Why 'extra mile' technology will surpass 'last mile' in 2018

Ever since Ford re-positioned themselves as a technology company as opposed to a car manufacturer, I've been acutely aware of others following similar paths.

Within the grocery sector, we have Amazon and now Ocado who see their company value coming from their propriety technology.

There are less than subtle signs that Walmart is working hard to re-position themselves to capitalise on these benefits since their acquisition of in late 2016. Not only has the purchase seen them drop the 'Stores' from their name, as their U.S. eCommerce business soars (U.S. eCommerce sales have grown 63% last year with stock gaining 10%), they've also opened numerous spark-branded Tech Hubs and Innovation centres around the States. 

They drive shareholder value through the application of technology.

Currently, most of this value can be attributed to supply chain efficiency and the ability to master 'last mile' (getting the product from your regional distribution centre to the customer’s house) supply chain challenges.

But this is only the thin end of the wedge.

I'm looking forward to seeing more grocers getting into the technology business to minimise head office operational costs by improving the efficiency of interactions between retailers and suppliers - both within product development and 'business-as-usual' activities. 

This offers a double reward.

By both reducing operational costs and freeing-up talented retail professionals to create value instead of fighting fire (or fighting spreadsheets). 

That's more time to create value.

Time to better understand customers, emerging needs/desires and developing potential products to meet them. And more time to better consider the grocer's point of difference and ensure this is consistently incorporated into the products that are being developed.

For head offices, this technology begins with a shared workspace for suppliers and retailers to collaborate as one team. This concept of a shared workspace isn't anything new - although executions and subsequent supplier engagement levels continue to deliver mixed return on investment and effort.  

And most workspaces still focus on ageing approaches to collaboration.

The game-changing value in the future comes when that one team of retailers and suppliers are focused around a consolidated, refined and tailored one view of product and supplier performance.

It is this focus that aligns action and makes the difference between collaboration being seen as “doing the right thing” and collaboration for delivering measurable value.

Distribution technology is leading the way.

As I shared within my article on the future of retail, I believe this is primarily because a truck driver’s route and activity on the road – and the efficiencies that can be gained there – is tangible.

Having used technology in my role at S4RB to help buyers, technical managers, product developers and many other types of retail professionals for a number of years, I believe that those roles do have a comparable route: their daily or monthly routine. And herein lies the potential.

‘Last Mile’ and supply chain technology may be delivering the most shareholder value for Ocado for the last decade.

It will be the ‘extra mile’ enabling technology that will deliver the value for the next decade.


Read more about the future of ‘extra mile’ enabling technology in The Future of Retail: How Trucks are Driving the Future of Product Innovation and Technology.

Tags: Customer experience, Supplier engagement

David Taylor

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