“There is a revolution happening,” Duncan Brett, the CEO of crowdsourced delivery company Sherpa, said in a keynote presentation at Retail Global on the Gold Coast on Tuesday.
The e-commerce boom driven by Covid-19 in 2020 has also led to increased demand for same-day delivery.
According to Sherpa’s data, over half of consumers say a same-day delivery offer makes them more willing to shop online, and over 60 per cent are willing to pay more for it.
“We’ve seen areas around Australia — Newcastle is a good example, Geelong is a good example, the Sunshine Coast is a good example — where same-day has just started to boom from a really low base,” Brett said.
Last year, Sherpa facilitated same-day delivery for over 3,500 retailers in Australia, including Apple, Woolworths, Dan Murphy’s and Chemist Warehouse.
Traffic, parking just some of the challenges
While Brett expects demand for same-day delivery to continue to grow, he acknowledged it can be challenging for retailers and delivery providers to meet customers’ expectations.
“There’s no window in same-day delivery,” he said. “There’s no 1-3 [days].”
Any delays — either caused by the delivery provider or the retailer — can result in a late delivery.
“I’ve done these deliveries myself,” Brett said. “Traffic, fines, parking, inaccessible locations, inaccessible pick-up places, that’s a real challenge.”
For retailers, there can be issues with outdated software and multiple bolt-on solutions creating inefficiencies in the back end, as well as the process of actually preparing the order for pick-up in-store.
“When the driver gets to the store, the goods have to be ready,” Brett said.
“If you’re doing one-hour or two-hour , there really has to be a change at the store level — a different team in a different area doing different things [and] changing processes — to make sure that an order that was bought online an hour ago is ready when the driver comes to the store. There [are] actually a lot of challenges at a retail operations level.”
Some retailers are meeting these challenges head on, according to Brett, while others still need to improve their internal processes.
But given that nearly half of retailers expect online delivery speed to be the area where customer expectations increase the most in the next 12 months, according to KPMG’s 2021 Annual Retail Outlook, it’s an area every retailer needs to be paying attention to.