delivery driver logistics

With retailers looking to provide the best and most convenient service for their customers, the future of e-commerce logistics could be transforming. Increasingly, the accuracy of warehouse picking is making the difference between profit and loss because of its impact on delivery costs. On average, the rate of errors in warehouse picking is 2%-3% per crate. These errors often lead to low customer satisfaction, lost sales and poor customer retention, as well as additional costs due to returns, repackaging and re-shipping. However, thanks to developments in stock inventory technology, picking for deliveries could soon take place in-store.

As stock inventory systems become more sophisticated, retailers and logistics companies are able to gain a complete view of where everything is in their supply chain at any given time. This no longer restricts retailers to only knowing what is in their distribution centres. They also have a real-time picture of what stock is available in-store, what is currently in production with manufacturers, and what is being delivered to them. This detailed view of stock across the supply chain will give retailers the opportunity to turn every store into a mini distribution centre and completely change their approach to logistics.

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The systems will provide a full inventory of not only stock but will also allow retailers to gain a view of where they are using labour. Through the use of technology and complex algorithms, retailers will be able to see where there is spare labour within the supply chain and decide the best ways in which to use it. This will give retailers the opportunity to bring delivery in-house, with the complete view of both stock and staff making it possible for available staff members to make deliveries. This would lessen the need to use delivery companies, which can often be the most costly and problematic part of the e-commerce process.

There are several benefits to taking this approach to logistics. Firstly, it would allow retailers to offer a shorter delivery window of between 30 minutes to an hour to ensure customers are at home when they arrive. This would ease deliveries of alcohol, for example, where somebody over the age of 18 must be present to accept the delivery. Shorter delivery windows would also reduce the need for redelivery, thereby reducing the costs associated with multiple delivery attempts.

Secondly, as prices from distribution centres tend to be fixed, using spare resources in-store to make deliveries during times when stores aren’t very busy would allow retailers to remove some of the costs associated with the distribution of goods.

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This approach would also speed up the process for customers. For instance, if somebody orders an item that is picked and delivered by their local store, it is likely the process would be much quicker than waiting for items to be delivered from a distribution centre, which could be anywhere in the country. Additionally, errors from in-store picking are few and far between due to it being done at a much lower volume than in distribution centres, which, comparatively, would increase customer satisfaction.

These developments in e-commerce logistics could also play into the gig economy, allowing staff members to earn extra money by fulfilling delivery duties on their route home, for example. Additionally, retailers could look to farm out delivery, using an Uber Eats or Deliveroo-style app whereby gig workers would be able to accept a delivery job from a local store and drive it to the recipient’s home.

Ultimately, the e-commerce logistics of the future looks very different from today as a result of centralised systems making it possible for the picking and distribution of goods to become decentralised. Over the next year to 18 months, we will see more stores begin to act as mini distribution centres as new technology allows e-commerce logistics to become much more agile.

Mike Callender is executive chairman of REPL Group

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