Amazon is a monster,
I’ve been following a lot of there developments recently, from aerial and ground drones to automating warehouses but what i want to talk about is amazon prime and 1 hour delivery and a way retailers could actually fight back using an asset amazon doesn’t have.
Our high street brands and local shops have really felt the weight of e-commerce in recent years, 2015 saw online sales surpass retail sales and some high street brands have gone under. Brick and mortar shops have increasingly higher costs, like rent and business rates and simply can’t compete with online prices, which have one or two massive central fulfilment centres which service the whole domestic market from there. but what if a retailers weakness could be it’s greatest asset?
The disadvantage of having a centralised warehouse is delivery times. Next day delivery is increasingly becoming the norm and is doable via a centralised model (Although the last mile is becoming increasingly more difficult in urban centres, however congestion/slow delivery is another post) This is how it would look at the moment, generally amazon will deliver directly from it’s e-fulfilment warehouse skipping the local depot part.
Increasingly customers are demanding same day or even 1 hour delivery from clicking and purchasing. This isn’t possible from a central e-fulfilment warehouse generally. Amazon is rolling out 1 hour and 2 hour delivery times via its prime service to postcodes it has large centres nearby, such as London, Birmingham etc but at present it isn’t able to achieve it nation wide. Why? because it doesn’t have depots close enough to other cities/areas. The more centres amazon opens to service the 1 hour window, the more it becomes like a retailer with multiple sites.
My point is simply, retailers have multiple sites and the infrastructure to offer 1 hour delivery straight from there stores. My question is why haven’t they? there right in the heart of cites and well placed logistically to deliver to a densely populated wide area. Well some have to be fair, sainsburys is now experimenting with 1 hour delivery to compete with amazon fresh, wickes has teamed up with city sprint to offer same day delivery with one hour delivery slots and software companies like shutl exist to try and fill the gap. I feel cycle logistics is ideally placed to solve this and do it more cost effectively. I’ve been testing shutl’s prices in Oxford this evening with some postcodes and little to say it ain’t cheap, i’d encourage you to have a quick play on it too but there idea/ what i’m discuss is laid out below
Where about 50% more cost effective vs whoever shutl works with in Oxford (i’d assume city sprint, who only use vans) and we have attempted to contact them to be included as an option but it’s pretty impossible to get a response so we’re just going to look at our own version.
We’re well placed to work in dense urban environments, where faster, more cost effective and have advantages like parking anywhere/ cycle lane network using cargo bikes. If it’s too heavy or too big we can still pass the work on but I think if cycle logistics had a good software platform to integrate into retailers with ease, it could be a big win for retailers and customers and be a big push back against amazon, short term at least and cash in on what amazon can’t provide but customers really want
Little to say we’re working on this project at the moment and hope to get it of the ground in the near future.