[Guest post by Nathan Mizrachi]
Chances are high that you’re reading this on your smartphone, so you don’t need reminding that technology is pervasive in society. Since everyone seems to be watching Black Mirror these days, you can’t exactly blame people for being a little bit skeptical of this technology-dependent world we live in. But before we get caught up in the possibility of social media “likes” determining your ability to take out a mortgage, let’s acknowledge that there are some serious benefits to living in the digital age.
Especially if you’re in ecommerce, the future looks bright; the latest research shows that retail spending will continue shifting to ecommerce. The explosive growth and innovation we’ve witnessed — from mobile apps making it possible to buy offline to embedded cookies that offer custom suggestions for online purchasers — have placed ecommerce on an arc of ever-greater accuracy and expediency. Amazon’s Prime Now service has proven that retail goods such as groceries can be delivered the same day (in many cases, within a few hours), and this trend of same-day delivery will become more commonplace. In the not-so-distant future, receiving a package the same day you order it will be the new normal. Here are six reasons that explain why.
1. RFID tags synchronize the supply chain
The norm in fulfillment and distribution has been to use barcodes for tracking products, but barcodes have serious limitations. While a barcode has the advantage of being printed directly onto a product, RFID tags are better in almost every other respect.
Jake Rheude, director of Business Development at Red Stag Fulfillment, a third party logistics provider that is on the forefront of adapting new technologies to speed up fulfillment, says that RFID tags ensure a more accurate fulfillment experience: “An RFID tag doesn’t need to be in the line of sight of a scanner, and up to 40 of them can be read at the same time. They also offer more accurate physical tracking than barcodes, which translates to more on-time deliveries and less errors. RFIDs are a huge time-saver.”
In the future, RFID tags will replace barcodes and further expedite the shipping process — one day, a mistaken order will be about as frequent as a plane crash; in other words, it will become a mathematical anomaly. The backlog created by returns or lost inventory will disappear, and this will have a streamlining effect on all goods being shipped.
2. Automation from top to bottom
It’s an issue which raises serious philosophical questions, but in the future you can expect to see a lot less people involved in the process of shipping products from A to B. Eventually robots will do the work currently done by humans, whether picking items in a warehouse, or driving those items by truck from a fulfillment center on the outskirts of a major city to be delivered. The addition of drones to the fulfillment fleet means that eventually delivery trucks will be a forgotten relic of suburban neighborhoods. In the future, drones will fly packages the last few miles to a customer’s doorstep.
One key element of the fulfillment cycle is trucking. As we are seeing with Uber’s driverless fleet in Pittsburgh, USA or Tesla’s autopilot, driving is moving in the direction of full-scale automation. Whereas a man driving an 18-wheel truck has to take breaks every four hours to rest and recover his alertness, a truck driven by computer program doesn’t have to. At all levels of the logistics process, the insertion of automation will lead to a faster, more accurate, and safer shipping experience.
3. Big box stores will become last-mile delivery hives
As Amazon and other online businesses take a bigger bite out of the pie, traditional big-box retailers such as Walmart and Carrefour will have to play by the rules of ecommerce. It seems crazy to envision now, but within five to ten years customers will hardly set foot in these stores. Instead, a company like Walmart will leverage their near-ubiquity in just about every corner of every major city in the USA and convert their stores into mini-fulfillment centers. As sales migrate from retail to ecommerce, stores will ultimately become staging areas for fleets of delivery trucks and drones that handle last-mile fulfillment.
An interesting medium-term trend — the “missing link” in the evolution from brick-and-mortar to ecommerce — is click-and-collect shopping at US retailer Kohl’s, where shoppers buy a product online but pick it up themselves in-store. One of the beautiful side-effects of click-and-collect is that Kohl’s found that their customers who came in to pick-up items they bought on online spent an additional 25% of their original purchase on impulse buys once they were inside the store. While the prevalence of same-day delivery will continue taking a big chunk out of retail, click-and-collect is a proven method to boost sales for businesses that have brick and mortar locations.
4. 3D printing of on-demand goods removes an extra step in the delivery chain
The capability of 3D printing grows each year, with printable electronics just recently becoming a thing. Eventually certain consumer goods — everything from HDMI cables to kitchen cutlery — could be produced on-site. This removes the need for long-distance shipping, eliminating an entire sector of the fulfillment process, and passing along savings (not to mention precious hours) to consumers. The bad news is that sophisticated and commercially viable 3D printing is nowhere near to being achieved; right now the technology is limited to basic plastics and other polymers.
Once items can be printed affordably and at a high degree of quality, it’s possible that factories might integrate directly with fulfillment warehouses. Until then, though, we’ll just have to rely on the old-fashioned manufacturing chain.
5. Logistics centers will pop up in more strategic places, plus more people than ever will live in cities
More and more fulfillment centers are being built to serve growing and highly concentrated cities, meaning more people can be reached within a smaller area. Amazon and other logistics companies are continue to build and expand fulfillment centers to reach more customers in a faster amount of time.
Of course, this wouldn’t be happening without the growth of cities. More people than ever live in urban areas, so it’s in the interest of both consumers and businesses to have a logistics infrastructure that can reach more people, faster. While innovations in technology take a large share of credit, same-day delivery will happen simply because more people live in a smaller space than ever before.
6. The popularity of Amazon Prime encourages merchants to accelerate fulfillment
While Amazon, Ebay, and other online retailers have in a sense spoiled customers just by making delivery of consumer goods a normal occurrence, things have really taken off because of Amazon Prime. It’s a widely-known fact that Amazon Prime, which guarantees two-day and in some cases same-day delivery, gives priority in customer searches to merchants who use FBA (Fulfillment by Amazon).
It’s created a cycle where Amazon offers faster service, customers expect faster service, more merchants sign up for Prime, customer expectations increase again, and so on.
Salo Mizrachi, founder of travel accessory website EzPacking, explains that he recently switched from self-fulfillment to FBA with these conditions in mind. “After factoring in the time it took to ship orders ourselves, plus the lower shipping rates FBA offers, it made sense to switch. We’re excited to give our customers an even faster delivery experience.”
Between driverless truck delivery and more concentrated city populations, same-day delivery is bound to be the new normal in ecommerce.