Exclusive Q&A: Capgemini looks at next-gen delivery
Automation, AI and outsourcing are all drivers of the latest developments in delivery.
Chain Store Age recently spoke with Siddharth Ram, VP, consumer products, retail & services at Capgemini, to get his insights on the continuing evolution of delivery in retail. Ram offered insights on the latest solutions, services and strategies that are supporting leading-edge delivery operations.
How significant a role do you expect automated vehicles to play in delivery?
Autonomous delivery is not a new phenomenon. It's been around now for at least four or five years. I'm seeing it play out in three different spaces. One is autonomous vehicles that are operating longer haul. It’s not uncommon to see an autonomous, autonomous truck making a 500-mile trip to go from one terminal to another terminal.
I have also seen autonomous vehicles operating inside the distribution center. They're actually autonomous robots, but they can go 10-to-12 meters high and operate within a three-meter base.
I would say adoption of autonomous vehicles for last-mile delivery is a little bit lower in terms of adoption, although I think their use for last-mile delivery in urban centers is a little bit less than in rural centers.
Most Capgemini clients are investing in electric delivery vehicles as well. In my view is there is still a lot of pilots of autonomous and electric delivery vehicles out there. I have not seen them being launched commercially at scale yet.
What are some of the other latest delivery tech trends?
For the last four or five years, we have seen a lot of artificial intelligence being embedded into software applications. For the last three years, we've started to see a lot more generative AI. So we have AI now making not necessarily better decisions, but decisions looking further out, and therefore you're able to have long-, mid- and short-range forecasting ability.
Therefore, you have a better demand forecast and better visibility all through your supply chain, meaning you can optimize your last mile delivery a lot more efficiently. Retailers are also starting to explore a use case for agentic AI in delivery.
Also, transportation management systems (TMS) have become a lot more sophisticated in the last few years, where you are now able to better control around route optimization, location of assets to certain routes, allocation of certain carriers to certain routes, getting better pricing on certain routes. All of those variables which used to be largely on a spreadsheet are now a lot more efficient with TMS, and therefore the TMS lets you plan your last mile delivery a lot more efficiently.
Another delivery trend exists around locker services. A lot of consumers are now much more ready to accept a parcel that is essentially stored in locker for self-service.
Finally, retailers are increasingly crowdsourcing or outsourcing last mile delivery through service providers. We’re all used to using those services for getting a taxi or ride hailing but extending that to become a crowdsourced fulfillment-as-a-service is also a trend.
[READ MORE: Q&A with Lindsey Mazza, global retail lead, Capgemini]
How can retailers support same-day delivery at scale?
I think same-day delivery is going to remain constrained a little bit until providers can figure out how to address the sustainability and the green aspect. That balance between economics and sustainability has yet to work itself out for same-day delivery.
You can have buttoned-up contracts and service levels and those types of guarantees in place. But at the end of the day, you have to balance efficiency and cost versus control over the experience.
This determines whether you want to keep same-day delivery in-house or whether you're outsourcing it to a third-party company. It’s just the lack of outsourced same-day delivery being a seamless experience and the lack of control is what prevents it from being more fully adopted. But the economics do work.
