Unlocking the potential of in-home delivery

Date : 16 May 2018

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.

We recognise how supply chain excellence has helped companies grow, become more efficient and enhance team capabilities. Share what makes a successful supply chain.

Get the latest industry news and insights straight to your inbox with our range of newsletters.