Which way, Deliveroo?

UK-based food delivery company Deliveroo has had a tumultuous time in recent weeks thanks to the lockdown. The CMA recently called off its investigation into Amazon’s bid for 16% of the business, after Deliveroo made representations to them to the effect that they would go under without the cash injection.

Despite the provisional approval of the £400 million boost, the 2500-employee food delivery app announced it planned to cut 367 staff and furlough 50 more, blaming a significant slowdown in restaurant order volumes as major chains such as Burger King, Wagamamas and others shuttered operations during lockdown.

Grocery not picking up the slack

During that time, Deliveroo has been looking to the under-pressure grocery delivery market, striking deals with independent grocers as well as those supermarkets who’ve been caught behind the curve on online grocery delivery like Morrisons, M&S and the Co-op. In theory, this is a great match of underused delivery capacity to a sector where demand is massively outstripping grocers’ ability to serve it. In practice, it seems the order volumes have not yet been high enough to offset the drop in takeaway demand.

In fairness to Deliveroo, none of the grocers involved are seriously advertising the Deliveroo option on their site, meaning customers would have to already be aware that they could order groceries on the platform to use it. This may simply take time, but given Deliveroo’s brand positioning as a takeaway service, it could be a challenge.

Can Deliveroo use spare capacity to help ecommerce?

Rival Uber announced its “Direct” and “Connect” delivery services (Direct is your regular B2C delivery, Connect is a C2C package sending service) last month. Uber has previous in this space, with 2014 seeing the launch of “Uber Rush”, which was shuttered in 2018. What’s different now is that Uber’s core business is looking down the barrel of long-term lockdowns worldwide, making it much more crucial to maximise other revenue opportunities.

If their competitors are trying it, and with carrier and postal businesses swamped with parcels from massive online demand, is there space in the market for Deliveroo’s fleet of mopeds, scooters and push-bikes to offer urban parcel delivery?

But £10 T-shirts are very different from £10 pizzas. And the biggest obstacle here in our view is infrastructure, and lots of it – and capital investment is not something the ‘asset-light’ business models of Deliveroo or Uber like. However, a partnership with an existing carrier needing to augment urban delivery capacity could be an option. Of course, factoring in the necessary tech alignments, the fact that some major restaurant chains are re-opening for delivery and an already intensely competitive logistics market in the UK, Deliveroo might see a clearer path to stability by focusing on grocery and takeaway.

“The New Normal”: What can carriers take from the Covid-19 crisis?

On one hand, delivery demand is sky-high, resources are stretched to their limits and, depending on who you listen to, there’s no end in sight. On the other, children are hanging ‘thank you’ posters outside their homes for postal workers and delivery drivers, now rightly viewed as brave, essential to communities and helping to keep us safe. In a matter of weeks, it’s been quite the adjustment for carriers and postal services, but what will their ‘new normal’ look like in the months to come?

The long-term impact of social distancing

Social distancing is now a given in all circumstances, but in a parcel sorting scenario, this translates into a problematic process slowdown, as fewer employees can be accommodated in the same amount of space. Consumers are currently patient and prepared to accept a longer wait for their parcels, but as demand plateaus into consistent volumes that’s likely to wear thin and sorting will be the bottleneck that drives postal services and carriers to investigate automation options. This is an open door for new areas of investment, as we’re now in a place where cobots (or co-operative robots) in the workplace are commonplace, affordable and viewed as complementary to the skills of an existing workforce. 

Extra sanitation and protection as standard

Although the World Health Organisation says that the “likelihood of an infected person contaminating commercial goods is low”, hygiene practises in the delivery industry continue at an intensity that varies from country to country. In China, sorting spaces have been undergoing the kind of deep cleaning you might expect to see in a hospital, while Thailand’s postal service have been disinfecting all packages received from outside the country as a matter of course. Supplies for personal protection, hygiene and sanitisation have been provided for use by employees in sorting offices, out on deliveries and in counter service and this looks to be an ongoing cost that posts and logistics carriers must factor in for the long-term.

