last mile - · pdf filehow critical is last mile in driving omnichannel growth? do you see...
TRANSCRIPT
Title Sponsor
RETAIL SUPPLY CHAIN CONFERENCE 2015
LAST MILE
BIG AND SMALL
Title Sponsor
RETAIL SUPPLY CHAIN CONFERENCE 2015
Omnichannel delivery volume growing
US Online Sales, 2011-2017
$195.0$225.0
$256.0$297.0
$349.0
$385.0
$434.0$B
20172016201320122011
eCommercemCommerce(% of total eCommerce)
14% CAGR; leaders achieve >20% online CAGR in past 3 years
20152014
+14%
UPS /FedEx seeing >4% volume CAGR between 2013-18
FedEx handled 290 million small format shipments between Black Friday and x-mas
Delivery Accelerating for Big and Small…
Large format home delivery expected to grow at 4-5% (unit) CAGR between 2014-17 ~90 MM units delivered in
2014
Title Sponsor
RETAIL SUPPLY CHAIN CONFERENCE 2015
Role of Last Mile in omnichannel success?
Small Format Large Format
How critical is Last Mile in driving omnichannel growth?
Do you see future Last Mile as table stakes or as a source of differentiation?
What is Last Mile? How does Last Mile fit into your broader omnichannelsupply chain?
Title Sponsor
RETAIL SUPPLY CHAIN CONFERENCE 2015
Delivering on customer expectations?
Do customers care about Same Day Shipping? Are they willing to pay for it?
Is cost the biggest consideration or do customers care about other service elements?
Is the industry doing a good job of delivering against expectations??
Title Sponsor
RETAIL SUPPLY CHAIN CONFERENCE 2015
Small Format Large FormatSmall Format
Source: AT Kearney
Expectation gap for large format…
Title Sponsor
RETAIL SUPPLY CHAIN CONFERENCE 2015
… and for small format Small Format Large Format
customers want Faster Fulfillment … and Free Shipping
Same Day9 3568 2 17 4
Consumables& Baby
Toys
Electronics
Hardlines
Apparel1-2
da
ys
Ne
xt
Da
y Sam
e-
Ne
xt
Da
y
Current Retailer Customer Expectations
• 70% say Free Shipping a big decision driver
• 25% willing to a pay a bit more for Free Shipping
Title Sponsor
RETAIL SUPPLY CHAIN CONFERENCE 2015
Structural challenges today
Small Format Large FormatSmall Format
What do you see as the biggest challenges that retailers face in unlocking breakthrough Last Mile performance?
What are the root causes of the above challenges?
Title Sponsor
RETAIL SUPPLY CHAIN CONFERENCE 2015
Large format: Retailer / Carrier impasse
Source: AT Kearney
Challenges (based on survey of 20 retailers and carriers)
Title Sponsor
RETAIL SUPPLY CHAIN CONFERENCE 2015
Small format: Same Day pains
• Majority of Same Day demand outside FedEx and UPS coverage
• Sub-scale density via today’s dedicated/3PL Same Day models• $25-45 per average delivery drop
in urban areas• $10-20 in fully optimized routes• Cost is significant % of profit
given projected basket size
2014 2015 2016 2017 2018
US Same Day Delivery Forecast in 20 Cities
Value of merchandise delivered Same Day in 22 cities ($B)
Source: BI Intelligence
• Getting upstream inventory deployment right is hard
• Segmented flow path face trade-offs
Title Sponsor
RETAIL SUPPLY CHAIN CONFERENCE 2015
Path forward for Large Format?
What solutions are retailers and your organization pursuing to unlock Last Mile delivery performance?
To what extent are retailers and your organization pursuing non-dedicated (co-mingled) deliveries?
Do you expect carrier consolidation to be a big driver of unlocking cost and/or service efficiency?
Title Sponsor
RETAIL SUPPLY CHAIN CONFERENCE 2015
Path forward for Small Format?
What strategies and end-to-end capabilities are retailers pursuing to enable Same Day?
Are marketplace solutions viable (e.g. Google Express, Deliv, Zipments, TaskRabbit)?
What are the key challenges for retailers in adopting marketplace platforms?
What role do you expect traditional delivery models (FedEx/UPS) to play in future Same Day?
Title Sponsor
RETAIL SUPPLY CHAIN CONFERENCE 2015
Thanks – please reach out
Mike Hu | [email protected]
Sumit Chandra | [email protected]
Marie Robinson | [email protected]
Josh Delay | [email protected]
Belinda Bathie | [email protected]