How Can Fashion Retailers Solve The "Last Mile" Logistics Problem?

The wealthy young India consumer is ready to enter credit card information and submit orders on the website.

The future he faces will be a difficult test of patience, with emphasis on frustration and occasional anger.

Muthu Venkatesh, 23, said: "the actual delivery time is seldom consistent with the expected service time. It's really annoying."

But Muthu Venkatesh is not his real name. The young man in India's Tamil Nadu family is a prominent local celebrity. He insists on not revealing his real name in the interview.

He said his favorite overseas luxury.

The package sometimes takes 3 weeks to reach his home in Chennai.

The capital of Tamil Nadu has 7 million people, and at least 6000 of the 236 thousand millionaires in India live in the city.

For most of the India consumers who are very generous and have similar experience with Venkatesh, and some other providers like Matchesfashion.com who serve them, part of the problem comes from the logistics sector's "last mile" delivery.

Today, the last mile is still the most arduous and expensive section of the shopping journey, occupying nearly 50% of the total delivery cost.

For retailers, the efficiency of "last mile" will directly save costs and bring more pleasant trading experience to consumers.

According to the world clothing and shoe net, in 2017, the global Parcel Logistics showed unprecedented vitality.

According to the 2016 McKinsey Consultancy (McKinsey&Company) study on the "last mile" delivery, India is emerging.

The growth rate of the global parcel pport market increased by nearly 300% compared with the previous year, mainly due to the rapid growth of E-commerce -- shifting the focus of logistics delivery from B2B to B2C.

However, like most infrastructures, India's logistics problems also come from many aspects.

Besides the bad road network and crowded streets in the country, there are other factors leading to delivery delays.

"It is very difficult for me to plate accurately between the English and Tamil languages on the parcel," Venkatesh said. "Because it is the official language of the country, not the Tamil language of our region, which usually brings trouble to the couriers who know only the Tamil language."

And, as Venkatesh said, the service itself is boring and sometimes unprofessional.

"If you buy things from abroad, you will go through customs.

Sometimes your parcel arrives at customs, or even nobody notices you.

Couriers often use informal telephone numbers to call you. They may change 5 different numbers at a time, so I can hardly get back to contact them. "

The streets of Venkatesh are still named and marked clearly, but not all the rich people in India.

Even in this "day served" world, the United Nations data show that there are no neighborhood names or codes for the location of nearly 4 billion people.

For example, the United Arab Emirates does not use the zip code in Arabia.

This logistics defect exacerbated the problem of package delivery in the Middle East and North Africa. It was claimed that even in the wealthiest and most urbanized areas of the Middle East, up to 40% of the packages were returned to the issuing party because of "no place".

At the same time, even in the relatively prosperous African countries such as Garner (Ghana), government officials have only recently begun to mark street signs.

A common misconception in the west is that street signs are usually seen only in disadvantaged poor communities, and are not necessarily members of the luxury consumer market.

This blind area leads to the unrecognized interest risk.

"We recognize that delivery is one of the key strategic pillars of our electricity supplier operation," said Becky Lombardo, director of Matchesfashion.com logistics, a London electricity supplier in 176 countries worldwide. "Customs regulations vary from country to region, but our international operator partner DHL has worked hard and effectively worked with local customs departments to reduce obstacles. They have many years of service experience in these markets, and are skilled in dealing with logistics challenges. Their operations across the globe have helped to accumulate local logistics knowledge."

Today, there are several market players in the "last mile" space in a stable foothold, hoping to eliminate the Venkatesh consumers like this now and then.

"If retailers can create good logistics infrastructure with the right tools, they will have a great chance to reach new destinations," said Raanan Cohen, co-founder and chief executive officer of Chicago based Bringg.

These opportunities are too good to be missed. "

Bringg is a logistics management platform used by more than 50 companies such as Fedex and DHL to help retailers optimize delivery routes.

"Cross regional retail business will continue to exist.

The global attractiveness is putting pressure on retailers to modernize their logistics infrastructure and meet customers' needs and expectations at any time.

Cohen said: "street signs are unclear, postal names and codes are missing, and can be easily solved through real-time geographic positioning tools."

UAE logistics service Fetchr courier

Dubai's App based real-time location logistics company Fetchr and other start-ups are exactly the same as Cohen's recommendations.

