Feasibility of Same-day Delivery: How can it be Achieved?

Feasibility of Same-day Delivery: How can it be Achieved?

Imagine you have picked an item from your wish list and placed an online order at 11:00 a.m, and got the package in your hand by 6:00 p.m, and that too without having to pay any additional shipping cost!

If you are still fond of the most popular “home delivery” method, the good news is it’s not going away anytime soon, and the same-day home delivery will be available with an additional shipping charge. However, the underlying challenges in logistics are making retailers and logistics companies seek out a better option where the same day or next day delivery can seamlessly be done, but without adding up any cost both for retailers and customers. It may take some time to happen in India, though the balls are already rolling that way.

To keep up with the fast-growing demand in the B2C segment, retailers and logistics firms are focusing on convenient alternate delivery options including flexible delivery time, high delivery speed, and integration of parcel locker services. In the entire equation, “speed” is the most important determining factor, be it inventory management, product sorting, packaging, movement from warehouse to courier hub, and eventually to lockers. Simply put, the entire supply chain needs to be on its toes to make it happen. We would discuss more of this potentially path-breaking logistics concept in the next sections. Read on.

Where It all Began and What is the Current State of Same Day Delivery

The concept of same-day delivery originated way back in 1998 when the online retailer Kozmo.com (now dysfunctional) offered one-hour delivery in the local region. The company witnessed growth spike, but could not sustain it for long, and had to shut down the business in 2001 due to its sudden fall of venture capital. However, despite its failure, Kozmo triggered a new beginning and taking a cue from them the United States Postal Service’s Metro Post reintroduced same-day delivery. Subsequently, the Metro Post service provided logistics support to Amazon to offer same-day delivery by 2014 across 15 cities in the U.S.

Later, in September 2015, Amazon came up with guaranteed one-hour delivery via Amazon Prime. In addition, Walmart also started offering same-day delivery using a UPS service in 2013.

Recently, Amazon Prime has introduced same-day delivery in India to eligible addresses listed on the portal. Subscribed members get this shipping at a discounted price and non-members at a much higher price. This shipping concept is now forcing other major retailers to follow the footsteps, and help many smaller merchants team up with these retailers to offer same-day delivery to their customers.

In Germany, the DHL ran a pilot project in various cities including Berlin, Munich, Cologne, and others offering online and multi-channel retailers same-day delivery option. Customers could choose from two delivery windows — 6 to 8 p.m. and 8 to 10 p.m. The shipments were picked up, sorted, consolidated, and then transported from a single local hub with partly automated sorting. Such projects are likely to be common going forward to cover all the grounds before rolling out full-fledged same-day delivery.

What consumers want when it comes to delivery? Statistics reveal that only 13 percent of Gen Xers, nine percent Baby Boomers, and 56 percent millennials are ready to pay a premium price for same-day delivery. Considering the fact this type of delivery is still at an early stage, there will be a significant growth in the near-immediate delivery in the future.

Integrating Parcel Lockers with Same Day Delivery – Can be a Revolutionary Move!

The 2014 Same-Day Delivery report by Business Insider shows that by 2018, the value of merchandise in the U.S. through same-day delivery would be $4.03 billion. On top of it, by the same time, total annual shipping fees from same-day delivery would be $1.01 billion!
Even in India if the same-day delivery gets rolled out across the cities, you can select a parcel locker address instead of getting a package delivered to your home or office address. Currently, some leading parcel locker service providers including Smartbox are offering such service in Delhi/NCR and Bangalore.

The main challenge that comes in the way of same-day delivery is to carry out fast-track shipments within a day. To achieve this, retailers need to have their physical inventories, warehouses, and logistics ready in all the chosen cities to cut the shipping time, which usually takes 1-2 days due to intra-city movement. In the case of standard (3-4 days) or one-day delivery, often sellers are from a different city and an item first needs to be packed and shipped to a hub in the destination city. Sometimes an ordered item moves through 2-3 courier facilities, e.g., Gurgaon, Noida, and Delhi before reaching to the customer. However, for same-day delivery, the transit process has to be to cut to a minimum.

In the current scenario, introducing evening delivery seems more viable, and can lay the foundation for retailers to move into an anytime window in the future. Retailers and the associated logistics firms need to build on their existing infrastructure such as sorting hubs, vehicles, installing lockers, and IT to increase efficiency through capacity utilization.
Once the shipping time is curtailed and the entire shipping process is streamlined, parcel lockers can be integrated into the system. Lockers can actually make the process faster because instead of delivering to individual customers scattered all around a city courier personnel can deliver packages to the chosen lockers and that too in bulk. As soon as a parcel is delivered to a locker terminal, you’ll receive an e-mail notification and SMS to your cell phone with a one-time passcode (OTP). You just need to visit the locker terminal, enter your OTP, swipe your debit/credit card to make on-the-spot payment, and collect your package. There is usually a three-day time frame, and you can pick your parcel any time during that period. Currently, next day or two-day delivery is the industry standard in most countries, and now the next evolutionary step is using parcel lockers for affordable same-day delivery.

Last Few Words

Considering consumer preferences there will be an increasing focus on dynamic pricing as well as faster delivery and same-day delivery may prove to be a game changer. Integrating parcel lockers in your delivery process can ensure fast shipping and lower logistics cost. Want to know how? Just give us a call at +91-8882-760-760 or shoot an email to info@smartbox.in, and one of our experts will get back to you as soon as possible.

Smartbox

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