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Consumer Markets Are Not Predictable
Retailers1 are recognizing the new competitive challenge—the need to provide and improve their home delivery. Retailers know they are not just competing on products, since many offer the same brands. They are competing now on availability, convenience, and service.
The challenge then is maintaining margins, while continuing to offer more. And at the same time, delighting the customer—remembering that home delivery becomes the point of experience by which the consumer will remember the retailer forever. A few leading companies have gone beyond just maintaining, to generating, through their home delivery models, more revenue, increased close rates, and reduced logistics cost per delivery.
However, the 24-hour ecommerce world is unpredictable, as is consumer sales in general, challenging the retailer’s ability to determine the right level of resources to respond profitably to their customers. Without a better approach to home delivery, it can spiral into a losing proposition.
There are several core capabilities that are required to succeed at home delivery.2 In this article we will focus on one of these capabilities that is the make-or-break on profits and customer choice— continuous optimization at the point of ordering