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Your Neighborhood Mom-And-Pop Shops to Launch Insanely Smart Ordering and Delivery Services

Image result for app finger clicking orderingJoey is rushing home after work on a Thursday. The babysitter is coming at 7pm, and she will need some dinner too. Joey and her husband were supposed to catch a 7:45pm movie and they had agreed to grab a bite before the movie. But now, it’s looking like it’ll be best if Joey just order delivery for everyone. If she puts in an order now, the food, the babysitter, her, and her husband will all arrive at the house around the same time. Everyone will have some food in their stomach before the evening comes. While waiting for her train, Joey enters her phone number, email address, and home address and orders food from her corner diner restaurant. What dish will the app recommend for this hectic evening, having no information of Joey’s prior food ordering history, nor her personal associations?

Future Role of Artificial Intelligence (A.I.) in Restaurant and Food Industry

There are two areas where AI can be leveraged when it comes to the food and restaurant industry; essentially, AI can assist customers choose food items and then reduce the time and cost for the transport of those food items. For example, our protagonist Joey, she is about to complete her profile for a food delivery app she just signed up for. Without prior ordering history, the AI system, like a virtual assistant, can give Joey recommendations based on an aggregate of customer profiles that resemble Joey’s, as well as the when and where of Joey’s purchase. The advantage of using AI here is that once there are tens of thousands of consumer interactions, the system can gather insights and patterns to determine recommendations that “work” (given high take-rate to purchase, or high cart value) and those that don’t.

Another area where AI can be a game-changer when it comes to food and restaurant is logistics. Logistics is not just about delivery drones and robotic vehicles. Automation enabled by advanced algorithms have the potential to greatly cut delivery cost, through resolving communication inefficiencies at all stages of a deliveryIn the delivery of fresh or hot food, customers expect to be notified and kept update with regards to their food order, both on the food-making front and on the driver’s front. The more the customer is up to date with his or her order, the lower the possibility of customer dissatisfaction and number of non-delivery, and hence reducing the costs of customer services over all.

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Bias in A.I.: What Is to Be Blamed?

Countless incidents in recent years have prompted heated debates over bias in AI, especially when it comes to facial recognition software. Most of these stories revolve around how AI systems “unbaisely” reflect the worst prejudice and discrimination latent in our society. The industry has gradually worked towards re-training the data models given these the public outcries. But, what is really to be blamed here?

All AI systems, large or small, begin with a steam of dataset. There is nothing wrong intrinsically with mining the dataset in order to find correlations and patterns within. The problem occurs when what the data shows and then enacts is counterproductive for the very problem we are trying to tackle with the software. Another step to be taken in order to fix this problem lies in re-examining our own cognitive bias while creating the algorithm and interpreting the data output.

Helping Mom-And-Pop Shops Survive Using A.I.

When it comes to adopting cutting-edge technologies, local retails may have the upper hand, compared to large companies, which are extremely slow to change. However, this only applies to technologies that have the highest likelihood to enlist broader retail adoption; meaning, the mom-and-pop shops needs to be able to see an immediate, direct, and hard-line return on investing in these new technologies. An example of such a success is the adoption of payment gateway system—think “modern” point-of-sale systems such as PayPal or Square. These systems have leveraged fraud detection algorithms to protect customer transactions.

PayPal’s deep learning approach is able to promote transaction security by lowering the average fraud rate by one percentage point, to 0.32%. This translates to a saving of $20K a year for a restaurant that sees $2M in revenue annually, for simply switching to a new gateway system—that’s enough savings for being able to buy a new car every year!

The promise of AI in the future of retail is not to be overlooked. With technology such as Pathover’s logistics software, a mom-and-pop shop could reduce delivery costs by 6-10%, through simply switching a logistics vendor. Delivery costs for any order, regardless of the order amount size, can be as high as $20. Using advanced logistics software alone, the costs can be reduced to as low as $4. Given the convenience factor and as the demand for food delivery grows within the Millennial demographics, there are few restaurant ordering and delivery solutions that can compete with Mixbowl, Pathover’s all-in-one ordering and delivery software.

AI-powered commerce and logistics software Mixbowl significantly lowers the cost of food delivery for restaurants that makes it an obvious decision for consumers to order directly from restaurants and for restaurants to participate directly in the growing food ordering market.

