Making Waves: 5 Companies Changing the World of Logistics, Last Mile Delivery and E-Commerce FulfillmentGame changing technology focused companies are improving customer experience & on demand delivery
Issues involving the supply chain, last mile logistics and delivery are hot these days. Package delivery and parcel carriers combined with courier and delivery companies as well as other supply chain and logistics industry companies such as warehouse and storage companies have hired 35,000 in the past year.
Technology focused start-up companies have painted a target on last mile delivery. From freight forwarders to warehouse analytics platforms, delivery and logistics providers, over 350 supply chain management and logistics ventures are listed on AngelList, the online network of start-up ventures, investors and job seekers. The increase in supply chain and logistics start-up ventures coincides with changes in the supply chain due to omnichannel and e-commerce fulfillment needs.
Logistics industry businesses and associated technologies are building up to help mediate the tremendous challenges in the supply chain and logistics industries.
According to a 2016 study conducted by startup Freightos, 86% of logistics decision makers acknowledge that technology is the best way to increase efficiency and keep costs under control. Today, innovators are utilizing automation, mobile apps and Big Data to drive efficiency and cost savings across the supply chain. Consumer spending and online shopping are up and expected to continue to grow. Using Big Data and sophisticated analytics to analyze retail trends and online purchases provide critical insight to retailers and help improve retail technology. Innovative ideas and improvements in retail technology and last mile logistics are capturing the attention of the biggest online retailers.
Last mile delivery and logistics are areas of both special concern and opportunity. This reflected in the number of new business start-up ventures, most of which begin in the San Francisco area. Stand aside autonomous vehicles and drones. Fresh ideas for solving logistics and home delivery challenges are generating results and praise by consumers and online retailers. No longer are online retailers limited to dealing with the same carriers for package delivery. Parcel delivery can now be handled by many other innovative vendors servicing the online shopping industry. Is this the future of retail? Quite possibly.
Here is a quick look at some of the new businesses that have been breaking the mold to service mobile shopping and consumers’ love of fast home delivery.
This new start up business is an on-demand delivery third party logistics provider. Darkstore works by enabling e-commerce retail brands to store their inventory in major cities and provides on-demand and same day home delivery at lower prices.
Darkstore does this by using leftover space in storage facilities, malls, bodegas and other ancillary spaces. The e-commerce companies are not charged for inventory storage. Instead, a 3% per item fee is charged when the goods leave Darkstore with a minimum fee of $2 and a maximum of $20. Key to the success of Darkstore is selection of the brands positioned for optimal success in this business model: those that move enough product specifically in a set location and its partnership with on-demand home delivery services such as Deliv and traditional couriers.
This on-demand delivery fulfillment venture enables e-commerce retailers to facilitate same day delivery and ensures tracking of inventory, orders and deliveries.
Darkstore targets customers of direct to consumer e-commerce brands which do not have local brick and mortar stores.
Darkstore is currently building plugins for e-commerce platforms including Shopify, BitCommerce and Magento. This service enables online retailers to compete more effectively with top retailer Amazon and meet the same consumer brand promise of “what you want, when you want it”. Because Amazon requires access to inventory and sales data and gives less screen space to brands sold on its platform, it often is undesirable for e-commerce retailers to use it for their retail and delivery needs.
Currently Darkstore has locations in Phoenix and San Francisco and will be opening in New York and Los Angeles in October. Mattress company Tuft and Needle, clothing company Wildfang and premium headphones maker Master & Dynamic are Darkstore clients.
What is the answer to companies that need help with same day deliveries and returns for omnichannel retailers as well as e-commerce companies and local businesses?
Deliv handles the pick-up and delivery from small to enterprise level brick and mortar stores and handles same day delivery. By integrating Deliv into a retailer’s existing check out process, retailers can maintain the ownership of data from each customer transaction and ensure a seamless brand and customer experience. Services such as end-to-end logistics, line haul services, custom delivery windows, and last mile delivery package tracking are available. In addition, Deliv provides the added benefit of minimal packaging, ideal for meal subscription services including cold chain items and food products.
Currently Deliv provides service to over 4,000 retailers and businesses, notably Macy’s, Best Buy, Bloomingdale and Google Express. Eighteen markets in the United States are available for same day delivery service. In March 2017, Sam’s Club launched a pilot of Deliv that involves delivery of grocery and general merchandise for business members in Miami. Sam’s Club personal shoppers prepare orders and delivery is accomplished the same day for business members. So far, the pilot has received high marks from the members who have tried the service.
With a network of over 200 parcel, LTL and truckload carriers, ShipHawk is a transportation management technology platform and software solutions provider that helps companies that are in need of specialized carriers including those that handle home delivery and blanket wrap options. ShipHawk is ideal for finding logistics and home delivery solution providers that handle large, cumbersome items that do not fit into a box. The system can provide instantaneous pricing comparison, optimized delivery options and packaging solutions to help to minimize costs, provide a more personalized customer experience and enhance sales.
An API provides a seamless integration with real time intelligence to enable users to obtain pricing comparisons for shipping costs of items in their shopping cart. Online retailer tools include consolidated data, customer-facing order tracking and insight into shipping types. ShipHawk generates the needed shipping documentation including labels, Bill of Lading and commercial invoices and helps retailers “own the post-purchase brand experience”.
ShipHawk automates back-end processes including rating, booking, dispatch, last mile delivery tracking and reconciliation and empowers retailers to gain insight by providing key data for evaluation and management. Consumers have reported that their experience with product delivery strongly influences their impression of brands. Using ShipHawk helps retailers shape the customer experience without sacrificing their ability to reduce cost. As shipping costs are the second largest cost of doing business after cost of goods, having a solution that provides greater control enables retailers to compete more effectively for consumer business.
