First steps to a better last mile for e-commerce
Let them walk that last mile
With so much being spent on the final delivery to multiple specific addresses, some companies have decided to let the customers themselves walk or drive that last mile on their own.
These so-called “click-and-drop” companies are developing simple lockers and parcel collection locations, much like post-office boxes, where goods can be dropped off and picked up by customers at their discretion. Not surprisingly, Amazon has already found success in this arena, with its Amazon lockers program, but the same method is proving to be an increasingly viable, low-tech link for other startups in the last-mile process.
Strict delivery regulations in the U.K. make it an interesting case study in providing alternatives to Amazon’s well developed last-mile delivery offerings, and several startups have arisen as a result. In most cases, deliverers in the U.K. require couriers to obtain the receiver’s signature, unlike some countries such as the U.S., where packages in some instances can be left on a doorstep or in the hallway if no one is at the office or residence location.
CornerDrop, for example, touts its flexibility and convenience. The startup, which bills itself as a “carrier agnostic” company, has tapped into Britain’s love affair with the after-work pint to get more e-commerce deliveries into customer’s hands. “The difficulty with Amazon lockers,” explained the company’s co-founder, Andrew Lasota, “is you only get access to them if you buy from that website, or use the carrier to deliver to that locker.”
CornerDrop, on the other hand, empowers businesses, such as pubs and corner shops, to accept deliveries from all carriers and retailers. All businesses need is a smartphone and some space to accept deliveries, which can then be handed off to customers who enter a PIN from CornerDrop. Now in its third year, the company has already signed up 11,000 businesses where customers can pick up their purchases.
From the last-mile perspective, strategies such as providing lockers or contracting businesses to receive and hand off deliveries to customers represent a low-tech and almost failsafe options to deliveries. Such methods also open up e-commerce to customers that would otherwise not make purchases. They drive foot traffic into businesses, as well, allowing customers to down a pint, grab a sandwich or take care of other shopping requirements at the same time.
UPS provides a similar service with its UPS Access Point locations, currently numbering more than 24,000 worldwide, including 8,000 in the U.S. Another initiative that is just being rolled out in the U.S. is its self-service “smart locker” program. The latter was a response to customers who “would start out with UPS directed volume,” who then migrated from that to “taking it into their own hands to direct volume to the locker,” explained Kalin Robinson, director of new product development at UPS.
Robinson and his team soon found that, “there are fewer unsuccessful deliveries, and there are less stops, so there are benefits for UPS, but also less traffic and less miles driven.” In just five years, UPS’ My Choice network has attracted 25 million customers.
Two groups of customers that stand to benefit the most from these services are existing customers retrieving an unsuccessful delivery attempt, and those who would not have otherwise bought online, but now do so due to the convenience of a locker or kiosk location. This second group is especially exciting for e-retailers and brick-and-mortar participating stores alike. “People who pick up packages actually make purchases at the host location,” Robinson said.
The services offered by UPS and CornerDrop provide an important link in what O’Shea, from XPO, called a “cooperative approach to consolidate inventory of multiple sellers within distribution/fulfillment centers so that they can get the same advantages as Amazon – inventory close to the end customers, and lowering cost and time.”
To this end, CornerDrop is already eyeing expanding the role of its locations and giving SMEs a leg up on e-commerce giants like Amazon.
“What we’re actually building is a warehouse, with little bits of warehouse all over the U.K.,” Lasota said. “There is potential to do fulfillment. Businesses could ship products to our CornerDrops for immediate pickup. It’s there. You’ve bought it, so go down the road and pick it up from the pub. That will change online retail, and Amazon can’t do that.”
For more about how technology can speed up logistics innovation, please join us at Air Cargo World’s new ELEVATE 2016 Conference, Oct. 10, in Miami, where we will present a 3:30 p.m. panel discussion called “Advanced Route Development Strategies.” Click here for details.
