When the Amazon driver leaves a package on a doorstep, it’s a successful last-mile delivery. But when the item is a sectional sofa, there is an added complexity that no Amazon algorithms have yet perfected.
For last-mile delivery of big-and-bulky items, technology is great, but the final mile remains a people-centric operation.
“We’re successful because we are at the intersection of people and technology,” Brenda Stoner, CEO and founder of last-mile delivery firm PICKUP, said. “We depend on the human.”
Stoner met with Modern Shipper at the recentHome Delivery World 2021 at the Pennsylvania Convention Center in Philadelphia. She touched on a number of trends in the last-mile delivery space.
“Courier and parcel are interesting, but big and bulky is challenging,” she said, noting that the biggest issue facing the business that specializes in big and bulky and counts Big Lots among its clients is inventory control.
“Clearly you like demand density because it makes the workforce more efficient,” Stoner said. PICKUP’S average delivery includes 2.5 items per vehicle with an average basket size of $800.
However, a lack of visibility into inventory hampers the operation.
“[Customers] don’t know where all their inventory is. For some, omnichannel isn’t built yet,” she said.
That leads to drivers heading in different directions – to warehouses, to stores and places in between – to pick up the correct items. With 70% of all PICKUP deliveries requiring two drivers, that leads to inefficiency and higher costs.
In addition, Stoner said she is seeing growth in deliveries on both the shorter and longer end of the range – less than 5 miles or as much as 60 miles.
To mitigate some of this inefficiency, PICKUP is leveraging both the technology and human element to build a delivery platform that it said results in its customers experiencing 31% more sales conversions and nine times greater inventory velocity.
“It’s critical humans and tech work together,” Stoner said. PICKUP is incorporating artificial intelligence and machine learning so customers can access the speed to delivery that is such a key component of last-mile delivery.
Stoner said a rigorous screening process – only 15% of those applying for jobs with PICKUP are hired – and both higher pay levels and same-day pay schedules help the company maintain access to delivery drivers and have shielded it from the driver shortage that is afflicting other transportation segments.
The other advantage PICKUP is leveraging is its “point-to-point” model. Stoner said a PICKUP vehicle does not carry multiple customers’ deliveries at one time – it picks up the merchandise and delivers it. That enables it to utilize vehicles that are right-sized for communities.
“Competitors have applied some technology, but the model hasn’t changed,” she said. “A big asset rolling through the neighborhood is the most efficient model, but it’s not needed in some cases.”
The other thing that hasn’t changed, Stoner noted, is that no two deliveries are the same. Because of this, the collection of data by PICKUP’S system is proving helpful to brands using the service.
“We have a lot of access to information that they didn’t have beforehand,” she said, adding that it is aiding the retailers in identifying trends.
PICKUP also provides post-sale support, removing that aspect from the plates of retailers.
“We built all this infrastructure, but what is the model?” Stoner asked. “There isn’t one.”
Click for more Modern Shipper articles by Brian Straight.
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