With an array of platform options, solutions and plug-ins, ShipHawk provides an opportunity for online retailers to have increased control and visibility as well as an ability to impact consumers at a critical time in their online shopping journey.
Over the years, retailers have realized that the experience customers have with their brands shapes their future buying decisions. Online retailers have become more acutely aware of the value of this experience and are interested in finding new ways to exert control over their brand at different points in the consumer-retailer interaction.
As consumers buy more online, retailers seek to exert influence at different points in the transaction. Filling the “experience gap”, the time during which the online check out occurs until the point at which the product arrives, has become a priority for many retailers. They want to facilitate a positive experience during this period of anxious anticipation and use the enthusiasm to develop and deepen the relationship with their customers.
Consumers expect a seamless shopping experience, at all points of their online shopping journey, regardless of the mobile shopping or other medium they use. Consumers enjoy and value personalized shopping experiences throughout their entire interaction with brands, including the period during which they await the delivery of their order. Focusing on the post-purchase experience is the one of the newest engagements for online retailers.
Enter Narvar. Narvar helps retailers maximize the post-purchase experience with online retailers. By providing integration with major carriers for automatic selection, sending branded automated last mile delivery tracking updates to consumers and handling returns, Narvar helps facilitate a seamless brand experience between online retailers and their customers.
Currently Narvar services retailers such as Nordstrom, Crate & Barrel, The Home Depot, Gap, Levi’s, Neiman Marcus, Sephora and Bass Pro Shops. This helps retailers continue the conversation instead of trusting third party sites to handle this critical element of consumer communication.
A study by Accenture revealed that a majority of consumers in both the U.S. and the U.K. were willing to have trusted retailers utilize personal data to provide them with personalized updates and information on products, services, offers and recommendations. 86% of the 2000 respondents indicated concern about their data being tracked yet 49% stated that they would trust retailers with this information in order to provide them with a personalized shopping experience.
Narvar assists retailers by assimilating expertise in engineering, supply chain and logistics, customer service, interactive design and other elements to optimize the customer experience.
It utilizes predictive analytics about location, routing, weather, seasonality and other data to provide retailers with a precise estimate of delivery times in order to maximize control over delivery. By developing stronger relationships with shoppers, retailers hope to inspire customer loyalty and generate additional online purchases.
The mission of Postmates, an on-demand delivery service provider is to enable any type of merchant to deliver anything at scale using local on-demand logistics. Postmates has a large delivery fleet, over 20,000 of on-demand operators in 40 American metropolitan markets. Partnerships with well-known brands such as 7-Eleven, Walgreens, Starbucks, Chipotle and Apple have provided Postmates with access to a tremendous customer base. Despite initial naysayers, Postmates is thriving.
Founded five years ago, Postmates is “a logistics company for the mobile age”. By incorporating Smartphones, mobile technology and courier and delivery professionals, Postmates has been able to deliver a positive experience for consumers by relying on 25,000 couriers to make 1.3 million deliveries a month in 40 cities. The concept has been successful in connecting the mobile economy with traditional brick and mortar commerce and provides a mobile app for convenient use.
Since its inception, Postmates has expanded by offering different levels of service. Postmates now offers Unlimited, an Amazon-Prime similar subscription service for $9.99 monthly. This provides as many deliveries as desired from Postmates Plus merchants as long as each order exceeds $30. In addition, Postmates includes a Plus feature, a flat $3.99 delivery fee for preferred merchants. To become a preferred merchant, the company must agree to cover a portion of the delivery fee in exchange for prominent screen advertising placement on a mobile app.
Since introducing Plus Unlimited, Postmates revealed that its average Unlimited customers order approximately 9 times more than average customers and purchases are 30% higher than those of average sales.
Postmates offers the opportunity to partner to power local deliveries and currently handles over 1 million deliveries per month from local businesses.
Innovation comes in many forms and locations. What do these companies have in common besides creative solutions to the challenges of online retailers and the need to improve last mile delivery options and the customer experience?
People. Persistence. A passion to succeed.
All of these companies rely on technology to help solve problems and create opportunity. Whether it is a platform, software solutions, a collaborative approach or means of providing information, engagement and a higher level or service, these companies are trailblazers. They have observed, studied, learned, innovated and engaged with others to find a better way of satisfying consumer demands and expectations.
Today, consumers are ruling the world. No doubt about it. It is a “sink or swim” world out there and these companies are making waves, shoving aside traditional business models and showing others in the supply chain and logistics industry how to help online retailers succeed with consumers every minute of every day.
These days, it is not enough to simply use social media, have a website and participate in ecommerce sales, digital retailing is much trickier than that. According to Forrester Research Inc., online sales as a percentage of retail sales are projected to continue to grow over the next five years. The future of retail has certainly been changed with the advent of mobile shopping. Traditional retailers are now more focused than ever before on the online shopping experience. Omnichannel retailers, focused on developing personalized relationships designed for direct-to- consumers interaction are succeeding, some with the help of the game changers in this article.
We invite you to read more about other innovators in the supply chain and logistics industry in our previous blogs:
Making Waves: 5 Companies Changing the World of Logistics, Last Mile Delivery and E-Commerce Fulfillment
- Darkstore: last mile delivery/on demand fulfillment and delivery
- Deliv: last mile delivery
- ShipHawk: transportation management platform
- Narvar: CX for omnichannel retail
- Postmates: last mile delivery/on demand delivery
- Transfix: transportation and logistics
- KeepTruckin ELD: transportation and logistics
- Elementum: supply chain network management
- Shippo: freight and shipping management
- Doorman: last mile logistics/last mile delivery
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