For a restaurant that receives about three hundred online orders monthly, Pathover’s smart software Mixbowl delivers a savings of $56K. That’s enough savings to buy two brand new cars every single year, just by switching to the right delivery partner and software solution!

Customers like Joey also sees a lowered, or even waived, delivery fee. The advantage of logistics software is more pronounced for mom-and-pop shops because the savings represent a higher overall percentage of take-home profit, where bottom line is critical to the very survival of their shop.

At the end of the day, even though AI is revealing and amplifying some of society’s not-so-shiny biases and worst impulses, the very mechanism has the potential to greatly optimize prices and reduce costs through smart logistics and recommendations that work. It remains to be seen how would these unresolved issues around AI biases affect mom-and-pop shops that are using AI-powered software.

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Thank You Apple For Making Mummy the Head of Engineering. WWDC 2017

 

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Beyond Apple HomePod. Beyond higher RAM capacity in the new iMac. Beyond the speculation that Apple Watch will be a secondary display for a dexcom glucose monitor.

The greatest announcement in Apple’s WWDC keynote is the inclusion of a female CEO and “mummy” as the head of engineering.

When Toby Patterson who heads iPad’s software engineering began to demonstrate including a hypothetical app sales projection in his daughter’s assignment, which is about finding an idea for an app, I got excited not because users can now insert inline drawings into a typed note. At frame 116:25, under the “management team” header, Jacqueline (Toby’s daughter) is listed as the CEO and “Mummy” is listed next to Engineering and “Daddy” heads Sales & Marketing. The moment lasted fewer than 20 seconds but in those seconds, I envision a world where women are founders and are leaders in engineering. In that world, female founders and engineers are prevalent. It is the norm.

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Screenshot taken during the iPad demo

No, it is not about using deep learning technology to recognize handwritings and indexing it in spotlight.

The subtle implication of strategically titling these characters (Jacqueline, Mummy, etc) has a far reaching effect on women around the world. It tells a tale of when curiosity of knowledge is encouraged and shared among everyone, men and women. When women read, hear, or meet other members of the tech community that look like them and come from similar circumstances as them, they will add diversity to STEM fields and entrepreneurship. I caught the subtlety in the demonstration because I care about having higher representation of women in tech and in entrepreneurship. Apple used it as an example because it wants me to know that it, too, cares.

Last night, I was at an event hosted by a VC firm for the CEOs of its portfolio companies. The men to women ratio there was around 45:1. There were four females at the event in total. Only one of them was CEO. I was alone and it wasn’t a great feeling.

I believe that increased female empowerments today will speed the pace of innovation. In a world that Apple and other technology giants are building, we will look back and see that, not so long ago, female founders and engineers seemed all but alone, with STEM fields of study stereotypically assumed to be masculine spaces. But by allowing women see that, yes, they do and can have a seat at the table, the next generation of founders and engineers will continue to better reflect the world that they are seeking to understand.

Christiana
CEO of Pathover. Forever an engineer at heart.
6/5/2017

Death By A Thousand Clicks: The Internet is Killing American Groceries

It has happened in other industries from book to retail, in every city across the country, something that would have been unthinkable just few years ago: More shoppers are ditching the local stores and shopping online, particularly shopping for groceries. With brick-and-mortar stores closing at a record pace, the retail crisis is coming to American groceries- leading to a tougher outlook for the already razor-thin grocery industry.

Price Wars

For years, offering the lowest prices has drawn shoppers to be loyal to a particular grocery brand. Price wars thus have become prevalent. A store would cut prices to lure customers, then competitors would follow suit, each cutting a little more than the others, eventually pushing prices down close to the unit cost. The price wars helped consumers with overall lower prices, but led to very thin margins for grocery stores.

Falling Food Prices

Then, there is the threat of grocery prices falling fast. As food prices fall, retailers become more aggressive in trying to sell higher volumes in order to maintain revenue. It becomes a downward spiral.

Tech-savvy Millennials

Complicating the threats is the ever-changing taste and different shopping behavior of Millennials. They are raising the bar on customer expectations and personalized shopping recommendations, with the mind for best prices available and instant gratification. Millennials are doing more research online and shopping for unique health-focused brands before heading to the brick-and-mortar stores, and are going in with willingness to spend a bit more for convenience and instant gratification. Millennials define convenience in terms of service offerings such as meal suggestions, recipes, digital personalization, alert when a favorite item is on-sale, or a notification when a new product based on their diet behavior is introduced.

