In the past, sending a parcel involved going to the post office, whacking a stamp on it and leaving it in the hands of the postie. Today, technology is leading an overhaul of the delivery and logistics industry. Here's where delivery for SMEs is currently at.
The delivery game has undergone significant change in recent years. Users can now go online, request an item and have it sent in a matter of hours. Start-ups are constantly cropping up, disrupting the way goods are sent and received.
What does all this mean for business owners trying to ensure their customers receive their goods on time, without it costing the earth?
Flexibility and efficiency
Shipping and scheduling deliveries can be a hassle. However, it is no longer a case of waiting in the crawling post office line. Some companies offer the ease and convenience of organising when and where you want them to collect your package, as well as giving your customer the choice of when and where it is delivered.
“Getting a courier to deliver it to your home and then actually getting it at a time that is convenient to you can be challenging,” says David McLean, founder of delivery service HUBBED.
“The logistics space is really focused on how to rationalise and improve the expense around the last mile … and that’s [just] the consumer side.
“On the small business side, they are now looking for easier and more cost-effective ways to ship their products to their customers or partners, and there tends to be only one of two real solutions at the moment: a courier collection at a price, or a delivery drop-off to a post office, and the convenience that is impacted [by] that.”
New players such as HUBBED are offering more flexible delivery models, allowing customers to schedule when they want to receive items, with online tracking every step of the way, rather than simply hanging around for an eventual delivery.
“The logistics space is really focused on how to rationalise and improve the expense around the last mile.”
The food delivery sector is a prime example of how disruptive technologies are not only making deliveries a more pleasant experience for customers, but are opening up new markets for SMEs.
Many delivery businesses offer partnerships with restaurants, allowing customers to find them online, make an order and have it delivered to their front door or workplace.
This enables smaller restaurants and eateries, without the resources to employ their own delivery drivers, to earn additional revenue at minimal cost.
For Toon Gyssels, co-founder and CEO of foodora, food delivery isn’t about trying to find the “ultimate solution for everything”.
“What we’re going for is specialist niches … each niche is a very different niche, and you need to cater for that,” he says.
By focusing specifically on food delivery, Toon believes his business can continually work on improving and innovating within that space.
“Delivering food is very different than delivering a parcel or person, and requires a different approach,” he says.
“While a parcel can wait and a customer can look for the car, food needs to be picked up exactly on time in the restaurant. But it goes much deeper.”
Toon says restaurants that have partnered with foodora have seen revenue growth of between 20 and 40 per cent.
“We are committed to growing their business fundamentally, not disrupting it or giving it a short-term boost,” he says.
“Each niche is a very different niche, and you need to cater for that.”
Expanding reach and technology
According to Alistair Venn, managing director of Menulog, businesses that use third-party booking and delivery services enjoy a higher profile thanks to the efforts those services put into their marketing.
“Restaurant partners also benefit from the significant investment in marketing of local businesses to drive more customers online,” he says.
“Offering delivery services to restaurants that didn’t previously offer home delivery is a huge benefit to local businesses as it opens up a whole new market for them.
“It [also] means businesses can tap into new food opportunities, such as catering to office workers or lunchtime deliveries.”
Deliveroo is another service focused on creating additional revenue possibilities through delivery.
“We’re working with restaurants and adding on a new category for them, which is delivery, and we’re doing so in a very high-tech way,” says Levi Aron, manager of Deliveroo Australia.
“What we’re able to bring to the table is a whole array of information, whether that be heat maps on their delivery, or talking about the average order value and working with them [on] how to their customers.”
Through partnering with delivery services, some restaurants are even taking the plunge and expanding their business, having identified new markets through customer delivery requests.
“Some restaurants have taken that to the next level where they’re looking at opening up new locations, and they’re sitting and talking to us about which locations would be a better place to open based on just a pure delivery element,” Levi says.
Moving with the times
Products that are delivered directly and quickly, with a firm estimated delivery time and the option of live tracking, make for a really strong customer experience. When customers are left in the dark about when their goods will be delivered, this detracts from their buying experience, which can taint the supplier’s reputation.
“If you can take away a few seconds ... or a few presses of a button in somebody’s day, that’s what wins them over.”
Perhaps now is a good time to consider whether your systems are as efficient as they could be, for you and your customers.
Case study: Mary’s
It can be seriously worth your while to consider adapting part of your business around delivery. Kenny Graham (pictured below) of burger restaurant Mary’s took on this initiative and has seen substantial growth.
Mary’s opened in Sydney’s Newtown in April 2013. Some time later, Kenny and business partner Jake entered into a partnership with Deliveroo.
Then, 18 months after opening the first Mary’s, they opened a second store in Sydney’s CBD, mainly focused on takeaway.
Despite increasing his offering to include delivery, Kenny says there has been no loss of eat-in customers.
“Some people are ... concerned it’s stopping people going out, but I feel like all it’s doing is attracting the people that were never going to go out anyway,” he says.
“From a figures point of view, it’s an addition to what you do. It doesn’t cut back on the people that are coming in.
“It’s from further afield than our immediate clientele, so there’s definitely been growth, as opposed to eroding or just taking out a part of the market share that we already had.”
Kenny says 10 to 15 per cent of the company’s weekly sales now come through deliveries.
There is a view that if you partner with a delivery service, you are in competition with others using that service. However, Kenny says this is no different to regular competition.
“When you look at Deliveroo and see that they represent … clients that are in competition to us, but I mean, that’s kind of the same on a high street anyway,” he says.
“Whether the products are being delivered to your home or whether you have to walk down the high street to get it, I think [as a business owner] you’ve got to take onus on yourself to make sure you’ve got it,” he says.
Kenny envisions the future consolidation of today’s market players, delivering all manner of goods at the utmost convenience of the customer.
“Delivery [companies] … will start to move into other aspects,” he predicts.
“There’s only so many restaurants around, and so many homes in condensed spaces. It’ll be that movement into other parts, so maybe you can get your food delivered, but you can also get your laundry delivered [by] the same service.
No matter what the offering becomes, Kenny believes it will always be about servicing the customer.
“If you can take away a few seconds ... or a few presses of a button in somebody’s day, that’s what wins them over. That and the consistency of service,” he says.
Case study: Mad Pizza
Refusing to offer delivery options is not always the smartest idea. Mad Pizza’s Jono Spragg (pictured below) learnt from this mistake and saw a sharp increase in growth.
When Mad Pizza Bar opened in 2008, general manager Jono Spragg decided not to offer delivery, in an effort to focus on foot traffic.
When this did not achieve the anticipated results, he partnered with Menulog, trialling deliveries from his Bondi store. The business doubled its weekly sales in the first month.
As a result, all five Mad Pizza stores now offer delivery, through their own drivers and Menulog.
“It was crazy how much it blew up once we introduced home delivery,” says Jono.
“We always thought we’d need larger scale restaurant locations to get the brand to where we wanted. However, seeing the success of delivery, we’ve realised that by having smaller sit-down locations and delivering to local areas and surrounds, we can actually open more locations and expand at a faster rate.”
Jono says that through offering delivery services, Mad Pizza’s business performance has increased by 40 per cent in the past year alone.
Through his partnership with the third-party ordering and delivery service, Jono also receives insights and customer data that he uses to further improve and scale his business.
“It’s incredibly beneficial to be able to see where our orders are coming from and receive insights and trends that inform where we might offer a different product or open a new store,” he says.
- Opinion: The best and worst of customer service
By Adam Zuchetti
- Analysis: Is Twitter dead for business purposes?
By Adam Zuchetti
- Analysis: The misnomer of bank regulation and loan costs
By Adam Zuchetti