On the other side of sales: Finding the balance between speedy service & sustainability

On the other side of sales: Finding the balance between speedy service & sustainability

Sanjay Datta and Chitra Vijayasarthy

It’s that time of the year that every retailer waits for, to turn ‘Black’ from ‘Red’! We’re referring to the move from the excitement of the Black Friday sales to the season of Holidays and Gifting.

No analytical model will be able to predict exactly how the holiday season will pan out this year. Albeit, a major driving force is likely to be how much retailers have been able to stock up on inventory, to serve their consumers. The risk appetite may be a factor affecting the whole number. The outcome of the sale will lay the path for the digital journey and investments for the near future.

If the recently concluded Singles Day, in China, is an indicator to what is in store this holiday season, then we are all in to witness some records tumbling. Analysts predicted a 33% growth in US online holiday season sale this year totalling $189B.

But along with sales, come the customer expectations for delivery which are such a crucial driving force of the supply chain & logistics industry, and that’s what we’ll be discussing in this blog.

Critical factors related to shipping – The same and next day delivery conundrum – Is it really here to stay?

We have all seen, and have come to expect, that the consumer perhaps wants his package as soon as possible and with absolutely no charges attached. There has been a lot of investments in supply chain and logistics to make this happen but is it that straightforward? Is there a small storm brewing? Should there be further investments at all in this capability, even though numbers indicate a substantial market and growth!

Some food for thought-

  • Sustainable retail is no more a slowly adapting philosophy. The entire world has pledged towards a greener planet and enterprises can no more ignore, especially since their customers are also invested in this cause. This is going to be a major driving force this decade for where organisations are investing, given the UN SDG and Paris agreements as the backbone of the environment goal. The massive supply chain and logistics involved only during the Thanksgiving and Black Friday can cause the following-
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The consumer doesn’t seem to appreciate the increased frequency of delivery vehicles around the locality for the multiple deliveries. The pandemic has just added to the increase in this volume. Traffic congestion, increased pollution and clogging of streets is a reality today. A perception about the brand is building up in the consumer’s mind as being non-eco-friendly.

The ever-increasing cost of shipping is putting online retailers in a fix as the consumer still expects free shipping as a given. Instead of having multiple people from a neighbourhood driving to the store, a single delivery to the homes seems a more logical, cost saving approach. But with increased online shopping, multiple single items getting delivered from remote locations doesn’t seem to add up to the individual visits saved and the cost economics. The underlying environment friendly theme is also not achieved.

Get this delivered by the next day, in two days or by date“. As of today, consumers are given a choice between shipping speeds defined by the retailer. Going forward consumers will be creating and dictating their own model how and when they would like their shipment delivered.

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While the immediate model of speed of delivery and free delivery is not going to phase away, over the period disruptive transformation on delivery phenomenon is something none can shy away from. The entire transformation will be powered by Data and Artificial intelligence being the central nervous system, providing intelligence, automation and modelling. In augmentation to that, this central nervous system will continuously read signals from consumer/ logistics partners/ global environment data, reacting to events and anticipate on what is next. Till then, keep a watch on that package of yours!

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