Earlier this week Foot Locker announced it was going to start testing same day delivery for consumer purchases. Click here for the press release. This is an excellent case study of what we at Constellation Research are discussing with Matrix Commerce. It is a prime example of where the consumer voice and needs have converged with the retailer’s supply chain.
Foot Locker will be testing the same day delivery in 5 locations between the San Francisco and the Los Angeles area. In order to address the last mile delivery challenges, Foot Locker will be partnering with Deliv for the logistics of getting the product from the stores to the consumer’s location. Think of Deliv as doing for small parcel shipping to consumers as what Uber did for personal transportation – crowdsourcing last mile transportation. A very interesting challenge and service to say the least.
The voice of the consumer continues to grow when it comes to asking for and seeking the ability to get their products where they want it and how they want it. For retailers such as Foot Locker it is imperative that they determine how they can meet these demands from their consumers. They are already addressing their customer’s needs by allowing for online ordering with in store pick up. This new pilot is the natural next step.
As Daphne Carmeli, CEO at Deliv stated, “Foot Locker who surpass their customer’s expectations by giving them the ability to receive their merchandise when they want it, including same-day…” This is one area where the likes of Foot Locker, who are brick and mortar retailers at heart, have an advantage over eCommerce giants like Amazon. Foot Locker already has a number of distribution centers (DCs) that are located close to their customers – the actual Foot Locker stores. With the likes of Deliv’s services, they can now solve the last mile delivery issue that has made such services a logistics headache.
This success of the pilot project will be interesting to observe. Some questions a retailer such as Foot Locker will have to address:
- Can the staff in their stores be able to not only service the customers that come into the physical store, but also efficiently pick and pack the orders? Store personnel are trained to service a customer in person, Foot Locker will now have to ensure proper training for this staff to have to properly prepare orders for home delivery. Not as easy as it may sound.
- How does a crowdsource delivery offering like Deliv handle customer interactions? Once you start delivering products to consumers’ home you are exposing your brand – the person doing the delivery represents your company whether or not they are on your payroll.
- If your store acts more and more as a DC, how do you handle returns and restocking issues? Again, similar to the first bullet point, your staff is trained to sell products to customers who are in the store, now you are adding tasks to their jobs. How ready are they to handle this added demand?
The ability of companies such as Foot Locker to offer same day delivery is a natural progression when it comes to Matrix Commerce (other retailers such as Macy’s and Bloomingdale’s also announced this week they are running same day delivery pilot projects). That does not mean the challenges aren’t there…on the contrary the complexity remains and may become increased as Foot Locker travels down the learning curve. These companies are making the correct choice when it comes to offering such services, but they need to show patience with the process. There will clearly be some growing pains. However, similar to when eCommerce exploded on the markets in the late 1990s, the genie is out of the bottle. Now it is a matter of how well retailers and their partners meet the ever increasing speed for fulfillment.
As the Foot Locker EVP of Operations, Mike Owens, stated, “We want our customers to experience speed in everything they do, from shooting hoops to on the track.” It is all about speed…just make sure you don’t sacrifice quality for speed!