This seems to be a paradox: Millennials are more informed and price conscious than ever but are willing to spend more on intangible value added services such as click-and-collect and home delivery from the grocers.

It is an intimating time for a lot of the grocery stores. Groceries are everywhere and Amazon is certainly hungry for groceries. Even as the percentage of grocers offering shop online and pick up in store has increased from 15% to 23% from 2015 to 2016, there is still a shocking 77% who do not have such initiative. The significant challenge that is facing these grocers who do not yet implement an online shopping initiative is the costs of a full e-commerce solution that includes pick up in store from any store location and home delivery option. Pathover team, which is made up entirely Millennials, understand the predicaments facing the industry and has designed and developed a solution tailored to overcome these challenges.

Grocery Re-invention: Grocery 360

Pathover’s new service, called Grocery 360 (G-360), provides an end-to-end solution: G-360 builds a product catalog for a grocer, connects that catalog to customer-facing point-of-sale systems, and uses artificial intelligence to generate optimal schedules for delivering products from grocery stores to their customers. By eliminating inefficiencies in the end-to-end delivery process, Pathover only needs to charge a flat fee of $0.99 on every order. There is no set up fee, monthly subscription fee or commissions for the grocers. As a result, grocers pay less to deliver groceries, and customers pay less to receive those items; meanwhile, grocers are insulated from the complexities of building and managing an ecommerce site, manually updating the product catalog, upfront investment in delivery fleet, and payment processing. G-360 provides a simple interface for automatically creating new ecommerce sites and integration with point-of-sale systems, but G-360 is also compatible with preexisting ecommerce frameworks. Thus, if a grocer already has an ecommerce site, then integrating with G-360’s logistics (pick up and delivery) feature is easy.

Online grocery is mission-critical. But selling online is not just about taking orders through a website. To do this well takes time and attention. Stores that succeed are good at selling direct to consumers – building technology from the ground up, integrating teams skilled at navigating online marketing’s ever-shifting terrain and managing the customer experience through fulfillment and delivery. G-360 automates most of these processes and applies artificial intelligence to help grocers manage large numbers of products, recommend up-and-coming products and manage customer post-purchase experience.

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With G-360, even small or niche grocers can reach large online audiences, and compete for the loyalty of consumers who are rapidly shifting their purchasing activity from brick-and-mortar stores to the online realm.

Accuracy, efficiency and sophistication: These are all values that Pathover focuses on to help grocers leverage their e-commerce platform. Click-and-collect and grocery home delivery will continue to grow as consumers demand more convenience and now is the right time for grocers to adapt to online innovation and disruption.

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Pathover helps automate all the manual processes to save time and cost so that any supermarket in the nation can offer its own online grocery shopping and free delivery to its consumers from its own website. Stores maintain their strong store brand while being able to use similar technologies as what Amazon or Walmart have built.

Join the movement at pathover.com or contact us at partnerships@pathover.com

Recovering lost customers online

The nation’s largest grocery conference took place in Las Vegas from Feb 10-15. Large regional chains and smaller markets around the country have come together in one place to celebrate the contributions they have made to the overall success of the grocery industry.

Pathover team met with grocery leaders of the community, retailers and technology solution providers to share best practices and consumer behavior trends based on both analytical data and real world examples.  The ability for IGA and NGA members to quickly adapt to the fast-changing grocery landscape to enable extraordinary shopper experiences is the true point of differentiation for these independent grocery retailers.

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Pathover team member Tea and Ryan chatted with IGA chairman & CEO Mark Batenic

This year’s topic explores the transition of shopper behavior from traditional to digital while continuously delivering exceptional values in the millennial and multigenerational world.

Many grocers have already invested in establishing a web presence, and for some, they went so far as to offer online grocery shopping, whether it is for in-store pick up or for home delivery. However, having an e-commerce presence alone is not sufficient to increase online sales volume. Shopping cart abandonment is extremely common in online shopping; understanding why it happens and how to recover these lost shoppers are critical in building a successful online shopping offering.

