Let’s get down to the basics before we delve in more advanced tech. What
is a business? An entity that offers a solution (or a set of
solutions/products) to more than one customer. It caters to a defined or
latent need. It offers this ‘value’ and accepts value back as
compensation (money, time, or now, even access to personal info with
permission). What are the elements in play here? There’s a business, a
customer, and a market and customers are making traditional transport
movement obsolete, fast.
A market is essentially a place or platform where the business and customer interact and exchange value.
Businesses look to create awareness for the products among the
right-customers (target audience), make it available to the customer to
try out or buy, put the final product into the hands of the customer,
take feedback and offer after-sales service.
Internal threat:
Some businesses invest heavily in the current ‘way of doing things’ and
discard the probabilities of the same ‘way of doing things’ evolving
over time. We have seen this in businesses getting ‘cocky’ saying they
know what the customers want and how they want it, just because it has
worked for them before. It won’t necessarily work for them in the
future. That’s why some like ‘Toy’s R Us’ fell by the side. Who’s to
blame? No one. That’s the nature of evolution.
As customers and their needs improve, so does the market. How a business
and customer interact and deal with each other, keeps evolving. A
customer has multiple quality products that they can choose from.
Customer needs are not “needs,” they are “demands.”
Businesses have become very good at making the best product, backed by
great promotional campaigns. Also, now the customer has the tools
required to make an intelligent choice about what they want to buy.
There are peer-reviews in blogs and videos for them. In a heavily social
word, word-of-mouth, or what we now call ‘viral’ coverage has made it
very easy for quality products to be recognized. This covers the
awareness.
Customers know what they want, do you?
Customers now know exactly what they want, and they know what everyone
in the market is offering. They are well-prepared to make a wise choice.
Some businesses have reached a saturation point to how much they can
improve their products (as per customer’s needs). No matter how much
they improve, there would be someone else who would do it better and
market themselves more aggressively. Once customers agree that the
competitor’s products are more suited to them, they will simply switch.
External threat:
What businesses considered as their core-differentiator, is becoming
less and less unique. Competitors are closing on market leaders with
their own identical or better products. As for the customer, they see
more and more companies offering similar products and expect price-wars.
Market leaders tend to reach their deep pockets and offer discounts to
push the new-entrant competitors out of the business. This, however,
restricts them to do what they were actually good at, building a product
which evolved faster than how the customer’s need evolved.
Since the new entrants have moved the battle, they can attract external
investment, use it to lay down a long runway for their growth, and keep
eating into the market. Sooner rather than later, more new entrants join
in. They are all attacking the big fish. Then, eventually, the market
opens up with no clear leader. The previous leader would now share the
stage with any one of the new-entrants (that hasn’t burn through their
funds already) themselves. The product differentiators won’t be the same
for long. Businesses must build more than one differentiator to
sustain.
Make it available and convenient for the customer
Beyond the awareness and product quality, there is a very important part
of the market that can create that additional value which makes the
customer stay with a company. The ‘availability’ part. They can build a
lasting differentiator here which would be extremely difficult to
emulate.
Getting it into the hands of the customer at the right time, in the
right manner. The movement of your product has to be perfect. Imagine
going to a fine restaurant. Even though the food might be nice, if it is
just slapped on to a plate and dumped in front of you, next time you
would go to the restaurant which gives you more respect. That’s exactly
the role good transportation practices play in end-customer
satisfaction.
It starts with a delivery promise
Let’s run through a simulation. A customer goes to a portal and selects a
product they like. They place the order and get an option. Do they want
the product the next day or after two-days? They select the next-day.
What was the point of giving the customer this option? They have already
selected the product and probably would pay for it in the next
instance. Why take the extra effort to put the product in their hands
the next day itself?
Here, you are increasing the probability of getting-in on their next
purchase. When they buy again, they would be more likely to come to you.
There’s your differentiation. You just gave the customer the control
over their delivery time window. There are even options where the
customer can pick how they want to receive the product, to be left with a
neighbor, to be gift-wrapped, etc. There’s a lot to say about these
promises and the delight it creates for the customer.
