Home Delivery: The Last Mile

Home shopping is a lifesaver for busy people, but only when receiving the goods is as convenient as the ordering process itself. But while breaking delivery promises has been much lamented in the past, now the fulfilment Holy Grail is not getting products on the road but delivering them effortlessly to people’s doors. It’s the last mile that counts.
The scramble to get it right has seen a flurry of activ ity by firms eager to be first to offer unparalleled delivery excellence. Supermarket chain Waitrose, for example, recently acquired a 40 per cent st ake in deliv ery speci alist L ast Mile Solutions. ‘l’his, despite a report by Merrill Lynch that it still costs between £15-£24 to fulfil and deliver orders — much more that the average £5 supermarkets are currently charging.
‘I’he last mile presents ever ne from the retailer to the carrier with a challenge: how to ensure first time delivery with minimum fuss. For the niailing and fulfilment houses particularly, the stage has been set to see if they can offer the best last mile solution first.
J ust last month, iForce claimed a major contract to work with John Lewis with last mile delivery very much in mind. Chosen to support its Octoberlaunched site johnlewis.com iForce is responsible for John Lewis’s 48-hour and Saturday dispatches as well as providing a two-man specialised deliv cry for very heavy items. As the website service rolls out over the next couple of months, John Lewis will keep its eye on customer demand for other delivery
options.
Mike Trenouth, iForce’s group commercial director, believes consumers
are crying out for more flexible delivery. “Fulfilment in the c-commerce marketplace has been pretty shoddy,” he says. "There is a huge demand for last mile solutions.”
The raising of the stakes has not gone unnoticed b fulfilment houses either. Stewart Oxley, associate director of business development at fulfilment house prolog.uk.com, says he has
noticed a mitch greater demand for it:
“People are waking up to the fact that they have to offer customers options.” The demand has seen Prolog begin an after dark service with Parcelforce. "Of our 12 largest B2C mail order operations, at least six are looking at options outside of normal hours,” he says.
Second guessing what new demands will be is big business. In response to similar requests, Consignia is also increasing its services. "Customers are demanding a higher level of convenience,” says Nigel Moore. Consignia’s marketing director of home shopping. "We have rescheduled so that business deliveries tend to he daytime while residential deliveries are shifting towards the evening.”; year ago, Consignia launched its evening service with Parcelforce Worldwide. Originally offered between five and nine pm, it is now between six and nine pm to reduce waiting times.
In addition, Consignia is experimenting with delivering to alternative, pre-arranged locations. July saw the launch of Local Collect, which allows consumers to choose delivery direct to a Post Office branch when they order from a retailer signed up to the service. Alternatively they can have goods delivered to a Post Office ifthey’re out.
Investment in last mile solutions isn’t just confined toConsignia. Mailing and fulfilment house Reality is one ofa small number leading the way with secure delivery codes. Working with the Book Club Association it uses these codes to tell carriers where the customer wants the delivery taken in their absence. Eddie Bentley, Reality business development director, says:
This is logged on tile and it no one responds we resort to the secure delivery code.” It is also working with Spar convenience stores to test rising shops as a drop off point. The trial is Scotlandbased and is being closely watched.
“Although we ultimately have to deliver things to the home,” admits Bentley, “we don’t want to go down the same street three times a day. People
don't want to pay more for deliveries.” The alternative to shops or Post
Offices are drop boxes.These are being trialled in the UK bya number of retailers. Schemes vary from boxes attached to the sides of houses to locker-style boxes in public places.
Consignia is trying out drop box schemes with system providers Bearbox, Homeport, Delivery Point, 3S and Bybox. Moore says: “We are trialling different boxes to see how much consumers want them. The other test is will they buy more because ofa convenient delivery and will it reduce costs?” The latter is the big question. If carrier costs are passed to retailers and customers, both parties may think again.
The big bonus for drop box systems is enabling deliveries to be made first time. Homeport is one such system. Mark Lunn, Homeport’s marketing director, says: “Supermarkets offer timed deliveries but the route vans take make it very inefficient. Homeport enables you to plan routes more carefully.” With Homeport, customers have a locking device permanently attached to an external wall. Aluminium boxes are attached to the Homeport by a steel cable when a delivery is made. As Lunn explains: "if the delivery van gets to the house and no one’s in but there’s a Homeport, the driver can just take a box out of the van and plug it in.” Each Homeport has three holes for up to three deliveries, which means one Homeport can be shared by different households — handy for blocks of flats.
Sainsbury’s is just one retailer currently trialling Homeport, choosing it for its ability to handle large volumes of groceries and the provision of up to 12 hours of temperature control for chilled and frozen food.
Security is obviously an issue with something left outside a house. To prevent theft each customer has a smart card which releases only their lock, and the deliverer cannot reopen the box once it has been plugged in.
Homeport competes with a similar scheme called Bearbox, again easily removable boxes that are attached to the customer’s house via an expandable steel bolt with the door secured by an electronic lock. Here, however, PIN numbers are used for security reasons. These codes enable the carrier to open the box to make the delivery and expire on use. This means that no one else can use a code that has already been used to open a box.
Just how successful these solutions will be is being questioned by some fulfilment specialists. David Wells, director of SR Communications, says:
“A different PIN number is all very
well,” he argues. “But how does it work if there’s more than one delivery in a day? Something could go missing.”In addition, while Homeport is charging the consumer nothing, and retailers £1 per delivery, longer-term there may be a subscription fee.
Despite the scepticism, James Bates, marketing director of Bearbox, believes there is a strong market for this type of system, but that there is an adoption period for this product type.
And the the crux of the last mile issue is delivering first time at a competitive and acceptable price to both consumers and carriers. “In terms of going the final mile, it’s all about giving people other alternatives,”says Wells. No solution is going to suit everyone; it’s more a case ofchosing the right one to suit all parties. As Consignia’s Moore sums up: “There are different ways of approaching the problem with more than one solution.”