My first real job began when I was 12 years old. That exalted position was in a local neighborhood grocery store, long before the proliferation of supermarkets around the country. "On-line" ordering was very popular then, and my primary responsibility was to take orders over the telephone, laboriously record them in a ticket book, and then gather the items from the shelves and load them into two bushel baskets attached to my bicycle. From there, I would embark on my same-day (often same-hour) last-mile delivery. From my basket to your kitchen table—at that time, there was no better service available than that from your local grocer.
Since that time, the retail environment has been turned on its ear. Consumers started to warm to the on-site shopping experience, and retailers were happy to accommodate them. Shopping malls began springing up around the country. Some were huge and included restaurants, movie theaters, and other forms of entertainment. The first indoor mall opened in 1956, encouraging shoppers to come out and spend money in all kinds of weather.
In 1962, an Arkansas retailer named Sam Walton opened the first Walmart store in Rogers, Ark., forever changing the retailing landscape. That same year, Target and Kmart opened their first stores, joining Walmart in the rush to compete on low prices. As the country entered the economic recession of the 1970s, customers demanded even lower prices, and the discount retailers grew exponentially.
In the 1980s, the so-called "category killers" and club stores drove prices down even further. Costco and Sam's Club were launched in 1983, joining the rapidly expanding Walmart, the four-year-old Home Depot, and Best Buy, among others, in the chase for consumer dollars.
In the late 1990s, another game-changing force swept through the retail landscape. By 1999, the whole country seemed to be caught up in the mystique of the Internet and the allure of online ordering. Despite its promise of speed and convenience, e-commerce got off to a rocky start. The problem was that many, if not most, of the Internet retailers had invested enormous amounts in marketing and technology, and virtually nothing in distribution systems. During the 1999 Christmas season, nearly 50 percent of all online consumers experienced delivery problems. Of course, most of the issues are now behind us, and Internet sales topped $304 billion in 2014.
And now, we have perhaps the biggest retail supply chain game changer of them all—Amazon. Reinforced by the best technology available, with a network of over 100 distribution centers, Amazon seems determined to provide the best customer service of any retailer. Same-day delivery is being tested in various cities, and we have all heard about the drones. Amazon is also said to be considering several other unconventional local delivery options such as Uber—and even bicycle messengers. (It makes me wonder if I should have held onto my bicycle.)
But what about the competition—those companies that don't have vast distribution networks? They're learning that the real problem is not the much-discussed last-mile delivery; it's the point from which you're trying to fill and deliver those orders. Where are you going to locate your inventory? Right now, many companies, including Walmart, are experimenting with filling online orders from stores. But most of the stores were designed for on-site shopping and have limited space for shipping operations. As I've written before, I feel strongly that this is a wonderful opportunity to partner with a logistics service provider and ship your orders from its facilities.
The most interesting point to all this is the confirmation that there are few new delivery ideas, but old ideas can become relevant again with technology and fresh thinking—and maybe a new bicycle.
