There’s a maxim in delivery that the ‘last mile’ is the most difficult and expensive of all the miles. Estimates put it at 40 – 50% of the total fulfilment cost, and that’s before you factor in the additional costs of missed deliveries. Then add into the mix increasing consumer expectations around delivery speed, and delivered first-time success rates, and you see why businesses are looking for different solutions that offer both efficiency and agility.
In response, many bigger businesses, particularly in retail and grocery (and several we work with) have implemented successful ‘hub to home’ solutions. But smaller enterprises have been slower to catch on.
Yet in reality, there are flexible ‘hub to home’ solutions available to fit any size or type of business, but it’s an extremely good fit with groceries and perishables or any product that benefits from being delivered same day.
What is ‘hub to home’ delivery?
Not to state the obvious, but it’s a solution of two parts. Firstly, you need a network of smaller hub warehouses that mean your goods are stored much more closely to consumers rather than in typical larger, more centralised storage locations. Then you send your products out to these multiple hubs to be stored until it’s purchased and ready for fulfilment.
The second function is the fulfilment itself: getting the goods from the hub to the home of the shopper. That could be using a postal service or local dedicated couriers for same day delivery.
The advantages of using hubs
Hub networks with premises across the country offer an immediate opportunity for retailers to extend their reach and presence beyond their local areas without huge investment. They can operate as useful locations where consumers can come to and pick up purchases at their convenience. They can also serve as drop off points for returns.
It’s also flexible and scalable. You don’t need to hold all your lines with them all the time. You can change the products available according to demand. And you can use a hub to take on the challenges of seasonality. Special events, such as Mother’s Day or Christmas, can be demanding for retailers and hub networks offer a scalable solution.
And having multiple hubs in a single metropolitan area also has significant advantages too including cost savings and a lower delivery fail rate. Multiple hubs in a single city are especially advantageous if you’re a grocery firm and you want to offer delivery same day.
Holding your products closer to the customer also means it costs less to fulfil them and your delivery partner can also offer much more accurate ETAs and shorter estimated time slots. Same day delivery shouldn’t mean staying in all day.
To ‘bundle’ or ‘unbundle’ your HTH
Now that you’re sold on the advantages of a ‘hub to home’ approach, you have another decision. Do you prefer a ‘bundled’ or ‘unbundled’ service?
A bundled HTH service means a generalist company manages both the hub and the ‘to home’ delivery bit. It has the advantage of meaning you only need to deal with one company that will hold inventory within their hub network and then also take care of the delivery part of the journey.
An unbundled service involves working with two different service providers – one offering you with a hub network, the others dealing with the delivery from the hub to the customer. The benefits of this approach mean you have specialist companies dealing with different parts of the fulfilment process. And by working with a range of different delivery partners, businesses can offer their customers more delivery choices.
We’d go unbundled
Not just because we don’t offer bundled – we have looked into it. But because we believe in the importance of service flexibility, and that’s what an unbundled approach gives you. The ability to work with different partners to create a bespoke solution, powered by specialists in their respective ‘to home’ and ‘hub’ offerings.
Making this unbundled approach work requires those specialisms to work seamlessly together. Which is why we have a close working partnership with hub specialists Parcelly, to offer a flexible, but joined-up solution.
Parcelly has over 2,500 hyper-local ‘hub’ warehouses across the UK, and we can deliver, same day, ‘to home’ from any one of them.
If you’d like to know more about how we can help, give us a shout over at sales@gophr.com, or jump onto our Live Chat.
