E-commerce has changed the retail landscape forever, and customer expectations are now higher than ever before. What does that mean for how ever-increasing volumes of goods can be delivered quickly and efficiently to heavily-populated urban areas?
With same-day and next-day deliveries the ‘new normal’, we spoke to Adrian Kumar, VP Solutions Design, North America, DHL Supply Chain, about where he sees the future of urban distribution headed.
Q. Adrian, we know from our own research on e-commerce1 that escalating consumer expectations are the key challenge for e-commerce businesses. Whether they serve the B2C or B2B market, they are all under pressure to deliver excellent, near-instant service. How is urban distribution evolving to meet these expectations?
When we look at the way urban distribution is evolving, I think we can see three key trends. Firstly, the model for e-fulfillment into metropolitan areas has changed; second, we can see an emerging new ecosystem of fulfillment; and lastly, a mix of new technologies and solutions is helping to support the retail and fulfillment models of the future.
In terms of fulfillment into urbanized, heavily populated areas of course there’s no escaping the influence of Amazon.
It has significantly reduced the time from click-to-door over the years, and has maintained a two- to three-day lead in shipping speed over its competitors. It has done this by transforming its distribution infrastructure and its footprint. Back in 2010 it followed a national strategy in the US with fulfillment centers in states that were chosen for their tax regimes. By 2013 though, it had moved to a regional strategy and started opening facilities in key distribution hubs across the US. More recently, however, it has started opening up more fulfillment centers that are close to metropolitan centers. Its Prime Now centers provide a one to two hour delivery service and it has also started to open up delivery stations, which enable last-mile deliveries.