John Taylor, MD at Geoplan, reflects on what retailers can learn from the Christmas period and how geospatial technology can make it easier to manage
With the festive season over, retailers are beginning to share their sales figures for the 2019 Christmas period. Next reported a 15.3% rise in online sales, while Mountain Warehouse boasted a 21.6% increase.
This isn’t ground-breaking news; sales always spike around this time of year. But, as it’s hard to predict the exact volume of those sales increases, we don’t know just how much pressure will be put on retailers and logistics companies – who will need to respond, whatever the demand.
This uncertainty makes it difficult to calculate the exact number of orders and understand where delivery drivers need to be and by when. This can leave logistic operators facing an uphill battle from the start.
This is only accentuated by the rapidly growing demand for faster delivery options – with next-day delivery choices becoming the standard. Fast fashion sites, such as ASOS, and internet giants, such as Amazon, are providing this and competing retailers can’t afford not to follow suit. These calls for ever increasing levels of convenience are putting a heavy strain on delivery and logistics operations, without the resources to cope.
There are ways to ease the delivery pains, however – and these are also helping to offer new solutions that will help to manage consumer demand during busy periods, like Christmas.
Coping with those calls for convenience
Those increasing calls for greater consumer convenience certainly require an enhanced toolkit. This is vital when handling higher levels of expectation that can include customers wanting parcels delivered on the same day or within a designated delivery time slot of their choosing, which can be a short as 15 minutes. To make matters even tougher for logistic operators, consumers may also want to change their drop-off location on the day, even when the parcel is out for delivery.
We are now living in such a fast-paced world that this level of convenience is often viewed as a key selling point. It can tie logistics operators in knots if they are not careful, with grave potential consequences for businesses when resources are stretched thin.
The fear that they won’t be able to cope at busy times will often lead operations managers to hire expensive agency staff and additional fleet vehicles as a precaution. This additional outlay can add huge costs, and negatively impact the quality of service and profits.
Right tools: right response
You can, however, start to unlock more efficient ways of working by using geospatial technology to optimise workloads and calculate routes. This can lighten the load and save operators a significant amount of money in the process.
As with any system, the better the information you put in, the better the output. It pays, therefore, to adopt tools and support services that can incorporate the detailed real-world feedback that drivers can give. This could be as simple as noting a particular gate to use when dropping parcels off at a specific address. When you add all these incremental gains to those more efficient workload and routing calculations, the accumulative time-saving effects can be substantial.
These tools really come into their own, however, when customers change the delivery address on the day of delivery. Powerful algorithms can recalculate routes almost instantly, allowing you to manage alterations quickly. This can also provide significant flexibility when managing a workforce already out in the field.
For example, adopting a demand responsive matrix (DRM) will allow logistics managers to move away from rigid delivery areas by allowing drivers to crisscross each other’s territories. A DRM can do this as it takes a variety of factors into consideration – such as driver skill set, current vanload, van size and shift times – to make the appropriate calculations.
Better managing consumer demand
While having the correct tools and systems is hugely beneficial when trying to survive peak workload, another way to cope is to incentivise consumers into choosing more manageable options.
We’ve seen this done through pricing, of course – with free options provided to more accommodating customers. But we can also offer consumers the option to choose more environmentally friendly options that can help us to avoid sending out vans half full.
Geospatial technology is helping companies to offer these “green delivery days” as an option to customers. By clicking this option, customers will be choosing delivery days when delivery vans will be loaded to maximum capacity and they will, therefore, help reduce the number of vehicles out on the roads – which will also reduce the distance travelled, cut fuel consumption and curtail CO2 emissions.
This ethical alternative will also help to ease the consumer’s conscience and leave them feeling better about their purchasing choices. From the logistics perspective, it will take a strain off operations and reduce the extra vans and drivers needed.
Major shopping periods, such as Christmas, will always create headaches for logistics operations but with the right tools, and by providing greener options, we can relieve the pressure and make the whole process better for everyone.