Various simulations and articles suggest that owning and running an autonomous line-haul truck will be 20-50% cheaper compared to existing manned vehicles. A massive volume of trucks follow the same route, stops and schedule every day. History shows us that industry most often leads the adoption of new technology before it filters to consumers, and use it to automate the simplest tasks first. The pressure of massive growth in volumes of deliveries and negative margin growth means logistics companies, in particular, need to be at the front of adopting technology that strips costs and improves predictability and experience. Rising above the hype about drones, robots and underwater or flying warehouses, it is important to understand what is likely to happen and when. To maintain some sort of operating margin, the logistics companies will also be forced to either consolidate and/or be more efficient, which leads us to… Logistics companies turn from price setters into price takers as the cost of what the retailer is willing to pay is dictated rather than negotiated. As the number of retailers (shippers) that control a large portion of the number of parcels being sent decreases, their buying power grows. If you’re in the business of shipping parcels for large retailers, this consolidation effect could be bad news. This has a ripple effect on related industries too. While eCommerce is still only a portion of total spend, it continues to grow rapidly and cannibalise parts of the traditional retail model, forcing incumbents to adapt or die. Companies who can’t meet this expectation are under threat from new entrants who can, and they will rapidly win massive market share.Īmazon has rapidly grown to over 50% of eCommerce in the US and having just entered Australia, we anticipate a similar story as in other markets. Our buying patterns shift almost subconsciously to those brands that provide the experience we find most convenient and simple.Ī better parcel delivery experience means I am unsatisfied with having to wait in half the day (or worse) for a service technician to arrive. We see how quickly technology is developed and have little loyalty and patience when our new expectations are not met within weeks. For example, if I can self-serve check-in to a flight, why can’t I self-check-in to a hotel? If I can nominate an hour time slot for my supermarket order to be delivered to my house, why can’t I do the same when my boiler gets serviced/my broadband gets installed/my parcel gets delivered? We swiftly adopt new technology and transfer the expectations that this tech creates to other situations.
Humans have a marvellous ability to adapt to change, particularly when that change is perceived as making life easier. Using the digital insights we leave ourselves through our online activities, smart companies use this data to reflect back to us our unique traits and reinforce that we are indeed, individual. Marketing and advertising have evolved from a one to many messages that broadly targets people in groups with ‘best fit’ messages, to highly personalised and targeted one-to-one communication. These macro themes are:ġ - Individualism (or “I’m a unique snowflake”) There are a number of macro themes and also some pioneering companies that have established what the new expectations are. We call this new economic reality of heightened consumer expectation the Individual Economy - or ‘Iconomy’ for short. It might be 4pm tomorrow after school pick up, 8am on Monday before work or 10am on Saturday.
What I want, where I want and when I want it.Ĭustomers are demanding to define the delivery time (to an ETA window level of 1 hour), but that doesn’t necessarily mean right now. But what we have found through our research, working closely with our clients and their customers, is that the actual customer expectation is paradoxically both easier to fulfil and more demanding. The On-Demand Economy is trending across all areas of retail, which is interpreted by most as instant, next hour, or at worst, same day fulfilment of an order.
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