On-demand Delivery at Breakneck Speed
By Gary Forger
If you’re familiar with names like Roadie, Kanga, AxleHire or UberEats, then you’re into on-demand delivery. If not, it’s time for you to get up to speed. In either case, on-demand delivery is moving quickly, and you need to keep pace.
Let’s face it. We do love getting stuff delivered. Until a year or so ago, two-day delivery was considered on-demand by most. However, with the push by some e-commerce giants in the past few months for same-day delivery, two-day seems almost quaint. Meanwhile, it’s tough to walk through grocery stores and not notice signs promising two-hour delivery for your groceries.
So what exactly is driving on-demand delivery? Some say it is the consumer; others say the retailers, grocers and restaurants. Still others say that the up-and-coming delivery services are driving on-demand delivery. The fact is that they all had to come together at much the same time to make on-demand delivery the force it is becoming.
Let’s start with consumers. They run the supply chain, right? Well, maybe. Consumers can want what they want but sometimes it’s closer to whimsy than reality if the necessary technology and infrastructure doesn’t exist. That said, consumers’ expectations are ever increasing.
“On-demand delivery is becoming table stakes for many companies as it connects businesses and people,” explained Ben Harris, Director of Supply Chain for the Metro Atlanta Chamber, in a recent NextGen Supply Chain newsletter.
He went on to explain that on-demand delivery is all about building customer loyalty by surprising and delighting.
There’s also the matter of digitization of the supply chain. At its core, digitization collects transaction data from across the enterprise and puts it all in a central location.
There are leaders here. In December 2018, placing orders on some sites offered next-day delivery above a certain dollar amount. But even when you didn’t hit that threshold, you still received it the next day. Companies discovered it was more profitable to fill and ship orders right away rather than wait. A winning combo that have made expectations for same-day delivery soar.
There are other big-name retailers in hot pursuit. However, on-demand delivery goes way beyond these companies and the digitization of their supply chains.
While 75% of on-demand deliveries originate at DCs, the remainder run the gamut from pizza parlors and grocery stores to construction materials and auto parts suppliers. Now, you’re getting a sense of just how big on-demand delivery is getting.
Already, the full list of delivery companies is a long one and it’s getting longer every day. Several were mentioned up top. But their scale continues to expand rapidly. Roadie says it has delivered to 11,000 towns across America, and has more than 120,000 approved drivers. By the way, Roadie, and others for that matter, use an electronic platform (read digitization) to match shipments with drivers.
As you have probably figured out by now, the services offered and the companies involved in on-demand delivery are in constant churn. On-demand delivery is very much a new frontier. It’s also a new dimension in supply chain that should command your attention going forward. Remember, “surprise and delight.”
Gary Forger is the former editor of Modern Materials Handling magazine and the Material Handling & Logistics U.S. Roadmap to 2030.