Will same-day delivery ever become a reality in Australia?

Australia’s dramatic shift to online shopping is showing no signs of slowing down, putting increased pressure on retailers to provide fast, convenient and reliable delivery. As a result, the rush is on to win the same-day delivery race – but is it realistic in Australia? 

In the past three years, Australia Post has delivered more than 900 million parcels. In a country with a population of 25 million people – that’s a rapid rise in market penetration for online retail.  

Last month, the nation’s parcel provider Australia Post revealed that in the past financial year, a record 9.3 million Aussie households shopped online. Breaking all previous records set, online purchases grew almost 12 per cent compared with the previous financial year.   

While some global cities have started to see same-day delivery from major retailers and e-commerce leaders, we discuss the unique supply chain challenges that have made it difficult to introduce in Australia. 

The demand for same-day-delivery in Australia is growing 

During the pandemic, consumers were required to order essentials, medication, and fresh food – all preferably without leaving their homes.  

This dramatic shift in consumer behaviour accelerated the nation’s interest and expectations for a good online shopping experience.  

As a result, leading online retailers such as Amazon, Catch and The Iconic have stepped up to the challenge and have been offering same-day delivery. Usually only available for orders placed before a certain cut-off time in easily accessible areas such as inner Melbourne and Sydney, is it a sign of things to come? 

As large e-commerce and brick-and-mortar retailers strive to implement similar models, increasing the availability of same-day delivery services inevitably causes an expectation by consumers that they will be able to purchase most goods with a same-day fulfilment promise.  

Although same-day delivery is yet to become a key driver for companies in Australia, the implementation of Click and Collect/Deliver services during the pandemic makes same-day delivery the next natural step – but how realistic is it and what is holding Australia back? 

Why hasn’t same day delivery already happened in Australia? 

Until recently Australian customers didn’t expect retailers to offer same-day delivery, they were happy to wait a couple extra days to get their order. With COVID-19 and the pandemic shifting consumer expectations rapidly, businesses have suddenly had to adapt and switch from the previously acceptable 3–4-day delivery standards.  

Previously, the complex geographical nature of Australia deterred businesses from implementing same-day delivery. Australia faces unique challenges in terms of where its population live, and where orders come from. The vast size of the country means transport has a long way to travel, and by companies offering same-day delivery to certain customers, others who are more rural may miss out. 

The good news is the technology available is now advanced enough to make same-day delivery a reality, at least on the eastern seaboard where 80% of the nation’s population is located. 

A combination of the right last-mile logistics operation and strategically placed warehouses will allow businesses to reach their customers much quicker. As availability and normalisation of same-day delivery increases, it’s set to become a key strategy in meeting evolving consumer expectations. 

How can businesses update their processes to make same-day delivery a reality? 

There's a lot of options for businesses to make same-day delivery a reality. Warehouse technology, like autonomous mobile robots (AMRs), can significantly increase the speed of picking and packing in warehouses, getting packages out the door faster. Decentralising supply chains and the use of advanced technology to obtain more accurate delivery information can help businesses make faster deliveries and interactions with consumers. 

Drones for same-day delivery are also on the table and are already being tested by Project Wing (a Google-owned company) in flat, urban landscapes in Australia such as Canberra and Logan.  

Investing in these advanced technologies can help businesses differentiate themselves in the drive to offer same-day delivery in more markets. 

Meeting the same-day delivery challenge in Australia. 

Micro-fulfilment is also a rapidly growing market, allowing supply chain leaders to capitalise on infrastructure that is already available to them. This plan bridges the gap between 3–4-day delivery and same-day by strategically locating smaller fulfilment centres in key hubs instead of depending on one or two larger distribution centres (DCs). With a few DCs in densely populated areas, same day delivery becomes more manageable. 

There's an opportunity for businesses to use data analytics and evaluate their consumer base. If fulfilment and logistics partners can understand where the products are being sold, where the products are being requested for delivery, and which geographic area is looking at specific products at any given time – that data can be used to strategise more efficient fulfilment. 

 
Based on the information gathered, retailers can send in-demand products to different micro-fulfilment locations such as shopping centres or other dedicated facilities. Since stock is in place and ready to be picked, retailers can confidently meet consumer expectations of same-day delivery and push relevant messaging on the marketing end.  

A perfect example of how companies are implementing same-day delivery is by converting brick-and-mortar stores into mini warehouses. Typically, when a customer places an online order, they are able to select either 'Click and Collect' or 'Click and Deliver'. If all products are present on-site team members will pack the order, with it guaranteed to get delivered the same day. 

An Aussie case study: Chemist Warehouse and Körber in same-day delivery success 

Since COVID-19, Chemist Warehouse, Australia’s largest pharmacy retailer, experienced a huge increase in online orders, reaching even higher levels than previous Black Friday and Christmas peaks.  

As a result, the retailer launched Click and Deliver in 2020 across its Australian and New Zealand stores. This same-day delivery service from Chemist Warehouse and Körber offers Chemist Warehouse customers flexible and convenient delivery options. With this solution complementing the retailer’s previous sophisticated Click and Collect service. 

“We wanted to ensure that we could offer our customers the safest possible option to shop during COVID-19 restrictions. We knew that for many they felt it was a risk to leave their homes and shop in the traditional way, so we approached Körber to help us develop our existing Click and Collect solution to become a Click and Deliver solution,” Mark Finocchiaro, Managing Partner and Director, Chemist Warehouse Group said.  

The solution was developed in four-weeks by the Melbourne-based team. To gain faster fulfilment times, Körber developed a solution whereby the picking and packing of online orders is done in store, instead of from a central distribution centre (DC). When a customer selects an order on the Chemist Warehouse website or app, the Chemist Warehouse Order Management System (OMS) will check the stock levels in the stores closest to that customer to fulfil the order. 

The introduction of this solution and partnership with Körber gave Chemist Warehouse the capacity to fulfil around 200,000 orders a month, a significant increase on the previous 30,000. 

How can Körber help make same-day delivery a reality? 

As evident with the partnership between Körber and Chemist Warehouse, Körber provides many different technologies that enable and speed up processing in fulfilment centres.  

To make same-day delivery a reality, retailers need to know how quickly they can pick, pack, and ship out an order as soon as it comes in. 

Körber is well-prepared to support retailers and make same-day delivery a reality, with multiple software solutions, various automation, and workflow enablement technologies as well as stand-out micro-fulfilment strategies. 

To learn more about how our solutions can help make same-day delivery a reality for your business, contact us today.