How retailers can achieve sustainable unit economics in the eCommerce era

Last mile delivery is the current battleground for retail success. As eCommerce continues to transform the way retailers engage with their customers, it is a key tactic for differentiation in a crowded and volatile market.??

The unit economics of last mile delivery are ripe for optimization with intelligent technology, presenting an opportunity for retailers across APAC to drive cost efficiencies and enhance sustainability outcomes, all while streamlining operations to get customers what they want, when they want it.??

Statista reports that ‘Asia-Pacific’s eCommerce market has grown significantly since it emerged as a global, dominant force, with multiple markets generating highest e-commerce revenues worldwide’. Meanwhile, The Economic Times highlights the growing significance of last mile emissions in the region as they make up at least half of all emissions from eCommerce deliveries.??

Taking these trends in mind, the region’s industry is at a critical junction, as it attempts to cater to increasingly digital consumers, increasing output at the same time as cutting emissions to meet sustainability targets. And it has become clear that streamlining last mile delivery is key to being able to rise to increasing challenges.??

Retailers in APAC, then, need to better leverage technology to empower enhanced unit economics, building a strategic and granular approach to improving the efficiency and sustainability of last mile operations.??

The first step to last mile success

Retailers can begin to transform last mile operations and improve unit economics implementing advanced technology. Leveraging solutions such as voice automation, RFID readers, handheld computers for retail workers and automation, retailers can enable better unit economics by collating and delivering shipments in a single delivery run/route – this helps in reducing waste in terms of packaging but also reduces the carbon footprint of last mile delivery.?

The visibility provided by these technologies enables greater safety and predictability of orders and less risk of shipments going missing. It also allows for contactless deliveries, which are becoming increasingly popular, and contributes to superior customer convenience and services as consumers become more demanding of eCommerce services – speed, accuracy and quality of shipments are more imperative than ever.?

Innovative technology can further help retailers in the implementation of collection or aggregation points like Micro/Urban Fulfillment Centers? Dark Stores, Last Mile Delivery Hubs or Hyperlocal Outlets for pickup and returns. This further reduces the costs and offers self-pickup options to customers to use at their convenience.??

In this, retailers can make technology work to their advantage in keeping up with online giants of eCommerce, overcoming supply chain challenges to deliver continuous innovation which delights consumers.?

Where sustainability is concerned, leveraging all these solutions will enable retailers to reduce emissions in several ways. Some aspects of eCommerce which typically contribute to rising carbon footprint include packaging, the use of energy intensive devices, the need for faster delivery times and therefore multiple run routes and impulse buying by consumers, which drives up the number of shipments required.??

Thankfully, the above-mentioned technologies can either offset or eliminate many of these sources of higher emissions. Collating orders into single delivery runs will, as stated, reduce the amount of packaging required and the number of trips required of delivery vehicles. Robust, multi-use and long-life devices for retail workflows, such as RFID, Voice Guided Work and Enterprise-grade Mobility handsets, can reduce energy use and eliminate landfill by extending device lifecycle against commercial-grade models.?

Empowering the future of retail with sustainable unit economics?

In today’s retail environment, building and enhancing these capabilities will be key to making operations as environmentally and economically sustainable as possible, all while ensuring that retailers can meet the demands set by modern, digitally native consumers.??

While retailers have already achieved explosive growth in ecommerce and online grocery over the past two years, that doesn’t mean they can settle with current processes and technology. They need to keep up momentum and innovation, especially as online retail giants continue to challenge them and threaten market share. At the same time, improving the sustainability of operations is critical as scrutiny intensifies over the role of business in climate change.??

By leveraging technology for deep strategic insights and more efficient unit economics, retailers can build a cutting-edge, future ready form of eCommerce operations.??

Honeywell is a trusted partner with proven expertise to drive efficiencies and cost-savings for retailers across the Middle East and Africa, future-proofing their workflows across the entire supply chain. As a Fortune 100 company with over 50 years of retail experience and 100+ years of developing pioneering technology, Honeywell is renowned for solving retailers’ business-critical challenges. To begin shaping your retail future, today, get in touch.?