Although Fetchr CEO Idriss Al-Rifai couldn't be reached for comment, the company allowed the electricity supplier to pmit the location of the customer's mobile phone through the GPS coordinates, thus delivering goods without the need of a zip code or address.

At present, the company operates in 4 Middle East countries (Saudi Arabia, UAE, Egypt, Bahrain), covering more than 30 cities.

But other companies are adopting a more radical approach, hoping to completely replace the postal system they consider to be out of date.

"The biggest challenge we face is that people think the addresses of the world are clearly marked.

In the final analysis, what we are trying to do is to change people's behavior, "said Giles Rhys Jones, chief marketing officer at What3words.

The London based logistics technology startups hopes to redraw the global map.

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For example, in a market like Nigeria.

The country has 191 million inhabitants, the seventh largest population in the world, and the population growth rate is as high as 2.6%. Nearly half of the population in the city live in the city, which has become a hotbed for the development of the electricity supplier.

According to Ombola Johnson, former communications technology minister of Nigeria, the electricity market value of the country is about $10 billion, and nearly 200 cross-border electricity supplier packages are delivered every day (up 70% since 2014).

However, according to the statistics of Nigeria's Ministry of pport, although the country has an electronic business platform like Jumia-Africa, the first Internet Unicorn enterprise in Africa, 79% of the country's households and businesses still can't get delivery.

To add insult to injury, many people will rent a mailbox at the post office, but especially suppliers such as fashion electronics retailers do not provide services for them.

Despite such restrictions, local luxury retailers are slowly emerging to cater to Nigeria's wealthy consumers in other parts of the continent.

Polo Luxury, a West African entity store, is the sole authorized retailer of Cartire, Cartier, Gucci and Rolex (Rolex) in the region. It has recently started to distribute through Polo Avenue, a self created e-commerce platform.

But as Jennifer Obayuwana, executive director of the company, emphasized, infrastructure constraints remain a major obstacle to her entrepreneurial fabric.

In an effort to mitigate the impact of this problem, What3words and Nigerian Post launched a three word address this month to expand delivery of delivered door-to-door Nigerian.

In What3words's app and online maps, the whole world is divided into 3 square meters of length, each square has a unique marking method, consisting of three words.

So the courier can locate the package destination according to the three words instead of the street signs and numbers that may or may not exist.

In the end, What3words hopes to deliver door-to-door services to 70% people in the next two years, up to 90% by 2020.

Some Western Luxury players have realized the importance of "last mile" delivery quality outside their traditional domestic market.

Earlier this year, Jingdong (JD.com) Co operated with the luxury goods store platform Farfetch to inject $397 million into the London based company to enable Farfetch to obtain Jingdong's unparalleled efficient logistics network in China.

According to Alvina Patel, vice president of Jingdong brand marketing, Jingdong's logistics strength basically exceeds all international express partners, not only for speed and experience, such as providing delivery time in selected cities, serving on day, or even "white glove" service.

"Improving logistics capabilities in emerging markets is a key challenge and a great opportunity.

That's why companies like Jingdong have to build their own logistics network anywhere else, and you can see similar investments in countries like India, "Patel said.

"In many emerging markets, retail distribution and footprint are restricted, so e-commerce can enable all consumers of these markets to get the products and services they need if they save large network of stores.

Although the logistics problem is not small, it also requires investment, but it is more efficient than opening stores, "she added.

But as the McKinsey report points out, the burden of "last mile" in the next 10 years will probably fall into the hands of UAVs and autopilot controllers.

On that day, Jones intends to integrate these innovative tools into their "three character positioning" ecosystem.

Currently, what3words is working with companies such as Hylio, the US company, to build UAVs and related guidance software.

Although Amazon has been committed to developing its own procedures over the years, Jingdong has already used UAVs in its delivery to better reside in online shopping services in rural China. Amazon

But in the long run, the role of these autopilot tools remains to be seen.

Cohen said: "UAVs will play an important role in the future" last mile "operation, just like robots, autopilot cars and trucks, but these vehicles are not the ultimate omnipotence.

"With so many different channels, the main challenge facing enterprises is the" last mile "matrix is becoming more and more complex.

To succeed, retailers must strategically coordinate the logistics matrix, "he added." all shipping channels based on customer orientation need to be optimized with a certain level of service and price.

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