DC Velocity - February 2019

16 DC VELOCITY FEBRUARY 2019 www.dcvelocity.com newsworthy

Iam Robotics, a manufacturer of autonomous robotic material handling solutions, has partnered with DB Schenker, a global logistics services provider, to integrate piece-picking robots into Schenker’s warehousing and fulfillment operations. … Synergy NA Inc., the parent of the Snapfulfil cloud-based warehouse management system, has launched a partnership with Celigo, an integration platform-as-a-service (iPaaS) provider for business and technical users. The partnership gives Snapfulfil customers greater flexibility in integrating systems with NetSuite. … Aircargo carrier National Airlines has chosen Descartes Systems Group’s Velocity Mail solution to simplify its mail transportation tracking activities worldwide. … ShipStation, a Web-based e-commerce shipping solution, has partnered with Sezzle, a U.S.-based “shop now, pay later” payment platform.

alliances

USMCA, pointing to new rules on e-commerce and the digital economy as an example— issues that were not addressed when NAFTA took effect more than 20 years ago. But she said RILA and others are still watching the USMCA carefully as it makes its way through the approval process. New rules-of-origin requirements may affect some retailers, for instance, and lawmakers may try and make changes as the proposal moves through Congress, she said.

Adding to the level of uncertainty is the divided
government and its potential inability to move
anything along in the 116th Congress. Jensen and
Quach said infrastrucure is one area that usually
bucks that trend and that may gain bipartisan sup-
port in the year ahead. Jensen said there are whis-
pers about an infrastructure bill in the works and
that RILA will continue efforts to support infra-
strucure updates to the nation’s ports, highways,
railroads, and bridges. “Transportation has been
very bipartisan, and we’ve been at the forefront
advocating [for infrastructure improvements],”
he said. “Unfortunately, the last Congress was not
able to get anything off the ground. But this is one
of the areas you may see the divided government
come together [this year].”
In the race to provide ever-faster last-mile delivery service
without breaking the bank, most retailers run up against a
hard truth: As much as consumers want the service, they don’t
want to pay for it, according to a survey by Capgemini.

Nowhere is that dichotomy more stark than in the grocery business, a sector where delivery service has catapulted from fringe benefit to table stakes in just 18 months, Capgemini Vice President Shannon Warner said in a breakfast session at the National Retail Federation’s NRF Big Show conference, held in New York last month. At the session, Warner presented the results of the survey, The last-mile delivery challenge: Giving retail and consumer product customers a superior delivery experience without impacting profitability. Conducted by Capgemini’s research arm, the study was based on responses from over 2,870 consumers in addition to 500 supply chain executives, entrepreneurs, and industry leaders.

Consumer demand for speedy grocery delivery is hot— 55 percent of customers say offering two-hour deliveries would increase their loyalty—but it is not being met by grocers, only 19 percent of which currently provide that service, the survey found. In fact, 59 percent of firms said they have a delivery time frame of more than three days.

The disconnect between consumers’ strong interest in speedy delivery services and their reluctance to pay for them has retailers on the ropes. Organizations are currently charging customers only 80 percent of the overall delivery cost, and that likely won’t change anytime soon. Only 1 percent of customers are willing to absorb the total cost incurred for last-mile deliveries, the survey showed.

The solution to this dilemma may lie in retailers’ finding “nontraditional” ways of recouping the costs of last-mile delivery, Warner said. Rather than struggling to provide delivery service at a profit, firms could simply provide it at cost or even at a loss, and make back the money elsewhere, she said. Citing a classic example, she said many grocers sell Thanksgiving turkeys at a loss because they know that holiday shoppers who come in for a turkey are likely to fill their carts with high-er-margin items.

Applied on a bigger scale, grocery retailers could build profits by applying subscription models, installing automated material handling equipment, applying process engineering, and offering premium “white glove” services, Capgemini found. One example of this strategy can be found in the British grocery chain Waitrose, which charges premium fees for “While you’re away” food deliveries made through keyless entry to customers’ homes, and through “Wine tasting at home” delivery provided by trained sommeliers who offer educational services as well as simple delivery, according to Capgemini.