e-retail, smart transport and last mile delivery: what does the future hold?

The third session from day 1 of Ti’s Future of Logistics conference, hosted at the Intercontinental Hotel in London, was focused on e-retail, smart transport and last mile delivery. The session was moderated by Joel Ray, Head of Consulting for Ti, and the panellists included: Sandy Stewart, Managing Director Transport & Logistics, Stifel; Jerome Charlez, Founder, Khearos; Neil Ashworth, CEO, Collect+; and Patrick Gallagher, Chief Executive, CitySprint.

Throughout the session, conference attendees were shown presentations and were given the opportunity to pose questions to the panel on the latest trends impacting this area of logistics. It was discussed that even though e-retail is now technically 21 years old, it seems as though the disruptive phase we’ve witnessed during its teen years will continue for the foreseeable future.

As part of Stewart’s presentation he explained that e-commerce has experienced meaningful growth in recent years and that the high growth is expected to continue in the future. In the Asia Pacific region, according to Ti’s market size data available in the Global e-commerce Logistics 2016 report, the e-commerce market is anticipated to grow at a CAGR of 24.1% between 2015 and 2019. Stewart justified this by discussing that in China alone, the number of consumers is expected to reach 300m by 2019.

During the presentation by Charlez, he went further to explain that China’s Singles’ Day generated as much volume as the French e-commerce market annually. He then stated that failure in last-mile delivery cost logistics providers some $4.2bn in 2015.

The consumer controls the market and it is consumer demand therefore that shapes the logistics market. For example, as Stewart explained, consumers that are happy with the service they are getting will continue to use that service. e-commerce giant Amazon is a prime example of this. Consumers know that they can get delivery quickly and cheaply, and until a time that this changes or that they are disappointed by the level of service they will continue to favour its services over those of other e-retailers.

Although cost is one of, if not the most important factor behind a consumers’ decision to shop with certain retailers over others, convenience is growing in importance and that is having a significant impact on the structure of the market.

Gallagher argued that convenience is more important than speed and took the opportunity during his time on the panel to present ‘On the dot’, a customer-centric delivery service that allows the consumer to determine a specific time and location for delivery. There is demand for services like this from both sides: from the providers that are losing profit as a result of failed deliveries, and from consumers that are inconvenienced by needing to re-schedule missed deliveries. Ashworth agreed that convenience is paramount to consumer decisions, and explained click and collect is the preferred method of last-mile delivery in the UK.

Could click and collect be the saving grace to bricks and mortar retailing? Whilst bricks and mortar retailing certainly isn’t dead, the change in consumer preference offers stores the opportunity to also act as distribution centres and fulfilment locations. Ashworth concluded that there is still a bright future for bricks and mortar in conjunction with e-commerce – it’s known as bricks and clicks.

Source: Transport Intelligence, June 9, 2016