The gig economy and its on-demand armies of drivers have moved people and food for years, but many retailers still hesitate to tap into Uber, Postmates and other companies to quickly move orders from stores to local customers’ doorsteps. Look for this hesitancy to decline as more retailers continue to join the likes of Target and Walgreens in embracing the many advantages of gig economy fulfillment.
Gig economy fulfillment setting retailers apart
Embracing the gig economy to bolster fulfillment allows retailers to better serve customers, differentiate themselves from competitors and operate with more agility. At its core, this decision changes and expands what the retailer considers to be a carrier and can significantly increase the fulfillment options available to the retailer and its customers.
Until it becomes the norm, early adopting retailers can embrace gig economy fulfillment for a leg up on the competition. With Amazon, Walmart and other e-commerce behemoths increasing consumers’ appetites for next-day and same-day delivery, the same-day or two-hour delivery offerings of retailers working with gig economy players gets orders into customers’ hands even faster. Combined with omnichannel offerings like buy online pick up in store (BOPIS) and curbside pickup, two-hour and same-day delivery round out a suite of order fulfillment services even Amazon cannot match.
Behind the scenes, merchants that expand their traditional carrier network to include gig economy providers also improve their odds of peak season success by making the last mile more agile. As traditional carriers including FedEx and UPS continue to increase rates and surcharges and warn of capacity limitations, establishing relationships with gig economy carriers now may prove even more valuable later.
Walgreens and Target among the leaders
Target offers same-day delivery from Shipt. So do many other brands, including Publix, Costco, Petco, GNC, and Bed Bath & Beyond.
Walgreens launched nationwide contactless same day-delivery in under two hours for more than 24,000 products last month. This was just the latest of several omnichannel fulfillment enhancements from Walgreens, including nationwide rollout of same-day delivery with Instacart, launched February 2021, and nationwide same-day curbside pick-up, launched July 2020.
Target acquired Shipt in 2017 to provide the foundation of its same-day delivery. Walgreens, on the other hand, tapped the gig economy through a series of partnerships with companies that include Postmates, DoorDash and Instacart. Today, these legacy retailers and Walgreens in particular stand out from competitors, boasting an increasing array of omnichannel fulfillment options and the ability to deliver orders to customers’ doors faster than ever, even if for a cost. With Amazon recently entering the prescription medication business, these gig economy innovations may prove to be key difference makers at a time when competition is growing and evolving.
Business intelligence lights the path for others
Other retailers and e-commerce merchants may lack the retail or distribution center footprint to rollout same-day delivery nationwide. Even those with the necessary national footprint may be unsure about how to sequence a phased national rollout. Regardless, those who identify well-suited geographic regions and other sweet spots can still benefit from opening their carrier network to the gig economy in phases or in isolated regions.
Those unsure of whether or where to start should tap their competitive intelligence teams to consider some initial questions, including:
- In which markets can we lead the pack with this as a competitive differentiator?
- In which markets are we getting beat and need to catch up?
Whether considering where to start or what they have to gain, most merchants find the necessary insights to move forward with business intelligence tools that mine their own fulfillment data and customer interactions. Business intelligence helps merchants adapt to consumer behavior shifts, like it has helped countless others navigate supply chain disruptions and other challenges.
With data from their own customer interactions at hand, merchants should look to business intelligence technology to help answer questions that include:
- In which markets do consumers most often abandon orders during checkout?
- How can we strategically house inventory to better support gig integration?
- Where will our inventory footprint currently support gig integration?
- Which stores and distribution centers will accommodate gig integration for various regions?
- Which products are most popular in particular regions, and how can we store them there?
Once merchants start working with gig economy carriers, they can also track and analyze the vitals of every delivery to better understand and coordinate its fulfillment efforts with them. Over time, retailers will be able to determine which gig carriers offer the best service in a particular geographic region, for example, as well as which carriers most often meet expectations vs. fall short. These vitals, in aggregate, can also help retailers more effectively negotiate rates across their carrier networks.
Critical data to track
To glean the most reliable and valuable insights from business intelligence, merchants should be sure to capture and analyze the most important data, including:
- Historical shipping data (inbound and outbound)
- Carrier delivery status (visibility/performance)
- Carrier-contracted rates
- Carrier invoice data (actual costs)
- Inventory location and availability (from warehouse management software)
During this ongoing pandemic or other disruptions, merchants should also consider and analyze distribution point availability, shifting supplier sourcing and employee resourcing. Without availability of the right resources and facilities, even the best planning may fall short.
Can the gig economy help better serve customers?
Most shippers can realize gains by embracing gig economy fulfillment sooner rather than later to offer more fulfillment options to customers and minimize the impact of carrier capacity limitations and other disruptions. Generally, merchants can better meet customer expectations and boost loyalty by prioritizing the last mile of each customer’s delivery, and gig economy carriers help many merchants do this effectively. While each merchant’s situation is unique, each can better understand what could be gained and the best path forward by uncovering insights in their own customer interactions.
Ken Fleming is president of Logistyx Technologies, the leader in Transportation Management for parcel shipping. Since the mid-1990s, Ken has led successful launches of many new technologies and services, including supply chain management, e-commerce, SaaS, and enterprise software and systems integration solutions. Ken can be reached at ken.fleming@logistyx.com.