Why Customers Abandon Online Shopping Cart?

Even though the e-commerce market is growing rapidly, online retailers should embrace the fact that, the average online shopping cart abandonment rate is 68.81%. For first-time website visitors, the rate is shockingly high–99%–with the truth that 75% of them who abandon indeed intended to make purchases. You may question, why they still leave?

Without Free Delivery Option

According to UPS’s research, 54% of U.S. online visitors abandoned their shopping carts as the shipping costs made the total purchase cost more than expected. 50% of them said that they didn’t make the purchase immediately because they wanted to get an idea of the total cost with shipping to compare against other sites. Also, 44% of the visitors left because their order values weren’t large enough to qualify for free shipping. Another statistic also shows that 35.7% of the e-commerce abandonment happen when shoppers see the shipping costs. This shows how price-sensitive online shoppers could be especially when it comes to shipping cost that doesn’t add any value to consumers. Therefore, failure of providing free shipping option could potentially lead to a higher rate of e-commerce abandonment.

Lack of Streamlined Website Navigation

Based on Statista, 25% of online shoppers abandoned the cart when the website navigation was too complicated; 21% abandon when the process was taking too long.

In the whole navigation process, the check-out stage is the most critical part and meanwhile, impacts severely on the e-commerce abandonment. Research indicates that 46.1% of cart abandonments occur at the payment stage. In addition, 37.4% occur at the checkout log in. That’s why a seamless process, particularly at the stage of payment is very significant to intrigue customers to make immediate purchases with a pleasant navigation experience.

Consumers are Not Ready!

Suppose that the online retailers have made everything perfect to enhance shoppers’ experience, will all the visitors press the buy button? The answer is NO. 49% of online visitor stated that they abandoned the shopping cart because they were not ready to purchase but just wanted to save the cart for later. It’s understandable that consumers need more time to make the purchasing decision due to various reasons, such as needing to consult with significant others or with insufficient budgets to buy now. What online retailers could actually do is to actively follow up with the consumers—by researching on the reasons behind their cart abandonment and reminding them to buy—via display ad retargeting, email remarketing or other channels. This facilitates online retailers to gradually earn customers back and convert their interests into sales.

Online shopping cart abandonment is unavoidable but can be continuously improved. The fundamental solution for online retailers is to completely understand different customers’ needs when visiting the websites, improve the causes that prevent customers from buying immediately, and finally to attract these customers back with solutions.

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Pathover helps automate all the manual processes to save time and cost so that any supermarket in the nation can offer its own online grocery shopping and free delivery to its consumers from its own website. Stores maintain their strong store brand while being able to use similar technologies as what Amazon or Walmart have built.

Join the movement at pathover.com or contact us at partnerships@pathover.com

How Artificial Intelligence Can Save Grocery Stores

The biggest trade show Consumer Electronics Show (CES), which was held from Jan 5th – 8th 2017 in Las Vegas, has become a familiar event for many of the country’s top companies to scout the latest trends, from a connected magnet that can find a lost cat (it’s a joke!) to Intel’s mixed reality Project Alloy that can allow the users to see the world around them while remaining in the virtual space.

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Image 1: Lost Cat Magnet
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Image 2: Chris Bosh using Intel’s Project Alloy

The future of commerce lies in a digitally connected world. Artificial intelligence (AI) as a concept has existed over three decades, but it is only now that data, processing, and storage have become abundant that there has been a resurgence in interest. AI is software that is capable of doing cognitive functions that we associate with human minds, such as learning and problem solving at a speed where human minds simply cannot match.

AI in Grocery

Grocery industry is a $680B market, and like all giants at the pinnacle of their power, it is not clear the grocery stores are sufficiently paranoid about what might come next. As demonstrated in the recent launch of Amazon Go concept store which uses AI technologies like computer vision, voice-recognition, IoT sensor, etc to eliminate the need for cashiers and checkout lines, the surprising fact is that the technologies powering the experiences for this revolutionary change are all typical in any automated situations.

Machines may not be able to understand as well as humans yet, but they certainly illustrate how automation can and will eliminate certain repetitive and manual labor work. The conspicuous absence of comparable functionalities such as ordering online, same-day delivery, customer data analysis makes it hard to believe that majority of grocery stores are not falling behind Amazon Grocery. At the time where traditional in-store grocery sales is declining as more shoppers are moving online, there are two immediate areas of focus any grocery store should use AI for.

