Retailers: Supply chain visibility trumps same-day delivery
- Retailers are more interested in full supply chain visibility and precision rather than same-day delivery operations, according to a report released by last mile solutions provider Localz and eft Supply Chain and Logistics Business Intelligence, a networking agency for supply chain business leaders.
- The report highlights the development of what Localz calls the individual economy, or "Iconomy," denoting the trend that consumers want what they want, when they want it.
- According to Localz CEO Tim Andrew, retailers and consumers are more interested in full control of their orders and shipments than they are in immediate delivery, which accounts for the rise in direct-to-consumer delivery methods.
While same-day delivery is still important to retailers and consumers — it ranked second on the list of priorities in the report — Andrew said that as a member of the logistics industry, he was surprised that full visibility is considered so critical.
Of the 129 retail supply chain executives surveyed, 66% said next-day delivery was a top service demanded from their logistics providers, with 57% citing full visibility and 50% citing same-day delivery. Furthermore, 56% of the 194 logistics executives surveyed said full visibility was the No.1 service demanded from clients.
"We’ve moved from this era of trust to continual verification," he told Supply Chain Dive. "That’s one of the key things that's somewhat expected. We see this trend of the customer being in control. Same-day delivery is still a high expectation, but same-day delivery [as a service] isn't growing as fast."
Andrew thinks that's partly because the option of immediate delivery may not be preferential because retailers' and consumers' schedules and circumstances may not allow it.
"Customers are really looking for visibility and precision," Andrew said. "If you ask people if you want something right now or tomorrow, they’ll say, 'Sure, right now.' But actually, I don’t really want it right now because I'm about to jump on a plane. Tomorrow morning before the kids go to school is probably a better time. I think out of context, people say, 'Sure, right now.'"
For Andrew and other 3PLs, the fact that full visibility of the last mile is more important to customers than speedy delivery indicates that consumer preferences are little more nuanced than originally thought.
That's why, as the report notes, 3PLs are increasingly offering direct-to-consumer services to their manufacturing customers to better meet demand. Fifty two percent of the logistics respondents said they offer DTC services to their manufacturing customers, while 65% of the retailer respondents said consumers were more interested in delivery flexibility than speed of delivery.
And that's what the next wave of e-commerce is likely to be: delivery flexibility rather than speed. Now that consumers know they can get shipments fast and cheap or free, they want to be able to control when, where and how they receive shipments.
The ability to change addresses, delivery times and places is going to be the 3PL's next challenge, especially as the internet-driven economy centers around rapidly changing consumer preferences.
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