Crowdsourced delivery to overcome the complex last-mile

June 16, 2020
StoreShippers - Nienke van Meekeren
June 16, 2020
StoreShippers - Nienke van Meekeren

As the popularity of online shopping grows and competition within the sector increases, the online shopping landscape is shifting to a more dynamic environment that is strongly influenced by consumers. Over the years, online retailers have learned that last-mile services are a key differentiator from their competitors. To improve their logistics competitiveness, online retailers have experimented with new innovative delivery systems to provide speedy and efficient delivery. One such systems is crowdsourced delivery. Let’s have a look at what crowdsourced delivery is and how this helps to overcome the complex last-mile.

The last-mile in the most time-consuming and the most expensive part of the shipping process

The challenge
Nowadays, consumers can choose from numerous providers of the same product. As a result, consumers are increasingly demanding towards retailers, especially in terms of delivery speed, costs and flexibility. They want things free and fast. Ecommerce giant Amazon made that table stakes for everybody. This means that consumers are now expecting services that they weren’t expecting before and on which retailers weren’t build. This makes it hard for retailers to compete

Added to this is the inefficiency of the last-mile. This last leg of the supply chain is often the most time-consuming and the most expensive part of the shipping process, comprising up to 41% of the total cost of the delivery. This is because there are typically multiple stops along a delivery route, which slow down the delivery due to the long distances between stops in rural areas and traffic congestion in urban areas.

What is crowdsourced delivery?
In a race to meet consumers’ growing demand for faster and cheaper delivery and outsmart the competition, more and more retailers turn to crowdsourced delivery. Crowdsourced delivery is a convenient method of fulfilment that leverages networks of local couriers to deliver packages quickly from stores or warehouses to consumers’ destinations.

The consumer places an online order and this order is collected and prepared for shipment. Delivery is then assigned to a network-connected courier, who picks up the package and delivers it to the consumers’ door at a time that is most convenient for the consumer. In many cases, this delivery is carried out by bicycle or small electric car.

Why crowdsourced delivery?
The big advantage of crowdsourced delivery is the speed with which products can be delivered to the consumers’ home. Because products are picked up from the store or warehouse by a courier immediately after ordering, consumers can often receive their order within a few hours of placing the order. The model is particularly successful in urban areas, where there are sufficient couriers and sufficient customers conducting online purchases.

In addition, crowdsourced delivery reduces the number of delivery attempts. The better the delivery time can be tailored to the needs of the recipient, the less likely the deliverer and recipient will miss each other. Crowdsourced delivery allows consumers to indicate when they want to receive the product. As a result, the product is in many cases delivered at the first delivery attempt. This avoids the extra costs and time associated with an additional delivery attempt.

Lastly, the crowdsourced model offers low start-up costs, asset-light operations, lower operating costs and improved customer experiences.

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Blog by: Nienke van Meekeren
Sources used: McKinsey&Company, Business Insider, Capgemini
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