The e-commerce boom has turned delivery on its head, ramping up tech competition for a piece of the action.
From fulfillment networks and robotics companies to location intelligence providers and drone innovators, today’s last mile is more crowded and diverse than ever. But with new players tackling delivery and fulfillment with vastly different agendas, they’re facing new challenges too.
The problem, according Wing CEO Adam Woodworth, is that “everybody’s trying to solve one piece” of the delivery equation instead of addressing the bigger picture. At the Shoptalk conference in Las Vegas on Monday, the drone boss insisted that Alphabet-owned Wing should be seen as a “meaningful” delivery company instead of merely as just another startup playing in the niche drone sector.
“Particularly in emerging technologies, folks tend to get sort of very insular with the use case of their widget and miss the pieces around it,” Woodworth said during a panel discussion. “I think it requires parts of a whole—all the elements in the supply chain—in order to be able to come up with a meaningful technology solution that actually brings more to the table.”
Even as e-commerce slows down from its heady pandemic heights, online sales are here to stay, meaning tech-first delivery innovators might want to present a united front when it comes to what it is they want to fix. And they have to figure out how to navigate a warehouse labor shortage of roughly 500,000 staffers, according to estimates from Simon Kalouche, founder and CEO of robotics fulfillment provider Nimble. Nimble’s intelligent robotic fulfillment systems autonomously pick, pack and ship e-commerce orders, with the company saying it can reach 96 percent of the U.S. population in two days or less.
Shekar Natarajan, president of American Eagle Outfitters-owned Quiet Platforms, has long fought to get the retail supply chain to stop competing on non-competitive parts of the business. Natarajan formed Quiet on the grounds that all brands and retailers should have “democratic access” to supply chain operations, capabilities and support, ultimately aiming to level the playing field for small and midsized brands.
He believes delivery will be the No. 1 e-commerce cost for at least the next 15 years because companies are hellbent on siloing their supply chain information.
“Containerized shipping at the door is the way of the future. But to get the containerized deliveries to the door, a lot of things have to happen. And the first thing which has to happen, is everyone needs to buy into the business model,” said Natarajan. “The second thing that needs to happen is the incentive system and the mindset of people needs to change. Because competition on the right axis is great. But go fight on demand on the product and experiences. Don’t go fight on something as commoditized as supply chain access. Creating narrow pipes, competing on them and making everyone compete around them is the worst thing to happen.”
To help brands change their mindset about adopting innovative delivery solutions, Woodworth said tech providers must show how their solution unlocks value for the retail customer. Failing to do so could backfire.
“A lot of the changes that we’ve made recently include how the system works and how we can replicate what curbside pickup looks like,” Woodworth said. “‘How do we make the drone behave like a car that takes up no parking space?’ The businesses already have workflows for that, and you can integrate that seamlessly.”
He urged tech companies to avoid the common pitfall of getting wrapped up in their shiny new technology before understanding if customers are ready to deploy and succeed with their particular brand of innovation.
Nitin Gupta, co-founder and CEO at location intelligence provider at Beans.ai, which bills itself as a full-stack location solution used by FedEx and Instacart, said his company provides an “edge quotient” to assess if potential users are truly ready to adopt the platform and get meaningful value out of it. Similar to a credit score, the rating ranks users on 1 to 10 scale from bad to great.
“When you sell the outcome, it becomes easier to back into the solution,” Gupta said. “And distribution could be as complex as it can be, but the outcome is what you got to sell. That’s the most important thing that you got to do when you’re trying to make change. Simplify it, get the outcome, understand what your current needs are and hammer away on that outcome. That’s the best way that I found that change happens within and outside a company.”