Remember retail ambiance? Malls spent millions creating ‘that’ ideal
ambiance with air conditioning and music to offer that extra delight
which would make the customer come back. Ambiance has been replaced by
the ideal ‘delivery experience’.
Create the highest value for customer, company, and economy
What’s in it for the customer? Faster delivery, more control over the
timelines, and hence, higher value. For them they just got a discount,
and on top of that, they are getting this amazing deal of faster
delivery and other perks.
What’s in it for the company? Higher customer satisfaction and
retention; and creating lasting business differentiation. Another factor
from stationary retail that has evolved is the idea of an impulse buy.
When customers are happier at the time of check-out, with the promise of
getting hold of the product very soon, they are more inclined to buy
large amounts and more frequently. Companies can, not just lengthen
customer lifetime value, but also increase it multifold.
What’s in it for the market or economy? Customers have a higher buying
power than before. When they are delighted by the perceived benefits of
such purchases, they would buy more and support the economy (and
connected businesses) more. There’s also the factor of technology
evolution which goes hand in hand with these interactions. Almost, all
elements of this market are backed by technology. And technology
development directed by businesses (in need of market growth) always
brings in high-levels of innovation.
Delivery promises turn into expectations and then experiences
It’s all well and good, as far as promising a great delivery experience
to the customer goes. Now, the business must fulfill these promises. How
would they ship a product halfway across the country in a day? Those
that win this transportation challenge, win the market.
The secret lies in proper technology intervention and support.
The latest in cloud-based optimization solutions give businesses the
ideal plan on how to best pick and load the product in-time from the
warehouse, dispatch it on-time, track it as it moves through a route
optimized to pass through minimal traffic – avoiding unnecessary delays
and detention, reach the local distribution center, pass on the right
product to the smaller vans quickly, and track the passage through
connected scanning devices.
Now comes the tricky part, there are hundreds of such customers that
requested next day delivery. This part of the distribution leg is called
the last mile. Tons of literature is written about the complexities of
such movement. There are multiple versions of the traveling salesman
problem out there about this same scenario. Manually planning these
complex legs ends with delays, which in turn lead to late or missed
deliveries.
The irony of customer expectations is that now you potentially lost a
customer because of an expectation the customer didn’t set themselves,
but was prompted to do so by you. If you just hadn’t given them an
option and said that the delivery would take two days, then all would be
fine. But then, someone might have offered them a similar product in
faster time and the customer might have gone for it. It’s a dilemma
either way.
How the right technology makes it all fit into place
The only way out is to deliver on the promise every time, without fail. You can do it with the use of the right tech.
Since the last mile problem with multiple constraints, permutations, and
real-time adjustments is too tough for a person to do daily, it can be
put through an algorithm working on artificial intelligence and machine
learning logic combined. This algorithm would suggest the perfect route,
devoid of traffic to go along a delivery schedule which helps reach all
destinations on-time. It would work on a continuously growing set of
location data points that update live. All customer addresses would be
verified in the system and the routes connecting them to the deliveries
nearby would be made as short as possible. This would reduce overall
turnaround time for the local distribution center, saving resource and
time costs. The delivery schedule plan would give them ample idea about
how to balance the incoming load and whether they need more vehicles to
fulfill all deliveries.
Even along the different transportation legs, all moving elements are
connected to a central monitoring system. Vehicle movement, in-transit
product quality, driver behavior, package tracking from warehouse to
distribution center – scanned at all entry-exit points. All this comes
in the domain of what we have come to know as the Internet of Things.
Through intricate and continuous connectivity, businesses can control
all their movements from a single platform.
Such connected transportation, backed with instant notifications and
alerts, gives a high degree of agility to the movement. Businesses can
react to on-ground situations faster. Suppose, there is a vehicle
breakdown, even before the driver calls up the manager, there would a
repair or replacement vehicle on the way. It’s about covering all bases
to ensure that there are no surprises when it comes to putting the
desired product in the hands of the intended customer, on-time.
Technology is more acceptable than ever before. If all this seems
futuristic, it’s not. It’s what’s happening in the world right now. To
sustain in this environment businesses must accept that logistics,
especially last mile optimization, is now a part of their value
proposition to the end-customer.
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