AI Focus 1: Turning Customer Data into Personalization, into Revenue

AI’s ability to sift through, remember, and learn from vast amount of information can get the brick-and-mortar grocery stores closer to dealing with the complexity of factors that can impact a consumer shopping behavior, from determining exactly why customers purchase at what time interval to geographical preference for products. Not only will this hugely benefit the grocery stores by encouraging more sales from those shoppers and helping them focus on high-margin products, but it could also be especially valuable for customers who choose to leverage voice-assisted devices to make daily purchases.

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Image 3: Google Home vs Amazon Alexa

Amazon’s voice-based assistant Alexa and its embodiment, the connected speaker Echo, may one day be able bring life voice as the new user interface, as in the ability to create a recipe, order the ingredients from its Amazon Go store, and send request to deliver an order to a customer’s home in two hours, all based on shouted instructions by the user to the wireless speaker. Imagine this: the consumer simply needs to say, “I am going to make an Italian dinner for two. Each meal should not be more than 500 calories. All ingredients need to be organic and gluten-free. I need the groceries by 6:30pm today.

AI Focus 2: Cutting Costs by Automation

One of the most promising applications for AI is to make a welcome impact in customer experiences. Traditional tasks such as finding logistics companies and managing customer services through call centers and emails are expensive. AI not only represents a blank slate for improving and innovating customer shopping experiences, with the right vision, companies can use it to thrust stores on an accelerated maturity path to increase efficiency and thus reduce costs.

Advanced software companies such as Pathover has successfully transformed the last mile delivery by enabling last-mile delivery to become more affordable. But last-mile process consists of more than just the actual delivery. Pathover includes other optimization methods to reduce grocery’s operating costs even further.

Chatbot / Virtual Concierge

Chatbots are virtual, intelligent conversation agents applied to variety of customer engagement scenarios. In short, chatbots are sophisticated computer programs designed to simulate conversation with humans online.

With the AI chatbot from Pathover, consumers could talk to a virtual agent from the stores they order the goods from via traditional SMS texts to inquire about the order status or to re-schedule package delivery without involving a staff member from the grocery store.

Mining Data

Pathover’s core competency lies in its self-learning systems to mine data (customer, sales, product, and travel data), comb through millions of combinations to find the cheapest delivery options and recognize patterns. With advanced machine learning, Pathover technology enables grocery stores to execute on actionable insights based on sales performance at any given time so the online store (and/or physical store) can evolve as fast as consumer preferences.

Stores that use Pathover software can see the last-mile delivery cost to be on average of $0.28 per mile, compared to $1.7 per mile directly from Postmates or $1.95 per mile from Uber without using Pathover. In addition to significant cost savings, stores using Pathover software enjoy at least two times the basket size as the order minimum.

And this is what happens when AI and machine learning come to the grocery store.

AI is not just a curiosity reserved for the large engineering powerhouses like Apple or Google; it is the technology most likely to disrupt the low-margin grocery industry as the need for manual work and human operations will rapidly become obsolete. AI technologies should not be treated as a cost center. It is an investment in the future. With imagination, AI can catapult any store to the frontier of innovation.

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Pathover helps automate all the manual processes to save time and cost so that any supermarket in the nation can offer its own online grocery shopping and free delivery to its consumers from its own website. Stores maintain their strong store brand while being able to use similar technologies as what Amazon or Walmart have built.

Join the movement at pathover.com or contact us at partnerships@pathover.com

Amazon has Go. Now what?

On December 5th, Amazon made a revolutionary change in its grocery business—Amazon Go—and on customers’ experience of future grocery shopping. Amazon Go allows customers to self-serve during the whole grocery shopping journey. Only three actions should be taken by the grocery shoppers: (1) scan the Amazon Go’s mobile App code connected with credit card information while entering the store, (2) pick up the grocery products, and (3) leave the store directly without having to wait for the long checkout lines. To battle in the wars of the transformative grocery business, Walmart also launched a new store format, Walmart Pick-Up and Fuel recently, offering free and same-day pick up of online grocery orders as well as fuel services to customers.

