Small business will continue to be challenged by logistics in 2019 as more companies find their parcel delivery services nibble at their profit margins.
This is both a B2C and a B2B story. Businesses across all sectors are running on increasingly tight timeframes with customers who are expecting more from their deliveries but don’t necessarily want to pay more for them.
Aside from retail, businesses in diverse industries such as packaging, catering supplies, automotive parts, manufacturing, and building supplies must be more responsive in a more competitive environment.
If your small business wants more control over its logistics in 2019, it’s time to address these key issues.
Customers expect more of their deliveries: Research shows the delivery aspect of a transaction is having more influence on business: Capgemini found customers who are satisfied with their delivery experience are more likely to increase their purchase levels; they also found 48 per cent of dissatisfied customers intend to stop purchasing from a poor performing supplier. Customers are expecting more, expect good communication and expect you to deliver when promised.
Many small businesses can get by on AusPost. But businesses shipping unusual, large, or fragile items, with frequent deadlines, need something more sophisticated.
Major generational shift: By 2020, Generation Z and millennials are expected to make up 59 per cent of the global workforce, and by 2020, generation Z will make up 40 per cent of the world’s consumers.
This is a big opportunity for business which can win them over. These generations have grown up with instant gratification, with potentially big implications on logistics. Yet much about the Gen Z/Millennial cohort can surprise. For example, on product delivery, KPMG says customer experience will overtake price and product as key brand differentiators.
Old approaches to delivery, with vague timelines and little communication, must change to satisfy Gen Z.
Digitisation: Transport fleets and parcels have long been tracked (though some firms are still lagging behind) via telematics technology. But digitisation is increasingly integrating throughout businesses, via the Internet of Things and tracking technology, with potential to make the supply chain more efficient, transparent, and safe.
Not all small businesses need to go “all in” on digitisation but it’s important to explore ways technology may help create more transparent, responsive delivery transport fleets. Small business may benefit from delivery tracking which provides proof of delivery and aligns with your inventory management and customer service.
Efficiency now more urgent: Research shows industries such as retail continue to absorb much of their delivery costs, which eat into profit margins. Customers understandably want cheap or free delivery yet delivery transport is notoriously plagued by hidden costs. Something has to give.
Hidden delivery costs easily get away from small business, making it crucial to keep asking questions. Start by looking at your delivery transport mix and aim to bring the myriad costs out of hiding. Many small businesses blend owned and outsourced transport solutions – is the mix right? Efficiency does not mean sacrificing responsiveness – it’s possible to maintain performance while managing costs.
Driverless cars and drone deliveries: Discussion around how driverless cars and drones will transform logistics may intensify in 2019, but most small businesses need not worry too much about this just now. Driverless trucks and cars in urban areas are still some years off, and there has been little regulatory or ethical discussion about them.
Instead of looking too far into the future, ask the hard questions about what you can achieve today.
Walter Scremin, General Manager, Ontime Delivery Solution