Retailer’s Guide To Crafting Superior Experiences Through Digital Delivery Models

While different retailers are on different maturity levels regarding their supply chain and logistics operations, it’s time we spoke about how 6 rapidly emerging trends are shaping the modern retail industry and how it’s going to impact retailers.

Retailer's Guide To Crafting Superior Experiences Through Digital Delivery Models
Retailer’s Guide To Crafting Superior Experiences Through Digital Delivery Models

With a rather unexpectedly disruptive 2020 coming to a close (finally!), it has completely changed the face of retail.

The only thing that has remained unchanged and, if anything, has further increased is customer expectations. Market leaders such as Walmart, Amway, and 7-Eleven have embarked on digital delivery models to manage their retail supply chains & meet customer expectations.

This article touches upon key aspects of new digital delivery models in retail, which include:

  • Expediting the retail digital transformation process
  • Achieving zero-distance supply chains
  • Achieving fulfillment agility
  • Building a disruption-resilient supply chain
  • Achieving sustainability goals
  • Achieving advanced contactless deliveries

Table of contents

From Time Teller To Clock Builder
Zero Distance With Digital Supply Chains
Agility in Fulfillment
Focusing on Building A Resilient Supply Chain
Environmental Sustainability
Contactless Deliveries

The retail industry is at crossroads now. Some excel in delivering superior customer experiences by embracing digital tools, and some are experimenting with disruptive technologies. Then there are those waiting to see the ROI of investments in modern technologies. With customer experience becoming an integral part of product purchasing decisions, retailers need to achieve the twin objective of ensuring profitability and customer loyalty. They need to do it fast to stay relevant. To get a clear perspective of the retail industry’s state, we divided retailers into two broad buckets—The Trailblazers and The Explorers.

The Trailblazers

These are those enterprises that lead by example. They have understood the true potential of leveraging digital tools and are now seeing ROI in the guise of increased supply chain efficiency, faster deliveries, happy customers, reduced operational expenses, and better margins.

The Explorers

These are those retailers who have a fair idea about the benefits of digitalizing core supply chain and logistics operations but are still chalking out plans and evaluating strategies to implement disruptive technologies.

Reality Check What Retailers Really Need

While different retailers are on different maturity levels regarding their supply chain and logistics operations, it’s time we spoke about how 6 rapidly emerging trends are shaping the modern retail industry and how it’s going to impact retailers.

From Time Teller To Clock Builder

The balance of power is shifting fast. Today, customers decide when, where, and how they want to shop. Customers want their orders to be delivered within hours and pay for the same through digital wallets with no physical contact. Retailers who have built their businesses focusing on constantly generating innovative approaches to woo customers will be the ones winning both in the last mile and in the long run. For instance, Clock Builders will never stick with one accomplishment. Once they achieve the objective of delivering fast, they will ensure higher delivery transparency; once that is achieved, they will work on ETA accuracy and so on. Hence, going ahead, we will witness retailers creating new benchmarks in delivery standards to beat the competition.

How does this trend impact the two types of retailers:

The Trailblazers

Trailblazers are the ones who are driving this trend. The likes of Amazon, Walmart, Target, Home Depot, among others, are constantly challenging existing delivery standards and making way for further improvements.

The Explorers

This trend will be a wake-up call for the Explorers. It will have a positive impact on them in the sense that it will drive them to expedite their digital transformation processes.

  • 79% Of companies with high-performing supply chains achieve revenue growth greater than the average within their industries
  • 50% Increase in supply chain agility, improved demand forecasting, and better stakeholder collaboration can be gained by deploying innovative technologies

Zero Distance With Digital Supply Chains

Linear supply chains have inherent limitations in minimizing operational latency and responding to changing business and customer demands in real-time. This trend emerges out of this challenge and the growing popularity of direct-to-consumer models. Retailers will need to orchestrate their supply chains so that customer needs are met through the channel they want when they want, and at the price they want. In other words, it means creating supply chains that are at zero distance from customers and always available to them. Embracing technologies like AI, ML, and IoT will be keys to riding this trend and understanding preferred channels, demand patterns, and buying behaviors.

How does this trend impact the two types of retailers:

The Trailblazers

Over the years, with the right implementation of digital tools, the Trailblazers have gotten closer to the customers. For instance, the Amazons and Walmarts of the world now know what inventory to stock up during specific holiday seasons. But can their supply chains respond to unprecedented events, like the COVID-19 pandemic? The answer is ‘no.’ Hence, there is still an abundance of scope for improvement.

The Explorers

This trend is not good news for the Explorers. Without having intelligent digital transformation strategies in place, it will be extremely challenging to create supply chains that are capable of responding to swiftly changing customer needs and buying channels.

