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For many shoppers, the issue with buying products online is having to be at home for the delivery time slot. Unattended in-home delivery eliminates that need, and even remembers to put your ice cream in the freezer.

In the last year or so, we’ve noticed a real trend in unattended in-home deliveries. It’s not something I’d have ever thought possible five years ago, but if there’s anything I’ve learnt in recent years, it’s that innovations in our industry are arriving faster than ever before.

Who’s involved?

There are a number of businesses in North America and Europe currently offering in-home delivery.

Leading Swedish grocery retailer, ICA, and Glue, a smart home startup, ran a pilot in 2016. Glue produced smart digital locks, which enabled pre-approved delivery drivers to enter shoppers’ homes and unpack groceries, using a digital key.

Several retailers have followed ICA’s example: Walmart and Amazon both launched in-home delivery at the end of 2017.

Walmart partnered with a leading provider of smart locks and home accessories, August Home and third-party, Deliv, to test in-home delivery. In this pilot, customers could view the delivery in real time on a smartphone and received a notification when the door had automatically locked again.

Investing $1bn in in-home delivery

Following Amazon’s equivalent pilot, in which it trialled Amazon Key in 37 US cities, it acquired home security business, Ring. The deal was Amazon’s second largest acquisition, worth over $1bn. Once they’ve installed the Amazon Key Home Kit, shoppers can track their delivery with real-time notifications and, like Walmart, can watch the delivery or watch a video afterwards. It’s included at no extra cost Prime members, and also offers keyless access for family and friends, with customers able to set the frequency and length of time a person has access for.

Source: Amazon

Responding to competition

Since Amazon Fresh launched in Germany in 2017, retailers have increased focus on their online services. Edeka’s online supermarket, Bringmeister began offering in-home deliveries in Berlin at the beginning of 2018. Partnering with Cary Services, customers pay €9.99/month for its smart lock system.

Source: Edeka

These retailers and their partners have relatively similar offers, with little to differentiate them. However, Walmart’s been busy in another area.

Making the last mile more efficient

Walmart’s Jet.com subsidiary launched a new delivery method with smart access business Latch in 2017. Latch installed its residential access system in apartment buildings in New York, enabling residents to provide delivery companies with access to a safe delivery location inside the apartment block. By installing the system in 1,000 apartment buildings, it has enabled around 100,000 residents to benefit from the service.

Whilst this is currently only a viable option for ambient and non-food products, it could be combined with multi-temperature locker systems for many full grocery deliveries to be made simultaneously.

Source: Latch

Why invest in in-home delivery?

There are a number of benefits of delivering orders when the customer isn’t there to receive them. Drivers will be able to optimise delivery routes - saving time and fuel - as they won’t have a predetermined order of deliveries. They will also be able to react to traffic congestion and change their route, without being penalised for late deliveries.
As well as optimising the last mile logistics, drivers could save time by not having to meet and greet the customer on arrival. Not having to deal with any returns would also save time – though any product substitutions would need to be communicated clearly in advance of delivery.

What’s next?

In-home delivery isn’t something that will immediately take the world by storm. It’s expensive to set up: the list price for the Amazon Key Home Kit is almost $300, and it’s only available in selected areas. It’ll take time for this to become commonplace.

Once the likes of Amazon and Walmart have embedded their offer in-home delivery offer, the next step will likely be value-added services: dog walkers and cleaners will no longer need keys to enter the house, and homeowners will be able to monitor their presence remotely.

Transporting orders to individual addresses will still lead to expensive last mile costs. One alternative could be to deliver products to other convenient locations. Amazon currently offers in-car delivery to certain vehicles. This could become more efficient by offering in-car delivery in certain locations, such as station or company car parks for commuters to use.
What’s clear, though, is that as shoppers become more demanding, competition in grocery retail will heat up. Unattended in-home delivery seems like the ultimate convenience in 2018. I wonder will the ultimate convenience look like in a couple of years…

Suzannah Murphy

Suzannah Murphy

Supply Chain Analyst

This report highlights four key supply chain trends that will emerge and develop in 2018. It also assesses how the trends IGD identified at the beginning of last year are impacting the supply chain today.

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Edeka's online supermarket, Bringmeister, is launching a service which will enable groceries to be delivered straight into customers' fridges.

Increased convenience

A new Smart Lock system has been developed by Cary services, allowing time limited access to user's homes using electronic keys. The cost of the lock system is €9.99 a month. In partnership with this, Bringmeister will give customers the option to order groceries online and have them delivered to their house whilst they are out. The delivery drivers will be able to bring groceries into customers' fridges, hallways or cupboards as requested.

Developing the online offer in Germany

Bringmeister became part of the Edeka network in January 2017. Since then, the retailer has been expanding its capabilities in the online channel. With Amazon Fresh launching in Germany in 2017, retailers have started to increase the focus on their online services and begun to accelerate developments. Edeka started offering same day delivery in Berlin in August 2017, expanding this to Munich in December. This means that if customers place an order before 2pm, they can get their groceries delivered in an hour window between 6pm and midnight.

Kaufland, part of the Schwarz Group, is to revamp its distribution structure, according to reports.

Overhaul of network

Kaufland is overhauling its distribution network, moving from a centrally-managed operation to a decentralised business. The German retailer is taking a similar route to that of its competitors, Rewe and Edeka, restructuring its business around six regional distribution centres across Germany. This new distribution model will potentially be rolled out to other countries in which Kaufland operates.

Eastern European expansion

Earlier this year, Kaufland opened a €75m logistics centre in Croatia, marking an important step in the retailer’s investment in the country. The Lidl & Schwarz group entered the Croatian market in 2000 using the Kaufland compact hypermarket format. The retailer is now looking to expand further into Eastern Europe, with planned market entry in Serbia and Lithuania.
 

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