After a decade of waiting for shipping, the same-day delivery model is exciting. However, it’s being largely played as a fulfillment mechanism. It’s also being considered as a model where retailers can potentially charge a premium for instant delivery – although I think that’ll not be feasible in the long term Uber, Google, eBay and Amazon are getting into this model with Amazon even bringing in the drones!
Given all this, the general assumption is that it’s a necessary play to stay competitive but it does not offer any new revenue models.
Nothing could be further from the truth.
Same-day delivery opens up exciting new possibilities for how marketing and selling is done. For the first time (or at least from a greater variety of sources), immediate gratification is possible for consumers. Whether its food, or a nice evening jacket, or planning a candlelight dinner, customers just need to be shown an idea for them to make it happen. The handcuffs that prevented an idea from realizing itself into experiences are now removed. The model replaces the inertia between thought and action.
So what can retailers do to turn this development into exceptional customer engagement scenarios?
Defining new customer engagement models
Sending a promotion and waiting for customers to land up are gone. The opportunity now is to create moments that lead to active and easy to execute engagements. What are those experiences that will result in an immediate and instant request for fulfillment? It’s not about the product any more. Its about the product being in the right place at the right time. No more waiting for customers to select what they want. You are taking experiences to the customers. More visual, and more interest based is the key with real time decisions and offers based on what’s going on with the customers lives. Push based models will take a bigger seat in terms of content and social marketing. You want to keep up a channel with a steady influx of ideas.
Defining new interaction models
The current user interface for shopping is inadequate to tap into this exciting possibility – both online and offline. I am amazed by how wasteful the interface of drop down menus and display of 100’s of largely similar items are. And they have been more or less the same for almost 20 years. The new interactions will be more contextual, more mobile, more social and more action oriented. They won’t be about dumping data on the consumers, they’ll be about suggestions and recommendations.
Building contextual analytical capabilities
The traditional analytical capabilities are not enough. Predicting customer behavior based on past transactions is only half the battle won. What is needed is predicting immediate future behavior. The variables that go into this kind of analysis are about interests, profiles, motivations and about experiences that will be held tight to in the future. Most of those experiences will be determined by contextual and/or emotional variables. Retailers have always treated a shopper in isolation. They need to start drawing correlations with a shopper’s context.
Implementing new models for the supply chain
The experience based customer engagement models are different from the transaction based ones. The supply chain cannot follow the same replenishment based models as below. Instead the focus will be on ensuring that the analytical driven experiences are met well every time. That will mean that inventory is more distributed, and more tightly linked to demographic interests and local happenings.
An ecosystem to make
Retailers cannot be trying to tackle this on their own. An ecosystem of partners in the local context will be the key to winning this in the long term. The easiest way to connect with consumers is either via the social or local route. The new model is a fast, local one, and will require an equally responsive network to meet the challenge. Only an ecosystem can help meet the exciting potential. Same-day delivery is much, much more than just a mechanism to stay competitive.
* image from barnesandnoble.com (http://www.barnesandnoble.com/help/cds2.asp?pid=23252)