I continue to be amazed at the number of articles being written by so-called experts claiming that delivery speed isn’t important to customers. The individuals quoted in the articles are making the same mistake – they assume all customers are alike. That is false.
The second mistake is ignoring the impact that AI and other technologies will have on the ability of customers to view more products and thus easily order even more products.
The third mistake is failing to understand that customer behavior is changing. Instead of wanting everything they order delivered to their home, customers are going to want much of what they order delivered to where they are. This is why I began using the phrase, “deliver to people, not places” several years ago.
The result of what I just described is that it is going to cause retailers and brands to accelerate the velocity of their supply chains and logistics networks to meet the increased demand for products and speed.
In my opinion, the only way to meet the expectations of customers will be through the use of hyperlocal logistics. A proximity-based logistical strategy that enables companies to deliver their goods in as little as just a few hours, or in some cases, even in the same moment.
At Amazon, I focused on designing strategies that massively increased speed to customers. My preferred method was the use of forward-deployed inventory strategically placed in locations throughout cities and suburbs – hyperlocal by another name.
There are two key ingredients to deploying hyperlocal logistics successfully; proximity and automation. The objective is to position needed items as close as possible to those who need them and to automate manual processes in order to promote access. By eliminating distances and cutting retrieval processes, companies are able to save enormous time and gain operational speed.
What separates my strategy for hyper-local logistics from other models is 24-hour order fulfillment. Since hyperlocal facilities are small, they can easily be depleted of inventory. This is why I believe incorporating stores into a hyperlocal strategy is a must-have. When a customer places an order, the first option for fulfilling the order is a store followed by a hyperlocal fulfillment center – whatever is closest to the customer – proximity.
A key requirement for hyperlocal logistics to succeed is utilizing real-time analytics to track customer ordering behavior and inventory. The primary question involving inventory is answering how much is available and where is it located. In addition, analytics will determine how quickly to replenish inventory to ensure a sale can be made.
Hyperlocal logistics is already in use in India and it is expanding worldwide. Gradually and the suddenly, hyperlocal logistics will be the rage in the U.S.
Coupang, BORZO, and 1MRobotics are the leading hyperlocal logistics companies.
