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7-Eleven Japan is investing in technology to offer consumers a two-hour delivery service for smartphone orders.

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7-Eleven is testing a new on-demand delivery and store pickup service at ten stores in Dallas.

Digital transformation redefining convenience

While the retailer has built a leadership position in the traditional convenience store sector, the explosion of on-demand shopping options for consumers is redefining the whole concept of convenience. The 7-ElevenNOW service forms part of 7-Eleven’s digital transformation program. This is focused on enhancing the retailer’s physical stores and the digital experience for its customers.

Orders prepped at store for delivery or pickup

Customers using the app-based service can choose to have products delivered to their current location or to one of the stores in the trial. Products including snacks, cosmetics, gift cards, home goods and soft drinks can be ordered through the service. Once an order is placed for delivery, it is sent to a courier who picks up the customer’s prepped products at the store and delivers them to the customer’s location. Customers can pay for both delivery and store pickup via the app.

Complements other recent digital initiatives

7-ElevenNOW is one of several new services from the retailer. Recent initiatives have included the expansion of 7Rewards, its app-based loyalty program, the launch of 7-Eleven Bot on Messenger which allows consumers to engage with the brand from inside Facebook, and expanding Amazon Lockers for in-store package pickup. 7-Eleven has also been working wth Postmates for over two years on a separate delivery service. Initially launching in California in June 2015, this was recenlty expanded to over 1,100 locations.

Asia’s largest c-store network is committed to further expand in Malaysia through opening more stores and offering parcel locker services to facilitate delivery for online shopping.

Sales growth instills confidence in expansion plans

Group revenue for the third quarter has reached RM547.8m (US$23.31m), up 4.9% and it’s driven by new store opening, improved merchandise mix and consumer promotion activities. The average spend per customer has increased by 4% during the third quarter, compared with the same period last year.

Releasing the company’s third quarter results, CEO Gary Brown said the network of 2057 stores plans to open 200 new stores annually for the next 10 years.

Facilitate the growing trend for online shopping

7-Eleven will start offering parcel locker services in some of its outlets to provide convenience to shoppers who shop online. This is an integral part of an expanding online retail ecosystem that is beginning to grow in popularity in Malaysia.

Brown says the move is to make shopping as convenient as possible and is part of the chain’s evolution in the larger retail space that is not confined to bricks and mortar.

Interested in Seven & I Holdings?

Check out our Seven & I Holdings supply chain snapshot for an essential summary of supply chain priorities, latest network developments, and other key statistics for the retailer.

In the race to eliminate last-mile logistics costs, Suzannah Murphy looks at who's doing what in the busy world of drone innovations.

Let’s be honest: there’s been a lot of drone-related news this year. With all these stories flying around faster than the drones themselves, there’s no better time for me to sit down and see what all the fuss is about in the race to eliminate last-mile logistics costs.

 

It seems we can’t talk about supply chains without first mentioning Amazon these days (my colleague, Laura, wrote a blog post a couple of months ago on how the online giant’s making supply chain cool). So it’s no great surprise that Amazon’s putting its two pennies’ worth into the debate with its Prime Air drones.

Delivery in 30 minutes

Amazon’s Prime Air service will deliver packages up to 2.26kg via – you guessed it – drones. If successful, deliveries could be made 30 minutes after an order is placed. The unmanned delivery units can carry around 86% of the parcels currently delivered by Amazon via conventional means.

Source: Amazon

An uphill battle?

While it all sounds good on paper, there are a number of obstacles to get past (or fly around). In the US, for example, the online retailer has run into difficulties testing drones, as the degree to which the technology can be tested is dependent on the Federal Aviation Administration (FAA)’s strict policies regarding flying drones for commercial use.

It’s not all bad news for Amazon, though. Here in the UK, the Civil Aviation Authority (CAA) has just granted it permission to test three innovations: beyond line of sight journeys in rural and suburban areas, testing that drones can identify and avoid obstacles and flights where one person oversees multiple drone journeys simultaneously.