Regaining consumer confidence through contact-free returns

Right now, returning goods is a particularly big issue and it’s a fair bet that postal operators who occupy retail footprint will turn to technology to ensure consumer confidence. Retailers are relaxing their returns policies in line with government restrictions and sympathy for customer anxieties, but as restrictions ease, it is rightly anticipated that consumers certainly won’t feel entirely comfortable with counter service for their returns. Long-term planning has already sparked an increased interest in Self-Service Returns, as well as other contactless means. Ultimately, it will be viewed as an investment in regaining lost sales and any knock-on effect this may have on their contracted carriers.

Replacing the signature

Is there really any need to sign for a parcel anymore? Probably not, as it turns out. However, there are tricky areas to consider, such as age-restricted goods, or doorstep returns, which have traditionally required signatures by law or for the protection of both parties. While a photograph of the recipient taken by the courier is adequate for now, it’s a stopgap of a solution that is riddled with loopholes. This could be addressed by a combination of new processes at checkout by retailers and technologies where recipients can use their smartphone to scan acceptance of deliveries.

Meeting at the last mile

Ticking both the speed to customer and contact-free boxes, a huge rise in PUDO is certainly on the cards. Dropping off in bulk to a single point can represent huge cost efficiency to carriers and postal services, while customers can select the place – locker or counter – that is most convenient and feels safest to them. In the reverse, plentiful access to hygienic, low-contact PUDO locations means that retailers can quickly reinstate their standard returns policies and regain control of their inventory.

Necessity is the mother of invention

Change inevitably comes with a price tag, but this shouldn’t be viewed as reactive and negative. The situation we find ourselves in is by turns bleak, frustrating and tragic, but the industry has also been afforded a way to scrutinise itself like never before. Every element of the logistics experience has an opening for new efficiencies, the next big push in digital transformation and honest conversations around expectations and the experiences of customers and employees alike.

Does PUDO work during a pandemic?

The core competency of delivery and logistics, getting things to people, is perhaps never more crucial than in crises like this. People self-isolating or in quarantine still need and want consumer goods, and now ecommerce is the safest and most accessible route to obtaining them. Where brick and mortar retail will see a collapse in demand, ecommerce is seeing a significant upswing in specific areas like groceries and everyday home goods.

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Grocery Click & Collect set to take off as home delivery stumbles

Whether it’s panic buying, stockpiling or simply a general surge in demand for groceries, the last fortnight has seen supermarkets struggling to keep the shelves stocked in stores and running out of delivery slots for online grocery shoppers.

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Logistics leaders call for consideration in fight against COVID-19

In a letter on March 19, four signatories (ATA President Chris Spear, FedEx CEO Fred Smith, UPS CEO David Abney and USPS Postmaster General Megan Brennan) wrote to President Trump to ask that the federal government’s response to COVID-19 be carefully considered to ensure that logistics businesses would not be hindered in their task of delivering essential goods.

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Re-use ecommerce platform Loop to launch in the UK

Excess packaging is consistently one of the biggest gripes UK consumers have with ecommerce (and indeed with retail in general). Loop, launched at the World Economic Forum in Davos, aims to help consumers take control by offering some major brands’ products in re-usable packaging. This year Loop will open its UK site for business, stocking products from Nestle, Unilever, P&G and The Body Shop. 

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Grocery ecommerce demand has spiked, and Walmart is mobilising an army

Whether it’s panic buying, stockpiling or simply a general surge in demand for groceries, the last fortnight has seen grocers struggling to keep the shelves stocked in stores and huge pressure on their grocery pickup offerings.

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Returns tech must make employees lives easier in order to improve CX

Most of us now work with technology in some way or another, whether that’s email clients and spreadsheet tools or point-of-sale software and hand scanners. If the tech you use every day is unreliable, awkward, unintuitive or unstable, you absolutely despise it. Worse, you come to hate the parts of your job that require it.

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Customers want to return in stores, so why not make it easy?

Returns are essential to customer loyalty – I’ve already written about how frustrating it is to go through most returns processes, and we know that 95% of shoppers will shop again at retailers where they have an easy and positive returns experience. It turns out that one of the most immediate ways to improve the returns experience is to make sure that ecommerce returns can be sorted out in stores.

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