With sharp growing types of grocery stores invented, traditional stores are now facing immediate threats of reducing market shares by missing out consumers’ current and potential expectations of their grocery shopping.

Convenience is what customers value now

Observing the progressions of the grocery business, convenience is what customers aim for and what fundamentally changes the industry. For instance, e-commerce and same-day delivery enable customers to place grocery orders without geographical and time constraints. In addition, self-service stores with integrated IoT (Internet of Things) applications, like Amazon Go, allows customers to save time waiting in a long line while still being able to enjoy the in-store shopping. Moreover, the online order-offline pick-up stores, such as Walmart Pick-Up and Fuel, satisfy customers by having them easily check the grocery orders and fuel up their cars at the same time.

Thus, there is no doubt that traditional grocery stores should think about how to keep competitive in the market without providing the incentives of convenience that makes customers’ lives easier.

Data tells you the stories of customers

Retain customer shopping data. What else differentiates innovative grocery business from traditional brick-and-mortar stores? Big data! It is true that traditional stores can still collect data in stores (e.g. what’s shoppers’ purchasing behaviors and which aisle is most popular, etc.) However, you cannot imagine how huge and precise the data could be collected by Amazon when the company is capable of tracing the customers’ navigation on the e-commerce website and available to identify in-store shoppers’ behaviors with cameras, sensors, and microphones that institute the whole Amazon Go experience.

Once the stores can gather a larger and more precise data set about the customers, the stores can own better understandings about their customers. It then gives the store a solid foundation to provide more customized business solutions, such as giving specific coupons to a certain group of customers based on their current and previous purchases.

Anyone could be your competitors

The emerging and disruptive innovative business models are increasing which translate into a message: grocery stores will likely to face more and more non-traditional competitors. For instance, meal kit delivery services (e.g. Blue Apron, Plated) attract customers to subscribe and receive organized groceries for an easier cooking. Consumer packaged goods (CPG) companies also plan to take the initiative of its e-commerce business. Take Mondelez as an example. The company used to sell its products through physical retailers and online retailers like Amazon. However, to sell a unique holiday version of Oreo snacks, Mondelez is going to handle the whole e-commerce and delivery logistics by itself.

It’s promising to see how grocery shopping experience innovates to positively improve grocery business’ profits. However, before making a revolutionary step forward, consider which inventive strategy will best fit your business based on your resource constraints and customers’ needs.

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Pathover helps automate all the manual processes to save time and cost so that any supermarket in the nation can offer its own online grocery shopping and free delivery to its consumers from its own website. Stores maintain their strong store brand while being able to use similar technologies as what Amazon or Walmart have built.

Join the movement at pathover.com or contact us at partnerships@pathover.com

Same-Day Delivery: Moving From “Nice-to-Have” to “Need-to-Have”

This morning ShopRunner sent a promotional email encouraging customers to shop at its e-commerce partners’ site. ShopRunner is a service that requires an annual membership fee to get unlimited free two-day shipping from its many retail partners. Free two-day shipping has worked as a disruptor in the e-commerce space ever since Amazon introduced Amazon Prime in 2005. But here in 2016, two-day shipping model alone might not be competitive for long term growth as customers are demanding faster delivery. Shopping online is close to meaning receiving the order as soon as it is placed.

The shift in consumer behavior is not just within the expectation on delivery speed. Recent movements of traditional brick-and-mortar stores doubling down on e-commerce as well as pure e-commerce sites building physical stores suggested that integration of offline and online may be the future of retail and that the wave of “Offline 2.0” reflects changing consumer trends.

An integrated offline and online channel for the retail and grocery industry can prove to be a “win-win” situation for consumers who are struggling to find the right balance between convenience of shopping online and hand picking fresh items such as fruits and vegetables. There is much at stake for traditional retailers and supermarkets, which have seen an increasing demand for online shopping and fast home delivery.

The new norm for online shopping will be to receive orders the same day. According to the Business Insider report, as many as 25% of shoppers said that they would consider abandoning an online shopping cart if same-day delivery was not an option, and 40% of US shoppers said they would use same-day delivery if they did not have time to go to the store. Yet, close to 50% of North America retailers have no plans to implement same-day delivery. This reluctance gives a strong edge to Amazon to build up its customer loyalty.

