Home Delivery Business

With the surge in shopping through online channels in 2020, online sales have rocketed to doubles and even quadruples directly through a brand's website. Though companies have been happy with the boom, the surge in demand has thrown a multitude of challenges to these companies. Many of these companies are, surprisingly, struggling to deliver the promise of eCommerce to their customers – putting them at risk of alienating customers who have to fill the digital storage space. The last-mile delivery experience has now become a defining strategic differentiator to a business. With customers bound on the convenience delivered by last-mile delivery, the consumer market has made it clear that they would choose a retailer that offers the fastest and most reliable delivery service when given an option.

With people buying more online and online channels opted by customers who have never purchased online, it is evident that some changes are here to stay with the eCommerce market. Retailers must respond quickly to the changes in the market and offer services that meet the expectations of their customers or risk losing out on market share. Digital transformation is the key differentiator here and brings about strategic shifts in demand and supply chain models, returns, and cross-border eCommerce and pivots changes to new business models that reduce costs and realise growth. On the other hand, the home-delivery model provides a hassle-free shopping experience to customers by saving time and effort. Home-delivery models deliver convenience across every consumer touchpoint. Here we list down five convenience opportunities put forth by home-delivery business models that save time and effort:

Decision Convenience – The priority is on the user's experience around which decisions are made to improve the business ( https://www.yourretailcoach.africa/services/business-plan-development/ ). Customers can view ratings and reviews on retailers through delivery apps and decide where they want to order. Customers can thus choose to order from retailers that promise a consistent, fast, and reliable delivery system.

Access Convenience- Home delivery apps are easily accessible and provide an excellent shopping experience with real-time delivery tracking. Apps are easy to access from anywhere, enabling the customers to order from anywhere at any time.

Transaction Convenience – With multiple payment options, it offers fast and easy transactions.

Benefit Convenience – Order from more than one retailer simultaneously, order for far-away friends or family, get it all delivered in time without any hassle or worry.

Post-benefit Convenience – Saving your address, payment details, and favourite retailers makes the transactions even smooth for the next purchase.

Challenges of home delivery business

With the ever-changing market base and overflowing opportunities, home delivery services are currently leading the marketplace. Businesses are entering the delivery market with higher enthusiasm and innovative effort, making the market even more competitive and challenging for the existing players to capture. In the race to capture the biggest portion of the demanding market scenario, there is an end to it if the business is unable to maintain the demand and make available the supply and logistics to cater to the demand of the market. It all comes down to managing the logistics, people, scheduling, vehicle management, just-in-time deliveries, in addition to good customer service. We put down here some of the key challenges faced by the home-delivery business:

Shifting Consumer Preferences

The primary objective of home delivery businesses is to provide the best possible value to customers at the least possible cost. However, home-delivery retailers have accentuated the marketing game to a level where customers are spoilt for choice even as competition grows. This is resulting in an unstable customer base, affecting brand loyalty.

High Volume and Low-Profit margins

Even though the volume of orders has been doubling and tripling over the last few years, the home-delivery business is yet to yield profits. The last mile delivery or home delivery accounts for more than half of the overall shipping costs and is thereby the most expensive part of the retailing business. Delivery driver’s in-home delivery business usually carries many small packages with unique destination spots. More stops lead to more time on the road and hence more unproductive time. With the volume of demand increasing, the delivery complexities have grown substantially, thus making the home delivery system more inefficient. Along with this, inflation and revenue deficits of their partners have put more pressure on the profit margins affecting the overall profitability of the business. The best way to reduce home delivery costs is to invest in technology that optimises the routes, communicates with customers, and uses real-time data to make informed decisions.

Logistics Dilemma

There are a couple of logistics challenges faced by home-delivery retailers, especially when it deals with food:

· Fencing on a coverage area
· Determining vehicles needed
· Challenges with perishable food items when delivering to far-away destinations

Retailers with home delivery ( https://www.yourretailcoach.africa/dark-stores ) should consider these as parameters while deciding on the logistic model. Proper resource management methods and integration of technology with location tracker, BOPIS (Buy Online, Pick up in Store), delivery routing, order scheduling, etc. Next-generation supply chain capabilities that predominantly leverage digital technologies, advanced analytics, and enable automation help to improve inventory visibility and drive down logistics costs.

Inefficient order management

Retailing with a home delivery option is a business that needs to process a massive volume of orders. Hence, it is vital to implement top-notch services from order processing to delivery. Managing bulk orders manually can be time-consuming and can affect the time to deliver the order as well as packaging and quality.