Just last week, I heard that Amazon has taken another step in developing its new delivery system. It’s obtained a patent for drones landing on docking stations located on tall structures, such as lampposts or church steeples, using them as delivery stations that would be connected to a central control station. Not only would the stations be able to unload parcels and recharge, they’d also be able to reroute drones in the case of bad weather. Of course, this patent may never come to fruition, but it’s an interesting possibility and shows us – once again – that Amazon really does think outside the box when it comes to its supply chain.

Improving the parcelcopter

Meanwhile in the logistics world, it’s no great surprise that DHL’s been looking into improving its version of the technology – the ‘Parcelcopter’. Its first generation model, launched in 2013, could fly 1km at 43km/h and carry up to 1.2kg. It was controlled manually and didn’t have any altitude difference capabilities. Fast forward to the first quarter of this year, and DHL’s (fully autonomous) third generation version can carry twice as much as the first generation model, has a range of over 8km at 70km/h and can cope with the varying altitudes of mountainous regions.

Source: DHL

Reducing last-mile costs

It’s an impressive amount of progress for DHL: not only is the drone fully autonomous, it’s able to fly over terrain that would be challenging for a human to cover. This means that DHL can significantly reduce last-mile delivery costs, which are especially high in rural areas. With its ability to automatically load and unload packages, it would be great to see the Parcelcopter trialled in urban areas next.  Perhaps this is where drones will find their niche – at least in the short term - in environments where benefits outweigh risks.

First US grocery delivery

There’s one retailer that’s managed to do what no others have yet achieved: a week ago, Seven & I Holdings made the US’ first ever drone delivery to a customer’s home. The drone was operated by Flirtey, a leading independent drone delivery company, and it autonomously transported hot and cold food from a local 7-Eleven store to a customer’s garden in minutes. It’s an historic moment – not only for Seven & I Holdings and Flirtey – but for what has been described as the ‘ultimate convenience’ delivery system for customers.

Source: Seven & I Holdings

The two companies now plan to expand the drone delivery tests, continuing to work closely together to transport immediate consumables from store to home: a first for the industry.

More than just drones

It’s not all about the drones in the race for last-mile optimisation, though. Starship Technologies have been testing their self-driving robots in Greenwich, London. Like Amazon’s Prime Air, DHL’s Parcelcopter and Firtey’s drones, these robots are autonomous, but they don’t fly – they use the pavements (sidewalks if you’re reading this in the US) as pedestrians do, traveling at fairly low speeds, holding a couple of shopping bags’ worth of weight and have a range of just over 3km.

Source: Starship Technologies

Starship says that its entire delivery platform is both energy and cost efficient, and aims to make the last-mile deliveries by robot completely free. This is great news for small businesses trying to move into ecommerce, where home delivery costs are currently very high. Starship Technologies is speaking at our Supply Chain Summit in November so don’t forget to book your place!

Innovation and exploration

It’s clear, then, that the threat of rising last-mile delivery costs has led to a significant level of innovation and exploration. It’s unlikely that every innovation out there will take off, but 10 years ago, who would have thought we’d be ordering goods online for delivery within an hour? Having said that though, that might not be fast enough, and it’s likely that the consumer thirst for faster, cheaper deliveries will continue to pile costs into logistics, but also present opportunities to win for those that recognise and respond in the right way.

So what’s next for the industry? I’m not sure – but I’m looking forward to finding out.

Suzannah Murphy
Online Content Co-ordinator - Supply Chain, IGD

Presentations

17/03/2017
An essential summary of supply chain priorities, latest network developments, and other key statistics for Seven & I Holdings.
26/07/2016
The ‘last mile’ is becoming an increasingly competitive place, as the food industry and disruptors continue to create solutions that make online shopping even more convenient.

Businesses around the world and from all sectors are currently investing heavily in robotics, aiming to develop greater efficiency and competitiveness In this report, IGD showcases 18 innovations in robotics from around the world which are relevant to the grocery industry, addressing the needs of businesses and shoppers.

Early Bird tickets available!
26-27 September 2018, London
Convenience continues to outpace big store formats. This year we have launched a two-day Convenience Retailing Summit to help you explore every opportunity, possibility and future trend to boost your business.

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