While most retailers are aware of the growing success of buy online and pickup in-store (BOPIS), not all are harnessing the growing model of buy online, deliver from store (BODFS).
"Initially, retailers were bridging the digital and physical divide by launching 'click and collect,' or BOPIS. But as Amazon and other large online retailers make massive investments in same-day and next-day delivery, customer expectations for these options is surging and retailers are being forced to find new ways to stay competitive," Marc Gorlin, CEO and founder of Roadie, told FierceRetail.
Gorlin said that modeling after Amazon, many retailers are now realizing that e-commerce sales will only grow if retailers invest in flexible shipping options. Plus, they are noticing the value of the BODFS model, which addresses the problem of shrinking store traffic and even making it possible to use physical store spaces as fulfillment centers.
"Additionally, many retailers are exploring alternative last-mile delivery options beyond on-demand couriers—essentially 'Uber-for-packages'—which offer limited flexibility and poor unit economics. In some cases, like Target or Walmart, they’ve gone so far as to acquire their own delivery services. Of course, for most retailers, that’s simply not a viable solution."
FierceRetail spoke with Gorlin to learn more about the positive benefits of employing a BODFS model.
FierceRetail: What are some of the benefits to this model?
Marc Gorlin: Customers want faster and free delivery, and retailers need to find alternative delivery methods to meet that demand. By launching a BODFS model, retailers have the opportunity to create an interconnected retail supply chain that improves customer experience, speeds up delivery, and reduces the overall cost of last-mile logistics. The economics just make sense—as retailers bring products and consumer goods closer to their customers, the more likely they are to drive down delivery costs and shorten delivery windows.
Not only are many discovering that cost-effective same-day delivery from store can be a reality, but many are seeing the bottom-line impacts of increased sales, customer satisfaction and saving potentially abandoned sales.
Why retailers choose collaborative delivery to launch BODFS
- Tapping into existing resources for same-day delivery. Collaborative delivery enables retailers to leverage existing resources already on the road—a captive fleet of employees, customers, and local commuters—for a faster, more efficient, and more flexible delivery offering. With Roadie’s nationwide delivery footprint, businesses have the capability to expand to next-day regional and national delivery.
- Speed and efficiency. Roadie’s point-to-point delivery model taps into existing resources already on the road. Because someone is heading the right direction all the time, Roadie’s unique matching algorithms connect those drivers and parcels in the most efficient manner possible.
- Flexibility and scalability. A community-sourced driver fleet, such as Roadie’s driver network, allows retailers to scale their delivery radius and flex dynamically based on the needs of the customer. With Roadie, retailers are also able to launch a new market in four weeks with Customer Push Integration or Customer Pull Marketing Partnership.
- Nationwide delivery footprint. With over 70,000 Drivers nationwide, Roadie has made deliveries in 9,000+ cities—a larger footprint than Amazon Prime.
- Better unit economics. Retailers are able to protect margins and improve profitability. Price of large, bulky item delivery based on size and mileage, not weight.
- Size variability. A driver fleet with a range of vehicles can support bulky, heavy and oversized deliveries.
FierceRetail: What are the challenges with this model?
Gorlin: There’s no doubt that creating an omnichannel retail experience takes a tremendous amount of coordination and preparation across the entire supply chain. And most retailers invest in a BODFS model with the goal of launching same-day delivery in a specific market. To successfully roll out a BODFS or same-day delivery program, retailers will need to transform stores into forward distribution centers, determine delivery drop density within each market, and find a nationally scalable solution that flexes with demand.
Without a doubt, leveraging brick & mortar locations as a way to ship-from-store and reduce delivery times will be the biggest challenge. Not only do retailers need to know what inventory they have where, but they also need to make sure there’s enough product to fulfill BOPIS and BODFS from a specific location. Rather than relying on LTL trucks and 24- to 48-hour delivery times for inventory management, many retailers are tapping into Roadie’s delivery network to reduce overhead delivery costs, optimize ship from store, and move product in as little as two hours. Because Drivers are already heading in the right direction, our retail partners are able to quickly respond to lulls and spikes in demand in a dynamic, ad-hoc way that doesn’t require spending millions of dollars on infrastructure and headcount.
FierceRetail: Do customers prefer this model to others?
Gorlin: Absolutely—it’s just more convenient for the customer. Having something delivered to your doorstep is a better deal than fighting traffic to pick up paint from your local Home Depot or figuring out how to fit a new 65-inch flat-screen TV into your Prius. More than ever, customers are willing to pay premiums for instant or same-day delivery. If retailers can convert stores into fulfillment centers, they can remove store distance as purchase barriers, shorten delivery windows for oversized items, and exceed customer expectations by delivering same-day to their doorsteps. Not only will a flexible delivery option drive e-commerce sales, but it gives customers a better end-to-end experience and builds brand loyalty in an age where people are flocking to the most convenient option.
FierceRetail: For consumers, how important is cost in this equation?
Gorlin: It depends on what a customer needs delivered. If someone needs groceries for a dinner party tonight or a couch for their new apartment, they may be more inclined to pay a higher same-day delivery fee than if they were buying a denim jacket online. We’re only at the beginning of same-day and two-hour delivery, so it’s hard to predict exactly where the market will land on balancing speed and price. However, we know that customers are more willing to pay a premium for convenient, same-day delivery now than at any other time in history.
FR: Are there any divisions of retail that you think this model works better for than others?
Gorlin: All retailers across divisions can benefit from launching BODFS. But there are certain situations where customers may need something delivered now rather than later. It could be a big-screen TV before Saturday’s championship game, the final buckets of paint to finish a project by deadline, or even extra folding chairs for your daughter’s wedding that afternoon. Those instances better lend themselves to specific retail divisions, but then there are all these other instances where you don’t realize that you want an item delivered now.
While I’ve never needed a shirt delivered in two hours, it doesn’t mean that I don’t want a shirt delivered in two hours. And that want-it-now, convenience factor has been catalyzed by Amazon. It has completely redefined competitiveness in the retail landscape, where next-day and same-day delivery aren’t only demanded by customers, but they’re expected.
FierceRetail: Where do you think deliver from store is headed in the near future?
Gorlin: I think we’ll see more tech innovation enabling even greater speed and efficiency across the supply chain, not just delivery from store. As the IoT (internet of things) becomes more ubiquitous, we’ll see smart vehicles connecting to smart stores connecting to smart warehouses and so on. As that happens, companies like Roadie will be able to better predict and utilize existing capacity to make delivery more sustainable, more flexible, and more efficient. Imagine the entire transportation grid transformed into a public utility that anyone or anything can plug into, moving things with zero waste and unprecedented speed and efficiency.