Solving the ‘last mile’ delivery challenge
Time and money have always been directly correlated, and over the past few years consumers are becoming increasingly short on both.
While consumers yearn for it, many retailers find themselves struggling to deliver. This is because providing convenience is often seen to require modifying business models and consequently taking what companies are trying to save their consumers – time and money.
However, numerous studies on convenience orientation have revealed just how much impact the perception of a service’s convenience affects the overall evaluation of service. This ultimately has a major impact on buying decisions, making it a highly important factor in improving the business.
It is clear to see why millions of dollars have been spent on the one-click patent dispute with Amazon (who has most recently also filed a patent for the technology used to authenticate purchases with a selfie), because convenience has such a major impact on a customer’s decision to engage with a service. And can indeed reduce the cost to serve those customers.
If only there was a cost-effective ‘middleman’ who could assist retailers in achieving the convenience factor? Enter Penguin Pick-Up from Canada.
Highlighted by Ebeltoft Group in the 2016 Retail Innovation Awards, Penguin Pick-Up is a free-to-customer service that provides accessible pick-up locations for e-commerce and delivered products. By integrating the use of technology with physical locations in SmartCentre malls, which are close to major highways, Penguin Pick-Up provides convenience to customers, as well as boosts digital sales in partnership between malls and retailers.
In addition to handling products from mall retailers, the centres are also a convenient location for customers to pick up products from numerous other retailers, including many international retailers not located in Canada. Consumers can buy from any retailer who ships to Canada, from general merchandise to convenience goods (food and pharmacy products). Penguin Pick-Up’s use of high-quality restaurant suppliers to supply its Fresh service for food products ensures the highest level of freshness. Through this company, customers have received goods from more than 1200 different retailers.
Penguin Pick-Up differs from similar services run by a retailer, as it provides the additional convenience of being a pick-up point for products from both multiple retailers in the same location, as well as from any retailer who ships within Canada. The concept also provides SmartCentre, the shopping centre operator, the opportunity to attract additional traffic to its centres, many of which have been challenged by the rise in online shopping.
Penguin Pick-Up makes the oft-difficult last mile in the path to purchase both convenient and efficient. The customer orders online from any retailer and selects a Penguin Pick-Up location as the shipping address. The customer is notified as soon as the order is ready to pick up, and can then do so at any time the location is open, or at a specific time arranged online. Penguin Pick-Up also offers customers a drive-up service, which is quick and convenient – customers don’t have to leave their cars, struggle with packages or wait in long lines.
However, the concept is not only benefitting the consumer. Retailers can save up to 85 per cent on their distribution cost when shipping multiple customer orders to a Penguin Pick-Up location. Secondly, the concept benefits mall tenants as well, with more than 42.3 per cent of customers reporting that they also visit a mall retailer when they pick up their products at a Penguin Pick-Up location.
The concept is easily scalable at low cost, thanks to the use of shipping containers allowing for modular expansion of the Penguin Pick-Up site. And the front- and back-end technology, being cloud-based, means that centres can be operated anywhere with internet access.
Penguin Pick-Up is trying to tackle one of the most challenging and costly components of e-commerce – the ‘last mile’. This is the next generation of pick-up services launched by a retailer that benefits both customers and retailers. It enables customers to save time by combining purchase pick-ups into a single trip. The service is free, convenient and efficient. It also allows retailers to be competitive by providing an additional shipping option and convenience for their customers.
Brian Walker is founder and CEO of Retail Doctor Group, Australian elected Ebeltoft member, and can be contacted on (02) 9460 2882 or firstname.lastname@example.org. Vikki Weston, co-author of this column, is part of Retail Doctor Group’s Retail Insights team and can be contacted via email at email@example.com .
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