Insights

Are We Missing the Real Revolution?

The pace and depth of change has seldom been as fast as at present!  Seemingly every day we see new developments in the field of e-commerce; from customer engagement via AI chatbots to same day delivery, from voice technology to fingerprint payments, the e-commerce market is booming.

But underneath it’s the physical infrastructure which is propping up the latest e-comm dream.  After all, how excited would you be, when you asked Alexa to order your outfit, if you knew it took two weeks to arrive?

Whilst we’re all looking towards to the next tech trend in the online shopping revolution, perhaps we should be asking whether we’re missing another, quieter one –  that of supply chain.

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It’s commonly accepted that the internet has transformed the world as we know it.

Cyber Rules’, by Thomas Siebel and Pat House, doesn’t pull any punches when it talks about the impact of the world wide web.  They liken it to the invention of writing, the adoption of the Arabic zero and even the arrival of a metal currency in the eastern Mediterranean several thousands years ago.  In short, they tell us, it’s quite a game changer.

The retail sector is one of the most adaptive of the sectors due to its closeness to customers and is navigating its way (with greater or lesser success) through the e-comm revolution.  The UK has responded eagerly, with average household spend topping the charts at the highest in the world.

But is the explosion of online shopping only down to the online shop fronts, the AI and payment tech, the voice tech, all the customer-facing elements?  Or is there more to it than that?

Malcolm Gladwell wrote an article entitled ‘Clicks and Mortar’, which was first published in The New Yorker in back in 1999.  In it he was already questioning the cornerstone of the internet shopping boom.  “Is it possible that, once again, we’ve been dazzled by the [internet] and forgotten the roads?” he writes.

Online shopping is growing, and so deliveries are growing at the same rate.  According to Doddle, the parcel collection network, almost one in 10 people receive a daily delivery to their workplace.

And why wouldn’t we?  We can take our pick from next day delivery, same day delivery, within the hour delivery; there are even couriers who wait at your door so you can try on your order and take back what you don’t want.   Why brave the queues in the high street when you’re being offered such convenience?

What often isn’t considered, however, is that these choices aren’t possible without a total transformation of the delivery infrastructure.  The forecasting, demand planning and warehouse management; the essential nuts and bolts that keep the wheels turning and the deliveries arriving on time.

“Double-parked trucks, red brake lights and cardboard boxes littering the sidewalk: this is what the growth of online shopping looks like ….”

The explosion in online shopping has had a particular impact on urban roads.  Unanticipated, time-sensitive deliveries are more difficult to amalgamate into fewer deliveries, leading to more traffic, more pollution, and more jams.  Cutting through the urban sprawl is increasingly painful and difficult for the delivery drivers.

The usual ways of delivering goods to the customer are now no longer straightforward – or even viable – when operating in dense urban areas where lorries are stuck in endless traffic jams but next day delivery is expected as standard.

An earlier CMG blog revealed that in 2016, roughly 25,000 Large Goods Vehicles (LGVs) made a trip across the heavily trafficked streets of central London, and on average less than 60% were full, with 20-25% of them being completely empty.

A potential solution may be found in creative collaborations between retailers and suppliers and even between competitors, amalgamating deliveries to make the most of existing space, instead of launching new vehicles on the road.

Inventive thinking and abandoning the certainties of yesterday will result in a more agile supply chain, will begin to stablise urban traffic and will allow us to build for the ecomm of the future.  What is certain, however, is that supply chain advances need to keep up with front-end advances to keep the wheels turning on the e-comm revolution.

Further Reading

1 – Cyber Rules – Strategies for Excelling at E-Business

2 – Average household spend topping the charts

3 – Clicks & Mortar, Malcolm Gladwell

4 – A courier that waits at your door

5 – Crowded streets:  cities face a surge in online deliveries

6 – CMG Blog – The Infrastructure Squeeze

Bryony Graham
the authorBryony Graham

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