COVID-19-Lockdown-Stay home-Physical distancing-Online shopping-Demand for delivery.
The above set of words sum up most of 2020.
OECD quoted in itsreportthat the growth is considerably fueled by new consumer segments (e.g.
the elderly), shift to non-luxury everyday necessities, product mix (e.g.
groceries) in addition to new firms switching to online.
Source:OECD
A business boom is often accompanied by bottlenecks in the system.
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Cost of deliveries needs to keep up with demand for same-day or even same-hour.
This structure is split into three major streams, viz.
technology, resources, and assets.
Technology includes shipment tracking, route navigation, communication.
Resources basically talk about delivery personnel and scheduling.
Assets here include fleet and (delivery) partner contracts.
Shared mobility could play a bigger role here.
For instance, both of them rely heavily on the end customer experience.
The term contactless has become a default expectation and both businesses have embraced this to gain competitive edge.
We split this comparison across 3 areas; customer experience, financials, and challenges.
- Customer experience
Both sectors widely rely on technology to deliver competitive customer experiences.
The retailer platform being the face of the business integrating delivery tracking and scheduling becomes vital.
The latter mostly operate in the gig economy space where the platforms only provide the technology.
Tech provides a great bridge between shared mobility and delivery services enabling seamless integration.
In short, delivery is all about a B2B2C relationship.
Prime cost drivers in the delivery models are operational i.e.
resources, assets (vehicles) and connectivity.
However, only one needs access to a pool of drivers as a resource.
In both cases its all about a more convenient, faster delivery of services.
Last-mile delivery operations are dictated by the ever-increasing consumer demand for shorter ETAs.
This places enormous pressure on moving goods efficiently through the city while managing costs.
Smaller businesses find navigating this constraint a little more challenging.
To leverage the cargo use cases, both sectors must see more creativity.
The last-mile space, however, is starting to witnessmassive interestsin this model.
Pre-COVID, such services the deliver anything Apps were seen as quite the nice-to-haves in a city.
Such solutions help businesses overcome difficulties in delivery operations.
Firstly, they take over the customer service piece.
Lastly, operational efficiencies are being improved upon by ways of outsourcing even the asset management piece.
This is where shared mobility has seen collaboration.
How could the last-mile delivery business evolve further?
What are the challenges?
The inevitable problems congestion and emissions.
It is obvious that with such phenomenal growth of ecommerce, traffic congestion would become a grave concern.
Why is that a business challenge?
And thisanalysis was releasedin January 2020!
The assets (vehicles) in the business could be used as-a-service too.
Delivery causes nearly 40% of a major citys pollution.
food deliveries) and having over capacity (e.g.
cars/vans) which impact cost per delivery/trip.
- Shared infrastructure
Assets do not just mean vehicles.
The infrastructure needs to be considered too.
Owning a fleet needs maintenance infrastructure or for instance, charging infrastructure in case of electric cargo vans.
Shared fleets would have shared infrastructure.
This has a great impact on creating a useful in-city infrastructure for public use too.
Shared mobility financials are focused on utilization rates and that drives efficiencies in operations.
How does an autonomous fit in?
The quickest, arguably less complicated, and thereby less opposed business model is that of freight.
The pandemic has, in some ways, made these even more mainstream as an expectation from end consumers.
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