Thursday, December 1 2022

The internet has changed the way most people shop and more and more we want to get the items we ordered quickly.

This gave rise to trade on demand, with deliveries supported by armies of on-demand workers. But it has also led to rapid technological innovation in the logistics sector. We spoke to Kashyap Deorah, founder and CEO of logistics application specialist HyperTrack, to learn more about the new phenomenon of “instant commerce” and what it means for businesses and consumers.

BN: What is instant commerce and what are some of its drivers in consumer and commercial markets?

KD: Instance commerce is the next step in the evolution of on-demand commerce. Like on-demand, instant commerce is about providing consumers and businesses with goods and services at the touch of a button, delivered exactly when they want them. Instant Trade takes demand a step further to reduce friction and respond within minutes, typically within 10 minutes. Instant commerce taps into two major trends: consumer categories that demand immediate gratification, and high-density clusters that warrant a micro-fulfillment ecosystem of stores and flexible workers.

The success of on-demand commerce over the past decade has accelerated the experience of instant commerce. The key drivers remain the same: customers want things done faster, and supply chain and workforce innovations can help.

BN: What’s going on with the global supply chain and have some of the issues from earlier this year eased or are they the same?

KD: Global supply chain challenges fall into several categories: health-related (e.g. the ongoing COVID-19 lockdowns in China), geopolitical (e.g. the Russian-Ukrainian war) and the mismatch between supply and demand (eg shortage of chips). Health and geopolitical challenges will continue to weigh on the global supply chain to inflate costs, although companies and governments will find other sources before the new year. The mismatch between supply and demand will ease over the remainder of the year as manufacturers catch up and reallocate capacity to match the supply of goods to their demand. Companies will source from Vietnam and other countries instead of China where it is possible to do so and European nations will seek other natural gas suppliers if Russia cannot reliably supply natural gas during the ongoing war with Ukraine. The middle mile and last mile will see greater automation as faster execution emerges as a core competitive advantage.

BN: How is technology, particularly AI and analytics, helping to enable instant commerce?

KD: Instant commerce requires matching customer demand with supply, both in terms of inventory and supply chain. It requires a lot of AI and analytics merging different types of datasets. For example, finding eligible and available workers nearby to pick at a store, servers to run a hot dog stand at a stadium, or drivers for a taxi service to assign to customer orders. This matching requires taking location and mapping data of customers, merchants, and drivers into account and merging it with business data to make decisions.

With the promise of delivering goods in 10 minutes or less, AI and analytics become crucial on three aspects of the supply chain, for example commerce. The first is to place dark stores in the right places (a dark store being a distribution center and not open to the public). The second is about sourcing the right inventory, which involves accurately forecasting demand for each black store and finally having the most effective analytics to create black store picking schedules and matching drivers with orders to be delivered on time to the customer.

In the last mile, AI is used to measure deviations in address, routes and service times, and loop learnings from these errors to better plan and assign the next order so customers, drivers and traders benefit from predictable execution times. For example, if delivery to a particular address still requires the worker to walk 50 feet to the right and back of the building to the service entrance, the address book is updated via AI to reflect this, so that future deliveries can be made to the service entrance directly instead of stopping at the main entrance. AI also helps improve forecast accuracy on historical data related to demand on a specific day and time of the week (example — demand for meat on Friday and Saturday), on specific dates of the week. year (example — festivals such as Christmas, Hanukkah and Diwali and specific religious observance times such as Ramzaan and Passover, to name a few) and seasonal activities for a geography including the seasons of soccer, football and cricket.

BN: Can you compare how AI is innovating in logistics and “last mile delivery” to how it is used with Google Maps or other GPS technologies?

KD: Google Maps, Mapbox and other GPS technologies have done a great job of mapping the world down to the last 50-100 feet. The AI ​​took real-time traffic data into account with the maps to optimize routes and improve forecast accuracy for estimated time of arrival or ETA. These technologies are directly leveraged in route planning for workers picking up goods (eg food, beverages, pharmaceuticals) and delivering them to customers.

Last-mile delivery of goods and fulfillment of on-demand services require a higher level of optimization for planning, allocating, and tracking orders through to completion. Reducing a minute or two in service time for each delivery in a day adds up quickly. Drivers make more money, customers get a better experience, and the company that orchestrates that achievement does more business. It’s a win-win-win.

BN: How has the gig economy affected the growth and complexity of last mile delivery?

KD: The gig economy has affected last-mile delivery of goods and services in multiple ways. Every order for goods or services requires finding a nearby, eligible, and available site worker, assigning the order to the worker, and following them through the fulfillment of the order. Traditional last-mile logistics technology for order planning, assignment, routing, and tracking was designed to handle scheduled orders with full-time, permanent workers who are assigned their routes the day before. This technology is unable to handle the two new variables that occur the same day: on-demand orders placed by the customer during the day and workers whose location and availability change throughout the day.

As a result, technology and last mile logistics operations require an overhaul: they must effectively combine mobile, maps and cloud to match scheduled and on-demand orders with site workers, route workers to site of the customer and follow them throughout the execution of the orders. goods and services. Operations teams should have a last mile logistics control tower, dashboards and workflows where they can track workers and orders in real time, identify a variety of risks in real time, and then address them proactively to remedy the situation.

BN: What’s up with logistics and why should consumers care?

KD: Logistics as we know it will change more over the next four years in terms of technology and operations than the changes seen over the past four decades. This means that old batch-oriented processes and tools for planning, dispatching, routing and tracking logistics will be replaced by real-time operations and technologies. This is great news for consumers, as they will have Amazon-like, Uber-like, and DoorDash-like efficiencies for all of their goods deliveries and home service fulfillment, plumbers, electricians and locksmiths to masseuses and beauticians.

Uber-it or DoorDash-it will no longer be new, it will become the norm, as all companies provide identical goods and services over the last mile. This will lead to more competition, better choices, and lower prices with more streamlined execution. Customers are king and they want their goods and services now, which will be the de facto standard across all industries, not just ride-sharing, taxis and food delivery.

image credit: [email protected]/


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