The last mile food and grocery delivery industry is growing rapidly as the shift from brick-and-mortar shops to online shops occurs. Last-mile delivery is no longer just about getting goods from the warehouse to the consumer; it is about meeting the needs and experiences of the customer. Over the past few years, customer behaviour and expectations have changed and so has the way last mile delivery companies operate. Companies focus on building long-term, interactive customer relationships and meeting their needs.
Getir is arguably one of the most successful companies in developing the ‘last mile’. The company Getir (which means “Bring” in English) – can deliver to your door in around 10 minutes. The program has been a huge success, raising €840 million since it was launched in Istanbul in 2015. The founder says his deliveries are probably faster than if you were to shop in a physical shop. Fast is their best feature “We offer the most fundamental thing that every person on the planet needs: time”.
Having their own algorithm
“70% technology, 20% retail and 10% logistics” is how they position themselves. A spokesperson for Getir says: “We are a technology company, not a technical support company, so we can use our own infrastructure to control the planning, retail chain, logistics and inventory management processes.” In this respect, Getir is a centralized entity: it owns its own stock, cars and warehouses. The team spent eight months jointly developing its own geographic information system (GIS) mapping technology. Getir then integrated data on demographics and consumer behaviour, pairing it with the GIS system in order to optimize the deployment of drivers and warehouse locations. This has a direct impact on its delivery times.
Operation model
Margins are also improved as Getir does not own the supermarkets’ warehouses. This allows the company to avoid typical owner/operator costs. Getir currently works with various direct suppliers and wholesalers, with a shop receiving around three to four deliveries a day. It plans to consolidate deliveries more over time. Getir has real-time visibility of each shop’s stock; items are scanned as they are sold and each order is tracked online. This ensures that his stock is updated in real-time.
Picking speed
In the UK, an alarm sounds in-store whenever a customer orders on the Getir app. Once the order is accepted by the picker on the handheld device, the timer starts. Picking speed is a key performance indicator that determines remuneration. If pickers meet performance indicators such as fast picking, low numbers of damaged or missing items and high customer ratings, they can earn up to £3 more per hour. If it’s a few items, the employee will do it in less than seven seconds. If there are 10 items, it takes approximately 45 seconds.
Now the company has been financing subsidies for users to use the software and users are growing all the time. Convenience can be addictive, but will customers pay for real shipping costs when there is no subsidy?
Reference:
https://sifted.eu/articles/inside-dark-store/
https://restofworld.org/2020/turkey-getir-grocery-delivery/
The blog of Logistics at MGEPS at UPV 