Post Date : July 23, 2022
The rapidly evolving customer expectations around faster and more convenient shopping methods are fueling quick commerce deliveries. Today, it is possible to get a kitchen essential or your medicine delivered to your doorstep anywhere under 40 minutes. And this new trend is here to stay.
At present, the country has more than 20 million households that qualify as quick commerce consumers. Amid such a vast consumer pool, the needs are also well-diversified. It has been seen that not everyone is on the lookout for essential goods or consumable items. With about 13% of online transacting households are quick commerce addressable and are spending a whopping USD 50 bn on impromptu and top-up purchases. Furthermore, the online consumables market in India is estimated to clock a sustainable growth at a CAGR of 6% and reach USD 1 Tn by 2025. With the current quick commerce permeation across the online consumables market standing at 7% while amounting to 3.8 bn, This figure is projected to increase rapidly to USD 30 bn by 2025.
With such an enormous market waiting to be tapped, the quick commerce deliveries landscape is turning increasingly competitive. However, the 10-minute delivery assurance is a complex process that consists of multiple facets. Running an on-demand quick commerce business model means consuming resources rapidly, which necessitates efficient management of different logistical components. Leveraging automation can help quick commerce providers optimally utilize resources and reduce operational costs. Let us see how logistics management technologies can help manage everything from routes to resources, to drive sustainable deliveries.
Intelligent on-demand logistics management solutions utilize AI and ML for automating order allocation to enhance cost and resource efficiency. They consider several predetermined parameters like the present workload of the driver, order volume, proximity to the delivery location, etc. to quickly assign tasks to the nearest driver available.
This results in a faster, smarter, and more optimized order allocation that eventually also reduces delivery turnaround time. Smart logistics management platforms can simultaneously automate driver performance management and tracking through customized KPIs. These metrics include the time taken by the driver to start the ride after order assignment, time of arrival at the delivery location, time taken for the trip back to the store, etc.
Such granular and end-to-end visibility over driver performance helps a brand to accurately gauge and improve driver productivity while also extending a variety of incentives and employee benefits. Such tools can also prioritize dedicated fleets to ensure cost-efficient operations.
Growing order volumes necessitate devising effective incentivization strategies for enhancing driver performance. Intelligent logistics management systems feature numerous predefined and custom KPIs that can automate incentivization, performance measurement, and work tracking.
Gamification is another exceptional technique to improve rider productivity and foster healthy competition. It encourages them to boost their productivity and grab the highest position on the leaderboard and claim interesting rewards.
The absence of a customer at the delivery location or the driver’s inability to reach the correct address leads to increasing first-attempt delivery failures. This means that the entire last mile operation gets repeated, resulting in growing operational costs. One way to counter this challenge is by communicating the exact delivery time to the customer. The latter can be tackled by improving the quality of address.
Smart logistics management platforms leverage analytics to apprise customers of order ETA well in advance. The system also triggers a notification containing a tracking link to the end customer via WhatsApp, email, or SMS, once the product is out for delivery. This link helps the customer to track delivery progress in real-time and significantly increases the chances of customer availability at the time and location of delivery. Empowering customers to change their delivery location and time as per their convenience is also a fantastic way to ensure there are no failed attempts.
Geocoding helps eliminate the challenge of poor-quality address by converting it into exact coordinates. The address gets reflected as a polyline in the driver app that leads him to the precise location.
This in-depth visibility into the order progress and ETAs helps enhance the success of on-time deliveries by an impressive 24%.
Fake delivery attempts are a cause of cost-leakage. Hence, businesses must be capable of recognizing, resolving, and averting such incidents.
Smart logistics management tools enable businesses to confirm non-delivery reasons directly with the customers by seeking feedback through customer-preferred communication channels. Such tools also alert the delivery managers if the system-generated location and the delivered/driver location do not sync. AI-driven dispatch management dashboards allow delivery managers to view whether the driver has used the system-suggested planned route or not, to investigate delayed deliveries.
The consistent rise in the demand for quick delivery influences trip volumes and increases the carbon footprint. Intelligent route planning and vehicle optimization can help choose the most efficient routes and vehicles from the very beginning itself.
Dynamic route planners chart out the most cost-effective route to the customer location. It reduces the distance travelled, eliminates diversions and reduces empty miles.
Vehicle capacity optimization effectively automates vehicle selection best suited for specific delivery requirements like delivery type, volume, distance, and so on. Delivery managers can leverage technology to automatically prioritize sustainable modes of transportation such as bicycles or EVs for shorter distances.
Developing such critical technical capabilities increases vehicle utilization by 31% and also decreases the average distance covered by bikers by 23%. Thus, the deliveries develop into highly fuel-efficient and sustainable processes.
At the heart of the disruption that quick commerce deliveries is, lies automation and constant tech innovation deployed by logistics management platforms that can successfully drive quick-demand business solutions towards a strong and sustainable growth trajectory.
This article is authored by Soham Chokshi, Co-founder & CEO at Shipsy, an end-to-end global logistics management platform.