As organisations look to become more sustainable and meet rapidly changing consumer expectations, intelligent deliveries are now lighting the way. Danny Hudson, Director of Retail & CPG at Fareye explains.

Intelligent delivery is still a very recent term and has been developing rapidly, particularly during the global pandemic. Mostly, the term is used in relation to software and many retailers, carriers and manufacturers have come to the realisation that they’ve needed such software to orchestrate their delivery operation more efficiently. And as restrictions around the world are lifting, it would be unwise to assume that everything will return to normal. Businesses should be prepared for more deliveries, not less.

Until recently, delivery used to be about finding the cheapest method. Today, there are a lot more aspects to consider – sustainability, speed and quality of delivery are all critical. By adopting more sustainable delivery methods, it offers retailers an opportunity to showcase their willingness to adopt a more sustainable way of working, while also reducing transport costs. 

Many retailers and e-commerce businesses have responded to a rise in CSR and effective supply chain management, by implementing more efficient production and delivery planning. On this, ESG (Environment, Sustainability and Governance) is becoming a key measure for business. Investors are starting to back companies that have a better ESG rating than others due to the value a business’s green status carries.

The issue is that retailers and others are not yet fully aware what the impacts of their supply chain are on their ESG rating and cannot measure it. When it comes to the post-purchase experience and last-mile delivery, it becomes even more of a guessing game.

Supply chain emissions are difficult to measure; however, companies need these statistics in order to work towards their net zero goals. If calculating supply chain CO2 emissions manually, or for the first time, it’s suggested that the spend-based method is used, which involves multiplying the capital value of a purchased product, or service, with an emission factor (the amount of emissions produced per financial unit). This will provide an estimated value of the emissions produced but won’t deliver entirely accurate results, as it does not account for specificities in the calculation.

The second method – or activity-based method – accounts for the missing information. It does, however, require additional data collection. This method makes use of a company’s emissions data and that given by its suppliers. For example, the litres of fuel burnt from deliveries is multiplied by the emission factors of the activities. This equals the emissions estimate.

There are simple, yet valuable, steps to take in cleaning up production and delivery. For example, route optimisation is one of the most effective ways retailers and e-commerce companies can cut back on fuel costs and carbon emissions. As deliveries account for the vast majority of a company’s carbon footprint, route optimisation impacts significantly on becoming a more sustainable enterprise.

Another area intelligent delivery is driving change is the last mile, with consumer expectations now being far higher. Up to 66% of millennials think all purchases should have a one-hour delivery option. And 55% of all consumers say that three late deliveries would prevent them from using a service provider again.

With omnichannel shopping maturing, more retailers are focusing on their store estate as an asset and innovating in other ways to differentiate from the competition, within the last mile experience. Deliveries are expected to be faster and consumers want more information at each stage. Next and same day delivery are even already becoming outdated with many supermarket start-ups now offering delivery within 10 minutes.

Focusing on the post-purchase experience, investment in last-mile services and meeting consumer demands are paramount. Retailers have recognised that not delivering on consumer promises in the last mile is costly to business and damages loyalty. But effectively sourcing inventory, meeting customer SLA’s and efficiently running last-mile operations is a balancing act.

Flexible delivery technology allows businesses to operate differently, service the customer in new ways and work extremely efficiently. Reaction times are dramatically shortened with new delivery services rolled-out more quickly. In order to succeed, retailers must be innovative, offer more sustainable delivery options and, most of all, understand the demands of the demographics they serve and be able to flex their operation to delight them.

Author: Danny Hudson, Director of Retail & CPG (Consumer Packaged Goods), Fareye

FarEye’s intelligent delivery management platform helps retailers and carriers manage, track and monitor their delivery logistics operations, ensuring real-time and transparent delivery.

Fareye has more than 150 customers across 30 countries, including DHL, UPS, Dominos and Walmart. Founded in 2013, the company has over 700 employees with headquarters in India and four other offices, including the UK.

By Alison