Making 10-minute Deliveries Sustainable: Breaking Myth With Math

A single mother gets baby food delivered to her home instantly, as she leaves the toddler in the care of her mother to rejoin the office. A manager just ordered a pack of chocolates to celebrate the first sale made by his new colleague. For a whopping 83% of consumers, who prioritize convenience, 10-minute deliveries are surely a game-changer. Let alone those who must prioritize easy access to essentials for their loved ones. Believe it or not, instant deliveries are making lives easier.

Moreover, brands cannot ignore it for the mammoth addressable market it opens. According to Redseer, quick commerce that’s estimated at USD 0.3 Bn in CY2021 is likely to grow 10-15x to reach USD 5 billion by 2025. The report further confirms that 20 million households are addressable by quick commerce in India, with an estimated addressable market size of USD ~50 Bn in 2020. Currently, at USD 3.8 Bn, the quick commerce online consumable (fresh, packaged foods, beverage, staples, etc.) market is expected to grow exponentially at 12-13% to reach USD 30 Bn by 2025.

This is one of the key reasons established top on-demand delivery brands are at loggerheads to grab the bigger portion of the pie. At the same time, a 10-minute delivery category creator is driving intense competition in this space.

But from inviting spoofs, generating curiosity, or simply amazing end-customers and even other brands, the delivery model has attracted a lot of reactions lately. Some even called out the model for being a cash burner. Yes, it could be. If not handled with care.

Meeting surging demand and rising order volumes for instant deliveries necessitate a robust delivery scalability plan. It must be replete with a backup that allows brands to quickly onboard 3PLs or freelance riders, if the need be, to complete deliveries in the stipulated time. However, manual and inefficient use of existing resources and infrastructure, such as drivers and vehicles, results in outsourcing. Further, poor visibility over resource availability and performance worsens the situation. The brand often burns more money, investing in resources that are actually no good. It is precisely this situation that becomes a double-decker cash burner for brands. But “10-minute sustainable deliveries” are possible.

Optimizing Deliveries: Technology To The Rescue

Intelligent technologies such as AI, ML, big data, etc., empower brands to take complete control over their logistics processes. With smart logistics management tools, businesses can significantly optimize the cost of delivery operations, boost productivity, and ensure delightful and transparent customer experiences.

Let’s see how.

Enabling Efficient Fleet Management and Fair Driver Payouts

Imagine a brand handling thousands of deliveries every day with a mix of the dedicated fleet, floating fleet, and 3PLs. It is highly likely for store managers to err and assign orders to non-efficient but high-cost drivers while cost-efficient ones stay idle. Hence, optimum utilization of the existing fleet alongside visibility over driver availability and performance is crucial to avoid unnecessary cost-leakages.

Intelligent allocation rules automatically consider the driver’s current workload, volume, proximity with the customer location, and other pre-defined parameters to assign the delivery task to the best resource available and fairly among available drivers. Smart logistics management platform can automate driver scoring based on: the time taken by driver to start the ride post order assignment, if the driver reached the gate within the expected time, and time taken to get back to the store, and other such parameters. Therefore, having this end-to-end visibility over driver performance helps boost delivery productivity, marking 95% of deliveries in real-time. It also prioritizes a dedicated fleet to ensure faster and cost-efficient order fulfillment.

Real-time data-driven dashboards aggregate analytics of riders, orders, and other SLAs, allowing delivery managers to archive reports for improved logistics planning and KPI evaluation. The system also calculates and validates the hours clocked by a driver to ensure shifts are adhered to and disburses payment accordingly.

Gamification and Incentivization to Boost Driver Productivity

Massive demand for deliveries and a growing number of drivers make it difficult to chalk out effective incentivization strategies or boost delivery performance manually.

Intelligent logistics management systems allow delivery managers to boost driver engagement and productivity but not at the cost of driver safety. By gamifying driver KPIs such as numbers

of orders successfully delivered, customer ratings, on-time deliveries, both managers and drivers can gauge the latter’s performance in real-time, which can also be configured into an incentive strategy. Real-time performance scores, in-app leaderboards, customer feedback, etc., allow drivers to improve their ranking.

Ensuring First Attempt Delivery Success

A lot of money gets burned in delivery reattempts due to customer unavailability at the location. Modern-day customers demand end-to-end visibility into where the order is, when it will reach them, who will be delivering it, and other information.

Smart logistics management tools use real-time analytics to provide advanced visibility over order ETA. Moreover, a dynamic route planner triggers a notification with a tracking link to the end customer via SMS, WhatsApp, or email once the order is out for delivery. The customer can use this to track delivery progress in real-time. This delivery visibility increases on-time deliveries by 24%, boosts first attempt delivery rates, and reduces costs on subsequent reattempts.

Arresting Delivery Deviations

A critical area of potential cost-leakage could arise from wrong or a fake delivery attempt. At times, a driver marks the delivery as complete without reaching the actual customer location. It could be due to an inaccurate delivery address or a fake delivery attempt. In either case, relevant delivery stakeholders must have complete visibility of where delivery was supposed to be made vs. where it was actually made.

Geocoding converts customer location into exact coordinates to help drivers reach precise delivery locations every time. A smart logistics management platform immediately triggers an alert both to a driver and a delivery manager in case the location of a delivery point does not match with a driver’s current location. Dynamic routing tools automatically draw a polyline on a map with a defined deviation radius to optimize delivery productivity. It can reduce last-mile delivery costs by 12% and drive 14% more deliveries per driver. AI-powered dispatch management dashboard allows store/hub managers to visualize and compare the route taken by the driver to deliver the order and back. It gives a clear view of whether the driver followed the system-suggested planned route or not to investigate delays further.

Reducing Trip Volumes

Skyrocketing demands for instant deliveries are bound to influence trip volumes and also affect a brand’s carbon footprint. Intelligent route planning and optimization tools can chart out the most efficient route to the customer location and automates vehicle selection based on predefined configurable logic to maximize deliveries per vehicle. The system fetches real-time traffic conditions to avoid congestions, roadblocks, etc. It enables multi-drop deliveries, reduces empty miles, curbs the average distance traveled by bikers by 23%, and increases vehicle utilization by 31%. Hence, it makes deliveries fuel-efficient and sustainable. Not only this, but the system also empowers store managers to prioritize sustainable delivery modes like bicycles for shorter distances.

Modern-day technologies have brought us to a point where brands can bridge the gap between speed and cost-efficiency. So, although a fragile model, 10-minute deliveries only require special handling to drive sustainability and profitability.

SHIPSY MEDIA CONTACT

arjun.alva@shipsy.io