Express Delivery is Disrupting Traditional Retail
Giuseppe Stigliano
3x CEO | Keynote Speaker | Marketing Professor | Author | Business Advisor
I've spent the Christmas Holidays at my parent's house, tasting genuine food and very good wine. Actually too much of both!
For this reason, after a few days I've realised I needed to burn some calories to make sure I could still wear my favourite shirts once back home. The problem was I didn't bring the right equipment to go running, apart from the shoes.
At that point I had two choices:
a) buy some random cloths at a local store;
b) buy exactly what I wanted on Amazon and have it shipped in 24/48 hours.
I opted for the second and realised how immediacy is not a competitive advantage of physical stores anymore. High-speed delivery is definitely a strong weapon to overcome one of the last barriers to buying from an on line store. We are getting to a point where even impulse purchases will move from physical to online.
So let's see some of the major business and technology forces at play in this revolution:
Showrooming/Webrooming: the practice of checking products in a traditional off line setting and then go online to make the purchase, and viceversa.
Click and Collect: self-delivery if gaining traction, especially in Europe. For many people it's the most efficient way to shop for convenience goods because you don't have to care about third party delivery windows.
Mobile Stores: physical retailers like Whole Foods are considering the idea of going where they prospective clients are (e.g. parking lots of big companies, schools, churches etc.).
Autonomous Delivery Vehicles: there is a plethora of emerging technologies aimed at getting the most out of the last mile (small cars, robots, drones, etc). Amazon, Domino's Pizza, Google, UPS they all have development programs in this area.
Peer to Peer Delivery Networks: just think of UberFRESH (lunch delivery) and Uber Corner Store (on-demand delivery of convenience store staples). And consider that many start-ups are springing up all over the world.
Governments and Municipalities: if megacities are the future, then we definitely need more efficient delivery infrastructures. In japan a dedicated train to deliver goods is being tested as a way to remove trucks from surface routes in major cities. Subway trains to remove waste will likely follow.
Overall we should not forget to mention Artificial Intelligence. Algorithms are at work to make inventory management, fleet management, route management, and truck packing way more efficient than today (See how UPS is dealing with this issue in this interesting article).
By the way, thanks to Amazon Prime, while writing this post I'm still wearing one of my favourite shirts ;)
Source: a very valuable source for this post has been The Second Era of Digital Retail edited by David Roth.
Strategy Director @ AKQA
8 年Very interesting point of view, especially if you notice that is actually a "physical" service (delivery) that is disrupting a "physical" touchpoint (traditional retail). Naturally, we all know that we have to be grateful to digital for how it pushed delivery to become faster and faster in the last few years... However, what is catching me up after reading your piece, is the great challenge we have to face in reaching out people with the right message in the right context for exploiting impulse purchases on digital touchpoints, too. That is exactly what traditional retailers have been doing for years within their stores. Now we have to disrupt this approach, allowing it to be valuable even when people are online, and not only when they're in a supermarket. Call it ZMOT, contextual adv, predictive adv, RTB, ... we're always talking about the same issue: being relevant for every single person who needs us in that moment, or in that context; even if that person doesn't know it yet, after all. So, what if time is now unpredictable? And what if context becomes actually the device that a person is using? Media strategies (and creativities) will have to change once again; but following what? How can you choose the right moment or context? Data may be the answer, no?
Senior Art Director at AKQA
8 年As always an interesting food for thought. Indeed brands in the form of retailers are pushing forward to offer shopping experiences more and more sophisticated. Sometimes experimental, but definitely looking towards the future purchasing experience as the agreement between Toyota and amazon for the limited edition of the Aygo (https://www.wired.it/gadget/motori/2015/11/17/toyota-aygo-amazon-edition-online/). The brands, more and more closer to their potential customers, are gnawing the edge of consumers’emotive sphere. What will be the future relationship between the desire to own a product and the access to the function that the product meets? Will be able the brand to keep up the aura of their products if the time frame between desiring and having is reduced ? Time is precious, and the big retailers know the weight of that in their distribution systems, but this is an element which the consumers does not perceive and do not care. For the brands the risk in this case is that their products become commodities, unable to make the difference between one brand and another. The brands are part of a very interesting challenge: how to raise awareness of the time preciosity without reducing the effect of desirability?
Associate Director at OMD MENA - Dubai
8 年I definitely agree!
Founding Partner | Ceo at DINN! // ideate brand’s spaces designed to transform customer and employee experiences.
8 年You're right, but I'd like to move ahead. How to design or redesign an innovative Retail Network today? If I have a thousand of stores, designed before the digital world, what I have to do? (thinking about banking sector or telecommunication one) If I'm a newer and I'm approaching the market, how I have to design my retail revolution network? (thinking about start upper) Well in both case I do believe the answer is the innovation based on Service design approach in a Omnichannel way, where all touchpoint are integrated in all customer engagement phases and technology is a driver for implementation. First write done the positioning, then the service promise combined with the brand identity and integrate it with all the touchpoints. In term of design process, well, we have to really start design from a People point of view to draw up a simple and comfortable customer experience. Wrong case? What Tim is doing now. Please look at the new positioning declared (the future signed by telecom), then have a look at the digital world TP and then at the latest Physical store in Cordusio square. Right case? https://www.sneakingduck.com/tryathome Cheers