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Future of Pick up and Delivery Business

By Akshat Bansal 10th May 2018

In the distributed economic environment, enterprises between different industries are now interconnected. Logistics companies became the source of communication among different companies and industries. Enterprises can either outsource the pick up and delivery services or can form in-house team. Large chunk of sales revenue goes into handling of logistics including delivery costs. Pick up and delivery businesses are trying hard to optimize the delivery and operation costs. Inefficient planning can result into high inventory carrying cost, late delivery or damage of goods.

Different delivery options

With increase in customer expectation, companies recognises last mile delivery service as a differentiation point. With delivery of goods at the same day the order is placed, customers preference shifted to same day delivery. Furthermore customers are ready to pay a little extra cost for same day delivery. According to McKinsey report, around 70% customers still prefer the cheapest option of delivery. 23% of customers are adopting same day delivery option at a little extra cost. The trend is expected to shift to instant delivery of product in couple of hours. However major drawback is unavailability of instant and same day delivery option in rural areas.

For grocery and medicine delivery, customers prefer instant delivery instead of same day delivery. In fact for majority of customers, price is the main factor for deciding the delivery option. For food delivery business, instant delivery is the only option. Food delivery business has totally different operation chain compared to other delivery businesses. Instant delivery of prepared food is available to customer in a fixed geography area. Instant delivery of products is dependent of extra price for instant delivery rather than lack of fulfilment of customer demands.

Future of pick up and delivery business

Delivery of goods through drones at a minimal increase in delivery cost enhance the efficiency for same day and instant delivery. However more than 50% customers still decide delivery option based on pricing and decide the cheapest delivery option. Delivery of goods through drones can be a solution for instant and same day delivery option. Space for landing of drone is still a concern in highly populated areas. Availability of drones and charging time adds more complexity. Different model of drones are needed depending upon the upon the parcel size and weight. Moreover, flying drones are prohibited by government in various towns and metropolitan cities. As a matter of fact, major business for the delivery companies comes from metropolitan cities.

Droids are even more cost effective for delivering goods. Droids can deliver goods at the customer doorstep but droids use sideways and footpaths to move at speed of around 10kmph. Supervisors are needed to supervised but one supervisor can manage 50-100 droids. Drones and droids can enhance the customer experience and decrease the delivery time. Not to mention, deployment of drones and droids further add the initial investment cost.

Future of Pick up and Delivery Business

Need of delivery management software

In the competitive environment, on time delivery of goods is essential for the success of any business. Businesses are adopting different strategies to decrease the operation cost to optimized value. Adding further businesses are figuring out the ways to reduce the operation cost by using advance technology. Most common technologies used by pick up and delivery businesses and features provided by Tookan delivery management software are:

Route Optimization

Inaccurate and inefficient delivery routes can increase the delivery time. Pick up and delivery businesses can use Google maps to get estimated time to deliver the product. Using delivery management software with integration of route optimization further helps business to analyse the past data for making future strategies. Managing and real time tracking of delivery agent is easy on delivery management software.

Auto assignment of tasks

Delivery management software automates the tasks of dispatch, delivery and tracking. With delivery management software, free and nearest delivery is auto assigned the task to pick up & deliver the product. Agent gets a delivery alert on his app instantly to accept new delivery tasks. Automation of task makes a smoth transition for delivery business. Integrated functionality of scanning bar codes and capturing digital signatures can be used as a delivery proof.

Customer Engagement

Customer engagement is very important for success of any business. Satisfied customers means customer will retain to same company resulting into better profitability. Keep the customers updated with real time tracking throughout the order life cycle. Inform customers with SMS/emails to track and check real time status of their order. Customers can chat with delivery agents or talk with support team in case of any issue.

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