Variable Profitability of Last-Mile Delivery

As for retailers who are ready to offer a same-day delivery option, they face a range of concerns. Smaller retailers are mainly concerned with high delivery rates, as they often lack the bargaining power that allows larger competitors to offer cheap and faster delivery. The last mile delivery cost could reach to 50% or more of the total parcel delivery cost.

Meanwhile, a top priority for larger retailers is to meet varied customer expectations. To achieve that, they often offer multiple shipping options or annual membership program for discounted faster shipping. Still, many stores do not offer same-day delivery or store pickup, which are valued by consumers.

Outsourcing Last-Mile Delivery?

Fortunately, the emergence of technological innovations opens the door for new business model to allow retailers to offer same-day delivery while minimizing risks.

On-demand companies such as Uber and Deliv leverage crowdsourcing apps to help retailers eliminate the costs of building an in-house delivery fleet. Other marketplace deliveries such as Instacart, UberEats, and Google Express offer a website or app for customers to order goods from various merchants and deliver them at a scheduled time, enabling more same-day deliveries while helping retailers avoid labor costs of in-store fulfillment.

Saving cost and enhancing efficiency are crucial aspects of determining the success of last-mile delivery. Many retailers do not realize that they have several courier options and do not necessarily need to partner with one courier company exclusively to achieve lower delivery cost. Advanced algorithms and analytics can help optimize delivery operations, match right couriers to delivery tasks, route deliveries, and better address consumers’ expectations for speed, flexibility, and/or lower delivery costs.

Using Advanced Software for a Successful Last-Mile Delivery

Critical algorithms and analytics based software companies such as Pathover have enabled last-mile delivery to become more affordable. Pathover software in particular uses artificial intelligence to optimize the combination of courier options for the cheapest delivery cost per order and delivery route planning. Courier options include traditional carriers and crowd-sourcing couriers, and in the future driverless vehicles, drones, etc.

Advanced software such as Pathover that specializes in this space can help merchants automatically select and dispatch the best courier for each order, based on price, time of delivery, and store’s proximity to customer addresses. This type of software enables stores to manage deliveries well, and stores will be capable of enjoying immense profits.

To achieve this manually, a store is likely to have a difficult time combing through millions of combinations of courier and pricing options. To choose from one of them, a store would have to identify types of delivering goods, couriers’ space and weight capacity, the density of locale and the delivery time consumers ask for, etc. Regarding the delivery route planning, a dispatcher would have to be able to keep the track of the delivery location proximity, traffic condition, and so on. Stores may already perceive the complexity of the last-mile delivery pricing and planning.

Using the advanced software tools, stores can access the last-mile delivery market quickly, often with relatively low upfront investment and low operating costs. This is especially true for retailers who want to avoid operating their own fleet of delivery vehicles and employing full-time drivers, or dealing with third-party store shoppers (such as Instacart / Google Express). As an example, Pathover software charges only $0.75 per order and can guarantee an average of 71% saving in delivery costs.

A recent actual customer delivery that involved same-day delivery of 6.4 mile would have cost $18 using Postmates courier option, however, Pathover software automatically found and dispatched a cheaper alternative: a local courier company who made the delivery at $6.25 per package.

Software that offers optimization algorithms makes it easier for merchants to have the best delivery method for each order based on multiple criteria (e.g., cost, speed, volume) to better meet their customer expectations. Stores stand to benefit on lower delivery fees from the fierce competition among traditional and “on-demand” delivery companies.

With rising customer interest in same-day delivery but also rising delivery fees, stores need to consider the right software and company to partner with to build a robust system to make a seamless and efficient last-mile delivery. By owning the customers data and realizing consumers’ needs and analyzing the business capability, stores can offer customers flexible and attractive delivery options to maximize their satisfaction. Thanks to emerging technologies, last-mile delivery can be done automatically, seamlessly, efficiently (reducing delivery time by 5~15%) and cost-effectively. Same-day delivery will rise to become the norm for online shopping – protecting and potentially expanding customer markets.

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Pathover helps automate all the manual processes to save time and cost so that any supermarket in the nation can offer its own online grocery shopping and free delivery to its consumers from its own website. Stores maintain their strong store brand while being able to use similar technologies as what Amazon or Walmart have built.

Join the movement at pathover.com or contact us at partnerships@pathover.com