We sat down with our Chief Commercial Officer Darren Kawalsky – a career-long eCommerce expert, passionate about customer experience and how emerging delivery models can solve both retailer and customer pain points.
Darren, you’ve been working in eCommerce for nearly 25 years. How would you characterise the health of the Aussie delivery landscape today?
It’s pretty much a nationwide dinner party topic for most of us! In the last two years we’ve seen an explosion in online shopping habits and volume and also a very compromised workforce throughout lockdowns and illness. If you combine these external market conditions with the innate bias towards pre-existing infrastructure, you’ve got a recipe for disaster, which is playing out in real-time with no real solutions in sight. Traditional carriers are hoping for the best that customer expectations can be met. I’d characterise it as a ‘carrier centric, not customer centric’ industry at present.
What do you mean by pre-existing infrastructure?
Traditional sortation and distribution centres used by the big postal and delivery brands. Big sites in the middle of nowhere which are high cap-ex, and therefore do lock carriers in to a degree. Sortation belts are typically based away from high density areas where deliveries are made. This legacy model was set up to service B2B rather than the modern eCommerce recipient when delivery expectations were much slower. It’s not a good product-market fit for same day requirements in today’s eCommerce age.
Give me a day in the life of a parcel under this traditional infrastructure?
I’ll give you a week in the life, because that’s the sort of timeframe we’re talking about, even for metro deliveries!
Okay, let’s say I’ve bought a new pair of runners online. I’ve checked out, and chosen my delivery option. That sale is communicated from the eCommerce website software to the distribution side of the business, which could be a store, a warehouse or a distribution centre. It’ll send a signal to extract my shoes and prepare them for pick up; and a delivery option will be chosen and paid for.
My shoes will be picked up by a courier, generally as part of a bulk pick up with dozens or hundreds of other items. The courier will take these to the sortation centre, which is generally remote, and could be on the other side of town. The runners are dropped off and wait there for processing and are generally identified, sorted and prepared for end delivery within a few days. Then, they’re allocated to the last-mile driver, who might very likely go back to a suburb close to where the items were picked up from days before! You can see how challenging it would be to offer same-day or even next-day delivery with this type of infrastructure.
And what impact does that have on brands or companies that rely on this infrastructure?
A compromised customer experience is the first thing. We’ve all had a delivery experience that’s below par, with purchases being lost or delivered well outside the promised delivery timeframes. Often the disappointment and frustration is transferred to the brand the customer bought from, resulting in a bad brand experience, lost future sales and poor reviews, when it’s really outside the retailer’s control.
Then there’s the additional resources being wasted on the retailer’s front-line in having to manage it – tracking parcels, handling customer enquiries and eventually complaints, requests for refunds or replacements and responding to reviews.
What does customer focused mean then?
The delivery network is built around the customer and their requirements, specifically for same-day and for full metro coverage.
Doesn’t everyone offer full metro coverage?
You would be surprised with the limitations and the heavily skewed perceptions of coverage areas and what is ‘metro’ versus what is not! Some P2P carriers will deem ‘metro’ to be as little as 7km from the pick up point. Deliver In Person by contrast offers a full edge to edge coverage of the metro location, using Sydney as an example, that’s approximately 50km radius.
How was Deliver In Person designed?
We basically sat down as consumers and thought, what do we need for a modern eCommerce delivery service? The answers were real same-day service that both retailers and recipients could rely upon. And then we built our model to make that happen. The success in the design is apparent in our results – we deliver on our first-attempt more than 98% of the time, and we’ve successfully delivered 100% of our parcels same-day. It’s pretty remarkable when you think about what’s involved – and it’s absolute gold to a retailer to be able to promise that to their customer. I think customers have just become used to expecting that the traditional carriers will ‘get there when they get there’ because they lack alternatives.
What factors have contributed to this success?
I’d say the ability to let the recipient transparently know where the parcel is, and for them to communicate easily with us and the driver to make amendments that suit them. It’s supplying the tools to empower the customer to self-serve if they wish – and today’s modern consumer appreciates their time being valued in this way. Certainly some other carriers offer this, but it’s inconsistent from parcel to parcel, let alone from carrier to carrier!
I think the next key feature is the total flexibility and scalability of the workforce – we work with a combination of salaried employees and independent contractors. A lot of other carriers have tried to compete within the same-day space by tweaking their existing business model, but it’s proved unsustainable. A purpose built model is the best way to succeed in this space, freed from traditional thinking and constraints.
How about customer focus on retailers? How has the model been designed to cater to the needs of business?
To date, competitors in the same-day space have mostly been point to point – so, a single pick up, carrier paid per kilometre, delivered to a single recipient. That’s fine for low volume, local deliveries. But when you’re delivering at scale, metro wide, per kilometre pricing soon becomes exorbitant and the network starts to lag when volumes exceed a low quantity.
We had the benefit of being able to assess the market and truly see the gaps, to create something that truly meets the needs of an eCommerce retailer doing serious volumes. Our hybrid workforce is designed to flex to cater for volumes such as Christmas or Black Friday. The real gem is our sortation model which is mobile and local – rather than locking ourselves into big, remote facilities, we will utilise either locally-placed micro hubs or mobile sortation and then our gig economy employees will efficiently deliver over the last-mile. It’s environmentally friendly, nimble and keeps costs low for the retailer; and can be repositioned, recalibrated and fully optimised to meet customer demand.
At the end of the day, same-day delivery is a super challenging space but it’s been so exciting to solve some of these very entrenched problems for our customers; and see the relief and reassurance that entails when they know their customer experience is in safe hands.