In 1865, French Department Store Le Bon Marché, which represented a revolution of its own in commerce, was already offering home delivery with the tagline: “Jusqu’où le cheval arrive” (“To where the horse arrives”). Operations were set by the resources they had, and it worked. Over the years, several manufacturing companies started offering their product directly to the end consumer. Just after WW1, La Redoute, a uniforms-maker, began selling balls of yarn directly to individuals. They advertised their new business with a 2x2cm advertisement in the newspaper. This was the beginning of direct selling, which also emerged in various countries throughout Europe in the same era.
It was only in the early 1960s, with the arrival of the first variable-word length decimal computer: IBM Big Blue 1401, that technology-enabled major changes. Innovative resources (catalogues) and processes helped redefine and consolidate this new value proposition.
In the early ’80s, it was the Minitel (a videotex online service accessible through telephone lines) that changed the processes in France. This permitted La Redoute, along with other resources, to offer delivery in 48 hours. It took 10 years for their competitor, Les 3 Suisses (Otto Group), to do better.
Delivery services were already the cornerstone of the proposal. The growing demand allowed for the apparition of new solutions, not only relying on the postal services but on different networks, like pick-up and drop-off ones (PUDO). Then in 1993, the internet was born!
Delivery has always been a crucial element, although delivery companies, after decades, still remain the ugly duckling of the acquisition process. The disconnection between online purchase and delivery hasn’t gone through major changes. Online tracking, as bad as it is, SMS alerts, are the battle horses for most carriers companies.
Initially, the need was just to deliver so retailers started relying on postal services. Then, with the advent of Amazon, the need for speedy delivery took form in customers’ minds. Retailers started to rely on more carriers to fill the gaps a single player could not cover.
Whilst it was becoming more mature, the market started to ask for convenience, meaning even more delivery options. The multi-carrier era was thus initiated to let customers choose among the offers the market has built.
Those carriers had several things in common:
- Solid operations that had relied on years of B2B service. The B2C world is somewhat bulletproof, but it hasn’t fully adapted to the requirements of the consumer, who has very different constraints. Whilst it became easier for retailers to implement more carriers (through integration platforms like Metapack), the value proposition of the carriers became more and more commoditized.
- The need to capture more volumes to sustain operations and justify lower prices created a dangerous precedent. More parcels don’t necessarily mean more margins. You cannot stretch your resources indefinitely. You still run up into the same issues with failed deliveries, customer calls to rearrange deliveries, etc… This becomes no longer scalable.
More worrying is that the model still doesn’t match the consumers’ expectations: low price is no longer enough to win and retain them. At the same time, retailers are also facing a challenge: product is becoming a commodity so their value proposition becomes their competitive advantage. Retailers sell a service and delivery is now an integral part of that, along with payment, guarantee, after-sale assistance and returns.
Whilst carriers are fighting to maintain the lead of a dead-end race, retailers need to find a solution to meet the growing requirements of their consumers.
Some retailers, due to the type of products they sell, and the lack of innovative last-mile offers, have anticipated this challenge: grocery, big and bulky for example. Not to mention the next big approach: the D2C – Direct to Consumers
Milkman Technologies is the solution for building a new delivery model, completely customer-oriented, bringing the solutions for a baffling problem that carriers can’t manage on their own, by:
- Offering a hyper-personalized model that meets the promise-to-delivery: when and where the customer wants
- Optimizing the operations, aligning them to commerce
- Answering the growing challenges of carbon footprint, traffic restrictions with a sustainable approach.
Technology is the last resource to redefine operations and build green logistics.
Technology is the last resource for the last mile.
Last mile is the new Retail.
by: Bruno Ceccaldi, Head of Channel Management
