Small businesses think smart to keep up with Amazon drones

You can wait a long time for a postman to show up in the country. amandabhslater

The biggest names in internet retail appear to be dramatically stepping up efforts to make delivering your online orders, fast, reliable and extremely hi-tech.

But in a week in which Amazon talked up its army of parcel-dropping drones that can bring you products in less than an hour and Google hinted at robots ringing your doorbell, a report also suggested that many people outside big towns can’t get their hands on online orders at all.

Consumer Futures has warned that customers living in rural areas may be missing out on online shopping because businesses either charge higher prices to deliver to them than they would to deliver in a city or, in some cases, refuse to deliver at all.

And it is not just customers; small rural businesses are struggling to get in on the action too. Just like the biggest brands, these businesses are turning to technology to boost their services, even if it’s not quite on the same spending level.

Missed deliveries, missed opportunities

Smaller outfits find it harder to compete in some vital services that make major brands like Amazon a success. When Amazon promises next-day delivery, for example, it means next-day delivery. This option has become an almost expected feature of online purchasing but independent businesses find it much harder to guarantee the swift arrival of your order.

Delivering to rural, often sparsely populated areas can also use more resources and therefore costs the supplier more. This might be less of a problem for larger companies, who do things in bulk, but when you are shipping small amounts of sometimes perishable goods to customers, the costs can be crippling.

This is all reminiscent of the problems pointed out by the Consumer Futures report about rural customers being left out in the cold. But from the delivery perspective it also forms part of the wider picture of large companies dominating the online race and smaller companies struggling to compete.

The main problem for rural businesses relates to a lack of options when looking for for couriers and how to charge for delivery. There is often a limited choice of couriers and in some places Royal Mail Parcelforce is the only option. Some businesses have investigated using other couriers in addition to Royal Mail but they end up paying twice: once to get Royal Mail to deliver to a major centre and then again to get the different courier to take the package from there.

Another key issue for businesses is whether to include delivery costs in the price of goods or to add a delivery charge at the end of the shopping process. Some find that customers go through the process of placing an order, then stop when they see the delivery charge and cancel the purchase.

Logistics issues like these are not a new phenomenon but the growth of the online marketplace and the potential for growth from online business means that getting around these issues is becoming more and more important.

Delivery hacks to stay in the game

Some are already making progress. Businesses sometimes share deliveries with others on an ad hoc basis, either piggybacking on an existing delivery or starting from scratch as a team.

One business owner that we spoke to drives to the nearest town centre to post things in order to take advantage of a greater choice of postage options, having realised how important it is to get the online service right. However, this businesses was only just starting out and this practice would be less viable once it started to expand.

But businesses of all sizes know their biggest competitors are offering products via the internet and few are likely to see opting out altogether as a sensible strategy. While these small businesses cant afford to develop their own robot delivery teams, they are investigating potential technological solutions.

The SMiLE project is exploring the use of technologies to support small rural businesses to improve their online visibility and logistics.

One option is using the Web and online social networking to make it easier for these small businesses in the countryside to share deliveries. The project is also exploring how to use technologies to automatically record detailed provenance information of products and associated logistics processes. This would allow businesses to differentiate themselves from larger businesses, such as the big supermarket chains, by providing more information about their products to the consumer. This could mean more transparency about food sources, and the people and processes involved in and around the product.

From a logistics point of view this information could be used to assess the performance of service providers such as couriers so that small businesses can assess their trustworthiness or reliability and make informed choices about who to use.

Working together is an important part of many of these technologies and that can be difficult. In a competitive market, businesses may not be particularly willing to collaborate with potential rivals. But if they do, they might stand a better chance in identifying the characteristics of their services or the incentives they can offer to customers that act as a positive trade off for online consumers against potential delivery issues.

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