In today's fast-paced world, convenience and speed are not just luxuries; they've become essentials. A staggering 85% of American consumers have expressed discontent with the delivery speeds offered by current shipping options, with over half of those aged 18-34 expecting same-day delivery. In response to this growing demand, the ecommerce industry has introduced a groundbreaking innovation and service: one-hour delivery.
In Western countries, the concept was first brought up in 2014 by Amazon. But today, this lightning-fast service is taking China by storm and is ready to transform the global ecommerce landscape. Imagine placing an order and hearing your doorbell ring an hour later with your delivery. Exciting? Absolutely. Complex? You bet.
Behind the scenes, orchestrating this intricate dance of speed and precision means strategic collaborations, technological advancements, and complex logistical choreography.
In this article, I’ll explore the concept of one-hour delivery and the roles of warehouse automation, third-party logistics companies (3PLs), and drones that make it not just a promise but a reality.
What Is One-Hour Delivery?
As the term suggests, one-hour delivery is a service that promises to deliver items to a customer within one hour of placing an order. It's a business and logistic model that will help boost your sales and brand loyalty, but it also requires a highly efficient, tightly coordinated, and well-optimized system.
Initially limited to only certain products and densely populated urban areas—Amazon offered this service with only everyday essentials eligible, and in select parts of Manhattan, New York, when Amazon Prime Now was first launched—the one-hour delivery service has grown significantly, broadening its product range and geographic reach. It’s now widely used to deliver fresh produce, food, court filings and legal services, diapers, medication refills, paper towels, and more.
In China, the fierce market competition has led to an even swifter expansion of ultra-fast delivery services. Ecommerce giants such as JD.com and Alibaba and rising players like MeiTuan have heavily invested in creating an end-to-end logistics infrastructure, including warehouses, delivery networks, and advanced technology for inventory management and order management, ensuring fast and efficient delivery.
Today, the race is not for one-hour delivery but 30 minutes. Alibaba's grocery retailer chain, Hema, is a testament to this shift, providing a 30-minute delivery service when customers place orders within a three-kilometer radius of their stores. Similarly, MeiTuan's healthcare division also guarantees a 30-minute doorstep delivery of medications.
Customers get real-time reports throughout this process with a precise countdown to their arrival:
- When the vendor is preparing their order.
- When the courier is en route to pick up their items.
- When orders are on the way to their destination.
- When items have been delivered.
How Does One-Hour Delivery Work?
As we go deeper into the world of one-hour delivery, it's crucial to deconstruct the critical components contributing to this incredible logistics and technology achievement.
Below, let's examine the key points that make this new service possible.
1. Warehousing and inventory management
To facilitate one-hour delivery, companies must maintain a network of strategically positioned warehouses and distribution centers close to their customers, usually near or in dense population areas. These warehouses are designed with cutting-edge technology to optimize efficiency for restocks and dispatches.
Often, these warehouses are equipped with advanced automation solutions such as Automated Storage and Retrieval Systems (AS/RS) and robots, which can locate and prepare items for shipment faster than you can imagine.
3. Advanced software and algorithms
4. Third-party logistics (3PL)
Unlike the Chinese model of controlling the entire supply chain, Western businesses usually use third-party logistics providers (3PL) to handle transportation, warehousing, order fulfillment, and returns. This approach allows companies to offer fast delivery without creating and managing their own logistics infrastructure, but it may add complexity to the process and impact the speed of delivery.
5. Drone and robot delivery
Remember when Elon Musk said there would be more robots than humans? Well, in the shipping and delivery industry, he might be onto something. A growing number of businesses are experimenting with drones and robots for delivery, a trend that’s notably picking up in China.
It all started with the COVID lockdown when human delivery personnel were off the grid and for locations under strict quarantine, like hotels for international travelers. A friend of mine had quite the experience when a robot became her daily meal delivery guy while she was under mandatory quarantine during a trip to China. It’s fair to say that she was taken aback by the futuristic room service.
According to the data, Alibaba Group's fleet of autonomous robots had successfully delivered over 10 million packages by the end of March 2022. Concurrently, JD.com has rolled out close to 400 self-driving delivery vehicles across more than 25 cities in China, providing an efficient delivery solution in scenarios from residential areas and business centers to university campuses and supermarkets.
6. Human courier services
In many cases, the final delivery step (aka last-mile delivery) is still completed by human couriers, even with a higher associated cost. Depending on the specific situation and geography, couriers may use various transportation methods to ensure the fastest delivery—cars, bikes, scooters, or walking.
The Future Is On Time, One Delivery At A Time
What does the future hold for one-hour delivery? We are still at the starting line of this race.
While it may seem like we're on the fast track to instant gratification, there are still plenty of challenges and technical hurdles to overcome. But if China's example is any indicator, we could be looking at an international ecommerce revolution. As automation and drone technology advance, we might need to redefine “fast” altogether.
The Ecomm Manager is your go-to source for the latest on everything ecommerce, including shipping software and delivery services. For a deeper dive into ecommerce logistics, with handy tips and actionable advice to boost your online business, subscribe to The Ecomm Manager newsletter today.
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