Once considered a premium option — assuming it was available at all — same-day service is now the standard for many e-commerce shoppers. Mike Honious, chief operating officer of Geodis Americas, explains how retailers are meeting that goal.
Q: What are some of the trends that you see in the marketplace right now with regard to same-day delivery?
Honious: It's pretty exciting. Five years ago, we weren't even talking about same-day. People were just happy to get their packages once they ordered them online. Now, over 50 percent of buyers expect to get their orders within two days or less. Same-day delivery is the gold standard today, and wantythe momentum is just going to keep going.
Q: How are same-day delivery companies addressing urban congestion, which is getting worse all the time in the big cities?
Honious: What I tell people is that you’ve got to look at your brand. You want to build brand loyalty and understand the consumer. Are they happy with two-day delivery in part of the country? Are you going into an urban area, where 80 percent of the population is? Do you want to set up small distribution points where you can feed merchandise on a same-day basis in those areas? You don't have to be everything. You just want to be where your customer is.
Q: For some companies, delivery efficiency is the brand.
Honious: That's exactly right, and as you build the volume around same-day, that cost is going to get less and less. People today are actually paying for that type of service.
Q: What’s the trend in how companies are achieving same-day delivery? Are they using their own trucks, and their own people? Are they looking to the ride-sharing model? How are they actually executing on this?
Honious: We're seeing a mix. In the omnichannel world, you've got companies with their own brick-and-mortar operations. They might have their own distribution centers, or be using a 3PL. You’ve got to look at it as building blocks. What’s your core competency, and what are you really good at? What do you need a professional to do? A lot of 3PLs now are focusing on same-day. How do you build that into your network? You’ve got to find the right match.
Q: Say I'm a supply-chain professional with company XYZ. I want to get started with next-day or same-day delivery. How do I approach the question of how I’m going to execute on that, how much I’m going to rely on technology, and on in-house versus outside expertise?
Honious: You want to understand where your company is in the marketplace. What kind of access do you want to have to your customers? Where can you add value in the delivery process, in a way that's not a large cost to your company? You need to understand the different types of distribution and logistics processes, including the 4PL model. Will you go after regional carriers? Can they provide the same service as a national carrier? You also need to get feedback from consumers as to their expectations.
We’re moving into a world where everybody is going to want same-day delivery. I truly believe the marketplace is going there.
Q: How much thought should companies be giving to the technology side, such as the use of drones and robots?
Honious: The labor market is really tight now. Innovation is happening because of that. What you need to be looking at is the technology around middleware and your I.T. infrastructure. How can you tie different systems together, to the point where they become seamless? You don't want to design the system to do everything, because next year it will be totally different.
Q: Do you expect customer demands to get even more intense, to include hour-specific and appointment-based delivery?
Honious: A lot of municipalities and cities are driving that. You need to know their rules and regulations as to what you're allowed to do. Then you can set up expectations with customers on the front end, and give them some choices. They just want their orders delivered at the time you promised. If you do that, you’ll have happy customers.
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