Customer expectations are shifting, focusing more and more on speed, cost, and convenience each day. The on-demand delivery market is competitive but essential to provide the experience customers are looking for.
Companies like Amazon, Uber, and other B2C companies with delivery as a core component of their operations have become part of our everyday lives.
Deliveries on demand have been set within a timeframe of about an hour by many service and product providers, but the aim is to further shorten this. But what is delivery on demand, and what are the downsides and advantages of on-demand delivery services?
What does DOD stand for and what exactly is on-demand delivery?
Delivery on demand is a methodology consisting of delivering orders only upon request. This can be applied to internal processes, such as reordering products for sale, as well as delivering the actual products to customers in a shorter period of time. It drastically reduces storage times for internal operations and significantly improves the customer experience when it comes to receiving a parcel.
The expansion of eCommerce due to COVID-19 and the rise in popularity of on-demand delivery apps means that more and more companies are facing the complexities of these delivery operations.
Often, the main reason why these operations fail is due to a lack of understanding and resources to manage these complex deliveries, which involve high volumes, often occurring simultaneously, and a short window between order acceptance and product dispatch.
5 Pros and cons of delivery on demand
Deliveries on demand can unlock new financial opportunities, but certain departments will require more attention.
For instance, retail teams may need to allocate staff and time to prepare online orders with on-demand delivery. New processes and adaptations should be put in place, from warehouse management to shipping and delivery, with an emphasis on the customer experience through on-demand delivery via an app.
Pro: Higher customer satisfaction
With more flexibility, faster delivery speeds, and the convenience of being able to place an order anytime and schedule its delivery or receive it within minutes or hours, customer satisfaction will naturally increase.
On-demand delivery services make it incredibly convenient for customers to get what they want, when and where they want it. Instead of having to visit a physical store or restaurant, they can order online and have their items delivered right to their doorstep. Since these products are available 24/7 online, it can lead to greater customer satisfaction.
Moreover, many on-demand delivery services offer personalized recommendations and promotions based on a customer's order history or preferences, making online shopping easier and increasing the average order value (AOV) for eCommerce.
Pro: Broader audiences
By making your products more accessible in terms of time and delivery, you'll gain access to customers who may have been previously out of the delivery time and distance range.
On-demand delivery service can provide an online store with a competitive advantage over retailers without this option, as time-sensitive shoppers would prefer to shop from an eCommerce business that offers on-demand delivery.
This type of delivery can also fuel impulsive purchases, as customers can receive their orders within minutes or hours. Additionally, it caters to customers who don't plan ahead, allowing them to enjoy the convenience of last-minute shopping without experiencing long waiting times or delays.
Con: More pressure on time and delivery speed
To deliver the expected customer experience, fast and convenient deliveries are a must. Hence, speed is one of the biggest challenges of on-demand delivery services.
When automation and the right technology are not in place to support on-demand orders, the lack of speed can lead to inefficiencies and bottlenecks, resulting in poor customer experience and orders that take several hours instead of minutes to process.
Late deliveries and angry customers can quickly jeopardize a business, causing it to decline in a matter of weeks or even days.
Con: Higher costs
As expected, as the number of on-demand deliveries increases, the delivery costs that businesses need to support, whether on their own or by incorporating a delivery fee for customers, will significantly increase.
Last-mile deliveries are the most resource-intensive process in the supply chain, and companies in an economic crisis are constantly seeking opportunities to reduce costs. However, this can often result in issues that affect customer expectations and satisfaction. That's why implementing the right processes and tools is essential to fulfill customers' wishes without unnecessarily depleting resources.
This is particularly challenging in the hospitality industry, which often operates at a loss. For retailers, the profit margin tends to be bigger, and the delivery window more flexible.
Con: Need for software
One of the most crucial requirements for providing on-demand deliveries is a software tool that automates processes such as invoice creation, courier availability notification, order tracking, and issue alerts.
Developing or finding such software is not the most difficult part; rather, it lies in meeting the necessary requirements. The software needs to handle large quantities of information simultaneously, maintain clear and simple customer communication, have a user-friendly interface for both customers and sellers, and ideally be capable of sending push notifications that promote new orders and track the progress of the delivery.
Timely and reliable notifications reduce customer anxiety without taking up time from your online store staff or couriers. Achieving this is relatively simple when using tools like Outvio.
Conclusions: why it’s important to offer an on-demand delivery service
On-demand deliveries are here to stay. With customer satisfaction being as crucial as it is, it's time to structure your operations to gain speed and optimize efficiency, enabling you to process more orders with fewer resources and in less time.
Customer expectations primarily revolve around speed, cost, and convenience, which is why companies like Amazon are so successful in today's competitive market. On-demand delivery can propel your business forward, but it will require new processes and adaptations.
