November 17, 2022
In retail, there are so many buzzwords and new technologies promising to revolutionise ecommerce.
But now is a great time to separate the wheat from the chaff, as the saying goes.
In the current economic climate, some retailers may question where best to place their spend. But whatever macroeconomic developments we see in the near future, delivery remains the future of retail and I challenge anyone to disagree.
So let me take this moment to share some thoughts on why now is the time for retailers to focus on how they are managing their delivery operations, particularly in the last mile.
First a bit of background… In 2008, when Lehman fell, I was working at Mazda Logistics Europe. As you may remember, the automotive industry was hit hard.
Suddenly there was a new law in town. Only IT projects with sufficiently high and provable ROI were considered for a go. Everything else was reshuffled or simply cancelled. This was a hard time for project managers. When their projects are cancelled, most PMs don’t last long on the bench.
But I was happy. Because suddenly only projects that made *sense* were passing validation. It was a good time to cut the crap and get shit done. IT was laser focused on delivering tangible results at a faster pace.
So back to retail. As I said at the top, Delivery is the future of retail because…
According to stats from Aramex, ecommerce will account for more than a third of total retail spending in 2022, so that just further reiterates the point that home delivery isn’t going anywhere. Quite the opposite in fact. It’ll keep growing its slice of the retail pie.
Of course, this isn’t a scoop. It’s been the trend for 20 years. But what has changed is the IT cost of offering outstanding customer delivery experiences “off the shelf” (COTS). These solutions have emerged and driven ROI through the roof!
So here’s a truth bomb…
**High-cost-low-quality home built solutions developed as a result of “not-invented-here” syndrome should now be considered SERIOUS mismanagement.**
This approach is hardly ever justifiable. You may as well develop a new ERP system, which would be an equally good use of company resources!
The reason these “home” solutions suffer is because they focus only on today’s problems. But tomorrow is not today. Perhaps drones won’t be dropping fridges in your backyard anytime soon, but agility, flexibility and continuous improvement are essential traits to future proofing a solution.
Remember: The I in ROI is almost always underestimated, and greatly.
Your 10 developers, for a team of 15 in total, will easily cost you EUR 1m per year. Anything below that is not realistic … and for what outcome?
Simply don’t believe the slides.