.

Although there’s still a lot to be figured out in making multichannel logistics work, smart companies will seize the tremendous opportunity at hand to ensure that they are among the winners in this 21st-century race to deliver.

Click here for a free subscription to Top500 publications, including the current issue in pdf and future reports in print, or use the links on the side to navigate through this issue.