The world is changing fast and to keep up you need local knowledge with global context.
Dion Chang has the rare ability to read trends as they are developing, and then give an accurate forecast of what’s next. Prompt, hassle-free deliveries will set you apart from competitors as online shopping gains traction, says the Flux Trends founder, in his latest piece published on BizNewz. Transport issues are also set to become a factor in mergers and acquisitions, reckons Chang. – JC
By Dion Chang*
The business mantra for the 21st century has shifted from “big vs small”, to “fast vs slow”, and it is proving to be true for the entire the value chain of a business, not just strategic planning: it’s imperative that a company’s operations are just as quick off the mark.
Consider the global boom in online shopping. Last year, the global growth in cyber shopping rose approximately 25%.
In countries like Germany and China, the growth was as large as 50% and 40% respectively. Even in South Africa, with low broadband penetration and a wary consumer market, the growth was a surprising 30%.
Understandably, these kinds of figures are the cause of much head scratching for bricks and mortar retailers, as well as shopping mall managements: and quite rightly so. A report earlier this year in the Financial Times predicted that in the next five years, 15% of Americas 13 000 malls would close down.
Over in the UK the retail soothsayers concur. The Centre for Retail Research (CRR) warns that British High Streets could see 20% of their shops close down within five years as more people turn to the Internet for their shopping.
While this is disturbing news if you are a retailer, there are already unexpected knock-on effects to the online shopping boom, bringing equally unexpected business opportunities.
As the online competition grows, the differentiating factor between online retailers has become the speed of delivery. Same day delivery is becoming less of a bonus but more of an expectation.
Unexpectedly, the demand for faster delivery times has now resulted in more traffic in large cities. More trucks on the road lead to more traffic congestion, which then impacts on the online retailer’s promise of a speedy delivery.
Offering discounts for off-peak deliveries has been one solution, but the most effective has been a revisiting of an older delivery system: bicycle couriers.
B-Line, a delivery company based in Portland Oregon, that has replaced their truck and van deliveries with electric tricycles, each of which can carry up to 270kg of freight. Similar companies like this are springing up in Boston, Vancouver and London.
In Brussels they have gone one step further. TNT courier service now deliver packages – in the middle of the night – to an inner city depot, which are then dispatched by electric tricycles come daybreak.c[With bike sharing schemes growing internationally, I’ll bet that bicycle maintenance services are next to boom.]
Effective and fast home delivery is suddenly the name of the game. In South Africa, online retailers have started outsourcing their distribution arm to fast food delivery companies like Mr. Delivery, as they have a far more effective delivery network in the suburbs compared to courier companies.
If you’re still in doubt about the business of speedy deliveries then consider the recent merger between two of America’s largest take-away delivery services: Seamless and GrubHub. Seamless covers about 12,000 restaurants in 40 American cities, mostly on the East and West Coasts, as well as in London.
GrubHub’s ordering services cover 20,000 restaurants in about 500 cities.
Last year, their combined revenue totaled more than $100 million. That’s a clever marriage of convenience: for the two companies as well as their clients.
Whether your new online shopper is hungry or desperate for retail therapy, there is, quite literally, gold up for grabs for the companies that cross the finishing line first.
First published in Sawubona, SAA’s award winning in-flight magazine.
* Dion Chang is the founder of Flux Trends. For more trends visit: www.fluxtrends.com
Also by Dion Chang: Business has become about fast versus slow, and guess who’s winning?
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