There’s no doubt that Covid-19 expedited the rise in eCommerce and lead to the now-near institution of the home economy. And while the pandemic comes under control with an almost complete relaxation of restrictions, the on-demand delivery trend is firmly fixed into consumers’ lives, so much so that big and small businesses need to adapt their last-mile logistics systems to cater for South Africans’ increasing appetite for at-home or work deliveries.
To underline this point, in 2021 South Africa’s eCommerce market was valued at USD 4.5 Billion and digital platforms have been widely adopted by customers across various sectors including health, food and retail.
So aggressive is this uptake that it is estimated that by 2027 the local eCommerce market will reach a value of USD 7,9 Billion. That’s close to double where it stands now, within just six years. It’s not unrealistic either given the market increased in size by 100% in the past two years alone.
But all this growth comes with increased customer expectation: Research by the South African Digital Customer Experience Report 2021 shows that high shipping costs and unsatisfactory delivery options are the two primary contributors to a brand losing a sale at the virtual check-out. As such it is essential that businesses get that last-mile experience right, and that means upping their ante in the type of intelligent logistics solution software that they use.
Fortunately, there is significant development happening in this space with the local Picup among the leaders of delivery software technology. With digitization in the sector happening at a rapid pace, and certainly likely to come into being within the next two years, players like Picup are enhancing their experiences so that end-customers get their goods quicker and more affordably.
Here Picup founder Antonio Bruni unpacks the leading logistics technology trends that will soon influence the local on-demand sector – and make the home economy grow even bigger.
Emergence of 5G technology
While 5G is still relatively new in South Africa, it offers data speeds that are 20-times faster than existing 4G long-term evolution (LTE) networks. What this means for on-demand deliveries is that service providers can enhance their ability to use analytics-based solutions to more effectively manage inventory and supply chains.
This yields better accuracy rates and speed in reaching the end customer. 5G also has the potential to enable almost real-time data analytics which allows businesses to make faster and more informed decisions such as circumstances related to weather or traffic. Further, 5G improves signal quality and connection enabling drivers to work faster on the road.
AI and Machine Learning
Artificial Intelligence and machine-learning have played a major role in the logistics sector for years now, so this is not something new. But its use is helpful at providing last-mile logistics analysis and optimization, supplier selection and workforce planning. In the case of last-mile delivery, AI has revolutionized the experience in ways such as creating more efficient route deliveries, streamlining business processes and enabling better customer satisfaction.
When considering the former, AI solutions that use algorithms can provide an optimum number of fleets that can make deliveries using the shortest route possible. What’s more, it can also learn the routes through the input of historical data which then can maximize the delivery window while also analyzing the cost-benefit to provide the most efficient way to deliver a package to a consumer.
Consumers can also use tracking solutions to trace their deliveries throughout the last-mile delivery process. This creates greater transparency and trust.
The Internet of Things (IoT) has impacted all areas of our lives, and so too has it affected that of the logistics industry. Through intelligent data analysis, it helps to manage assets remotely, predicts risk, ensures proper cargo handling and can forecast traffic congestion. In short, IoT creates the connection among goods, packaging, transportation hubs and vehicles.
In days gone by, logistics firms would have had a hard time communicating in real-time with their drivers, now thanks to the smartphone they can be engaged while en route. They also send invaluable data back to the system instantly, while validating addresses while on-the-go. Smartphones are also paperless so the humble waybill is a thing of the past as details are captured automatically while the intelligent devices can also optimize routes meaning the delivery happens quicker.
The cost of the hardware used by drivers has also come down drastically and a unit is now in the region of R1000; this used to be a barrier to entry but the lower prices make it more affordable for businesses to switch to more integrated technology. Further, the high cost of printing waybills and its admin vs. using a smartphone to capture data considerably brings down hard costs.
Changing to optimize delivery
Lastly, any brand that is adopting smart logistics technology will require a degree of change management across their business units as training will be needed to understand how to switch to technology-enabled systems.
It is a 360-degree shift from traditional processes which are time-consuming, paper-heavy and slow to a more efficient, tech-enabled service that puts the customer first and delivers on-demand without any cumbersome processes to slow it down.