“ For e-commerce firms, the three most important infrastructure items are information flow, cash flow and delivery.” Jack Ma, Alibaba founder
With its 20+ years of age, e-commerce can be compared to a young grown-up rather than a teenager and is now entering maturity phase… But is it really so? Actually, the e-commerce expansion has relied on the triple promise made to customers of 1) low prices, 2) massive choice and 3) increased convenience compared to the pre-internet era. If we can all agree that the first two promises have been definitely fulfilled since the beginning in fact (including free shipping which is the contribution of supply chain to the low price promise), well there is still certainly much to be said when it comes to convenience for which we’re certainly still stuck in the ‘over promise and under deliver’ phase.
Of course, huge progress have been achieved in delivery. Within few years, the entire industry shifted from a typical mail order delivery without visibility within 2 weeks to a typically fully tracked e-commerce delivery within 2 days. Remarkably, this quantum leap in quality based on considerable investments in network and technology happened with delivery costs remaining overall stable thanks to the massive productivity gains resulting from the digitalization of the entire industry.
So, what is there to complain about then? Well, if it’s pretty convenient to buy stuff on a mobile phone (at least if you have fast internet) with just a thumb tap, it’s much less convenient to synchronize with your order itself that seats in a package somewhere. Customers are currently left with 2 main alternatives: either use a click & collect service such as a retail outlet, convenience store or locker (which ironically reminds the pre e-commerce era) or stay at home (where the product will eventually land) which is often quoted in market studies as the preferred delivery location for customers, but with the often (huge) uncertainty on the timing of the delivery and without possibility to interact with the driver. In that case, the higher convenience of the location is offset by a low convenience on timing, which is the reason why click & collect, which beats home delivery on convenience for many customers (time constraints tend to be more impactful than location constraints) and on price, is gaining traction.
There is a funny saying in the industry about this lack of accuracy when it comes to delivery timing: when a driver calls me to inform me that I’ll be delivered between 9am and 6pm and yet requests my precise address to do the delivery, I answer that I live between Paris and Berlin. I wish that one were from me ;-)
In fact, it seems that the REAL convenience of getting one’s order WHERE I want it (my home) and WHEN I want it (when I don’t have to change my schedule) is not possible as it’s either one or the other. To complete the overview, the customer has in fact 2 more options: request a a time slot or even an ‘instant’ delivery which comes with a premium that conflicts with the low price promise, or accept a delivery at home during one’s absence, exposing its goods to porch pirates.
Ask yourself this question: when you agree to meet a friend, do you set up a specific date and time like ‘let’s meet Saturday at 8pm!’ or do you just define a time range like ‘let’s meet at the coffee shop in the morning’ or ‘let’s meet at the park between 9am and 1pm’? Besides, if one of you is late or can’t find the other, I guess that you’d pull out your mobile phone (we’re in 2018 after all) to get that extra information immediately and not stick an absence notice on a wall (‘Sorry I was at the train station but you weren’t’), don’t you? I dream of being able to set up an appointment with my home delivered order as easily as I set up an appointment with my friends!
So all of the above leads to what I call ‘the impossible trinity of delivery’ for the customer: low delivery price (ideally no shipping fee), preferred delivery location, preferred delivery moment.
In my personal opinion, all delivery options currently available on the market pursue max 2 of the 3 objectives. In that respect, it seems to me that the e-commerce company who will manage to combine all 3 aspects has the potential to grow tremendously popular by offering finally the much expected and long promised end-to-end convenience (‘from couch to porch’). But the equation to this tricky problem is yet to be found in a future moonshot in LogTech (Logistics Technology). Let’s keep watching the shooting stars then.
“ Customers want fast delivery. It’s impossible to imagine a future 10 years from now where a customer comes up and says ‘I love Amazon; I just wish you’d deliver a little more slowly.’ Impossible.” Jeff Bezos, Amazon founder
At the intersection of technology and e-commerce, the DELIVER Summit (https://deliver.events) whose third edition takes place on June 5th and 6th 2018 in London (Twickenham Stadium) is all about sparking such debate between industry decision makers. During 2 days , DELIVER is the center of the European E-logistics ecosystem where latest trends in e-Logistics are explored and where the future of delivery & logistics will be decided.
From the crazy idea to create DELIVER 3 years ago, we have grown tremendously from a first edition gathering 350 attendees in 2016 in Luxembourg, then close to 500 in 2017 in Berlin, up to 800 high level attendees this year in London.
Do you want to contribute to the discussion? Then you shouldn’t spend more time reading this article* and you jump on our website below 👇and grab yourself one of our last tickets 🎟! Retailers get a free pass and have even their travel costs covered.
* Thank you in fact for reading my first article on Medium ;)
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