Managing Customer Expectations

Customer satisfaction is the ultimate by-product of delivering good quality services. The responsibility of customer satisfaction lies not only with the delivery partners alone but also with the people working at the origin, the retailer staff. The challenge is to fill the gap through effective communication between the delivery partners who directly interact with the customers and the retail management who need to work together to meet the expectations of the customer.

Tracking drivers and orders

Tracking is crucial to home delivery management as it gives visibility to both delivery partners and customers about the time required to deliver the order and the real-time update on the order. This would keep the customers calm as they are not left in oblivion about the status of the order. Tracking the drivers would ensure timely delivery and help be notified if the order is delayed due to unforeseen circumstances.

In addition to an increasingly competitive marketplace, home delivery is challenged by customer demands, driver shortages, and adverse economic conditions caused by rising fuel prices and changing legislation. This requires the companies to effectively manage pickup and delivery processes, including customer care, driver, vehicle route management, and other service offerings.

Key Essentials for Success of Home-Delivery Business

Strong SOP's

To effectively control the logistics-related costs and deliver customer expectations, companies must develop a list of best practices or SOP's and integrate them into the business processes ( https://www.yourretailcoach.africa/services/business-model-development/ ) . An effective SOP would help streamline the supply chain and delivery processes, establish a competitive advantage and generate new and repeat sales. Once an SOP ( https://www.yourretailcoach.africa/services/sop-development/ ) is put in place, it establishes a framework through which gaps in the process can be identified, eliminate any operational complexity, and improve customer service while lowering operational costs. When a solid foundation for the operational practices is established and technology used to complement these practices, the real rewards of the ever-demanding market can be cached.

Strong IT systems

Integrating technology into the home delivery business can help streamline the logistics operations, optimise the process, reduce costs and help provide a wholesome customer experience. Home delivery technology could include autonomous robots, drones, and trucks to big data analytics, sensors, and blockchain with the aim of eliminating the operational complexities that cause delays and waste money along the delivery process. Some of how technology can be used to optimise the delivery process are:

-> Route Optimization – Plotting the fastest route for delivery drives to get the maximum number of packages to the destination hub with the shortest time can significantly affect the delivery costs and time.
-> Improve order accuracy and timelines – Rapid fulfillments through auto-dispatching and driver allocation can significantly reduce service time and labour costs.
-> Increases visibility for drivers and customers – real-time location tracking, integrated communication capabilities bridge the gap between customers and delivery partners, and as a result improve the customer experience.
-> Transparency – Delivery apps with location tracking facilities provide transparency.
-> Measure's efficiency and accountability – Predictive analytics helps companies to identify gaps and act on opportunities to improve. Key operational metrics can be used to identify operational inefficiencies in the delivery process.

A team aligned to SOP's

Delivery executives and customer service agents are most usually the faces of the retail organisation; therefore, they are thoroughly informed and updated on the standard operating procedures and guidelines associated with customer interaction. A well-written SOP ensures that all the staff and delivery partners are in alignment with the procedures and process of running the home-delivery service. This also ensures that top-notch services are being provided consistently, which will, in turn, ensure brand loyalty and generate more sales. A team aligned to SOP's is required to constantly update themselves of the latest SOP's and disseminate them across the delivery system and evaluate how each new update or solution can benefit the organisation.

Strong performance management system

Effective performance management for home delivery services helps cut down costs, with complexities, without sacrificing quality and service. The continuous performance management cycle will ensure continuous learning and competency, making sure the solution is tuned for optimal performance and improving delivery productivity and customer experience. Collaborating with an expert online business consultant in South Africa could help build a differentiated system for performance management, in addition to other key benefits.

If you are a brand looking to establish your home-delivery service or are overwhelmed with challenges in the existing service in the competitive environment, consider partnering with management consulting services or retail consulting services in Africa like YRC. YRC Retail Consultant ( https://www.yourretailcoach.africa/ ) ensures minimalistic manual intervention in the home delivery service system and helps build human-centric solutions that navigate the digital shopping landscape. With the enormous experience, YRC has accumulated over the years by working with international eCommerce brands in and out of the region, YRC has evolved as the single-point contact for getting the entire brand up & running for many high impact strategic projects. Surpassing the disruption through their end-to-end services, YRC challenges the current industry obstacles in home delivery management and finds key solutions for their clients in the African market, consolidating their future success.
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YRC is a Management Consulting Firm with its presence across India & Africa.
We help our clients build robust management systems which shall help to reduce their involvement in daily operations. We act as "Growth Partners" to our clients and help our clients grow in an organised manner. We have served more than 100 brands till date and are associated with 85% of them.

This release was published on openPR.