  • 71% of Customers expect to view in-store inventory online, while 50% expect to buy online and pick up in-store
  • 30% Of supply chain leaders say responding to customer mandates for faster, more accurate, and unique fulfillment is their top business priority

Agility in Fulfillment

Traditional macro hub and spoke models would ultimately fail to deliver on same-day delivery expectations. Retailers need to bring inventory closer to their customers. A smart approach towards building a highly responsive supply chain and logistics operations would be developing urban distribution centers and dark stores and then leveraging the gig economy to crowdsource delivery services. This not only shrinks delivery times but also empowers retailers to scale delivery operations efficiently.

How does this trend impact the two types of retailers:

The Trailblazers

They are spearheading this trend. Trailblazers quickly understood that to deliver on same-day delivery expectations, they need to bring inventory closer, especially in urban areas where expectations are rapidly growing. But just bringing inventory close doesn’t serve the entire purpose. Trailblazers are now experimenting with modern delivery crowdsourcing tools to complement their urban fulfillment centers.

The Explorers

They understand the need to bring inventory closer to the customer. Still, their lack of willingness to optimize the performance of fulfillment centers with digital tools poses serious challenges regarding delivering same-day delivery experiences.

  • 64% of Online consumers expect orders placed by 5 p.m. to qualify for next day delivery
  • $200 Billion In US online sales will be driven by ‘same-day delivery’ demands, that’s about 25% of the US e-commerce market by 2025

Focusing on Building A Resilient Supply Chain

The COVID-19 pandemic taught retailers, like never before, the importance of having a resilient supply chain and the significance of ‘risks’ associated with delivery operations. Savvy retailers are now focusing on key delivery elements like flexibility, scalability, inventory availability, automation, and compliance to build resilient supply chains.

How does this trend impact the two types of retailers:

The Trailblazers

Although their supply chains were not resilient enough, the Trailblazers quickly responded to the unprecedented crisis. Credit goes to their investments in digital supply chain tools that empowered them to respond to skyrocketing home delivery demands and navigate deliveries during lockdowns. This trend will only see savvy enterprises embracing modern delivery platforms to be prepared for any such global catastrophe.

The Explorers

A large number of retailers in this category were already struggling to deliver on evolving customer expectations. The pandemic made it worse for them, especially when responding to increasing home delivery demands. As a move towards building resilient supply chains, the Explorers will create a strong presence in the digital space.

  • 22 Billion Were the visits of retail websites in June 2020, up from 16.07 billion global visits in January 2020
  • 10+ Days Delays in getting goods to port as trucks operated at 50% capacity during the onset of the COVID-19 pandemic

Environmental Sustainability

Transportation is the second biggest contributor to rising levels of greenhouse gas (GHG). Among all GHG, CO2 is the most dangerous and prevalent one and its levels today are higher than ever, primarily because we have released them into the air by burning fossil fuels. Compliance and government regulations have been pressurizing businesses to reduce their CO2 footprint while executing logistics operations. But it will be a whole new game and logistics urgency when the need for eco-friendly deliveries will be driven by customers. Already retail customers are voicing their concerns regarding the same.

How does this trend impact the two types of retailers:

The Trailblazers

This category of retailers will be in a tight spot with regards to this trend. On one side, they will need to keep increasing the number of deliveries per day to drive same-day deliveries and, at the same time, reduce the miles traveled per day to shrink the carbon footprint. This will drive them to onboard logistics platforms that optimize route planning and increases first-attempt delivery success rates.

The Explorers

Eco-friendly delivery is an untapped territory; the Explorers will definitely find it lucrative to be the early birds in this segment.

  • 71% of Consumers are in favor of their delivery to be carbon-neutral
  • 12 Pounds of CO2/day can be slashed by optimizing delivery routes

Contactless Deliveries

The COVID-19 pandemic has made social distancing a significant part of our lives. Retailers must integrate processes in their last-mile delivery operations that drive seamless contactless deliveries. There are three aspects to a contactless delivery. First, a delivery executive leaves the parcel at the doorstep and sends the picture to the customer to inform them that the delivery is done. Second, customers get to know the latest body temperature of the delivery executive via a mobile app, and third, the customer pays via secured digital gateways to eliminate cash or card-based transactions.

How does this trend impact the two types of retailers:

The Trailblazers

This retail is spearheading this trend and is constantly chalking out innovative ways to comply with COVID-19 regulations. Hence, it’s empowering them to boost customer loyalty and make the most out of rapidly growing home delivery opportunities.

The Explorers

These retailers are aware of the need to ensure contactless deliveries. They are even doing it. But IT-infrastructure limitations are becoming major roadblocks when integrating real-time information on the health of delivery executives and executing seamless financial transactions through digital payment gateways.

Savvy retailers leverage modern supply chain and logistics tools to be on top of these trends and drive high levels of resiliency, productivity, customer satisfaction, and cost optimization. To know how you can achieve the same, quickly sign up for a FarEye demo below.

  • 37% of US customers used contactless delivery more than usual in May 2020
  • 102 Out of top 500 retailers have already added curbside pickups between January and August 2020 to drive contactless deliveries

Source: FarEye

Published by Silvia Emma

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