24-hour Presell Delivery in Fast-Moving Consumer Goods (FMCG), where the race to meet consumer demands is more intense than ever. In this era of instant gratification, the traditional norms of shopping and delivery have been completely transformed.
The latest game-changer in this dynamic sector? The rise of 24-hour delivery services. In this blog post, we dive into the heart of this revolution, exploring how this rapid delivery model is not just meeting but exceeding customer expectations, reshaping competitive strategies, and leveraging cutting-edge technologies to redefine efficiency in the FMCG industry.
Join us as we unravel the layers behind this trend, understand its impact on consumers and businesses alike, and compare it to 48-hour presell.
Whether you’re a retail enthusiast, an FMCG professional, or just someone intrigued by the ever-evolving landscape of consumer goods, this article promises insights into one of the most significant shifts in the industry.
The shift of FMCG companies to 24-hour presell
The shift of many Fast-Moving Consumer Goods (FMCG) companies towards a 24-hour presell delivery model can be attributed to several key factors that align with current market trends, customer expectations, and technological advancements. Here’s why this shift is occurring:
Rising Consumer Expectations: In the age of instant gratification, consumers increasingly expect quick, if not immediate, delivery. Services like Amazon Prime have set a high standard for rapid delivery, influencing customer expectations across various sectors.
Competitive Advantage: In the highly competitive FMCG market, offering 24-hour presell delivery can be a significant differentiator. Companies strive to outdo competitors by providing faster services, thereby attracting and retaining customers.
Technological Advancements: The integration of advanced technologies in logistics and supply chain management has made it more feasible for companies to offer 24-hour presell delivery. Technologies like AI for route optimization, real-time tracking systems, and automated warehouses significantly enhance operational efficiency.
E-Commerce Growth: The surge in online shopping has created a demand for faster delivery services. FMCG companies are adapting to this trend by offering quicker delivery options to meet online consumers’ expectations.
Supply Chain Optimization: Companies have been investing in optimizing their supply chains for efficiency and speed. This includes strategies like decentralizing warehouses, using predictive analytics for demand forecasting, and adopting just-in-time inventory practices.
Brand Image and Customer Loyalty: Fast delivery is often associated with superior service and efficiency. Companies that offer rapid delivery services can strengthen their brand image and foster greater customer loyalty.
Market Expansion Opportunities: Quick delivery services allow companies to tap into new customer segments and markets where speed of delivery is a critical factor for purchase decisions.
Impact of Social Media and Marketing: In an era where social media and digital marketing play a significant role in shaping consumer behavior, the ability to offer and advertise quick delivery can be a powerful marketing tool.
The move towards 24-hour presell delivery by FMCG companies is driven by the need to meet evolving consumer expectations, leverage technological advancements, gain a competitive edge, and adapt to the growing e-commerce sector. While this approach offers numerous benefits, it also requires companies to have highly efficient and responsive logistics and supply chain systems in place.
This shift, driven by customer demand and expectation does not come without challenges. Then again, does anything? This challenges are the cause why many companies still do not want to make the shift. Is this the right call? Let me lay out a comparison among 24-hour vs 48-hour presell, and you can have the final word.
Let´s dive into it.
24-hour Presell vs 48-hour Presell
24-Hour Presell Delivery
Customer Satisfaction: Faster delivery leads to higher customer satisfaction and loyalty.
Competitive Edge: Being able to deliver goods quickly can be a significant market differentiator.
Inventory Management: Rapid turnover of stock can lead to lower inventory carrying costs.
Market Responsiveness: Ability to quickly respond to market changes or sudden demand spikes.
Logistical Challenges: Requires a more sophisticated logistics system, which can be costly and complex.
Higher Costs: Faster delivery often incurs higher transportation costs.
Risk of Errors: The quick pace can lead to mistakes in order fulfillment and logistics.
Dependence on Reliable Suppliers: Requires strong and consistent supply chain partnerships.
48-Hour Presell Delivery
Cost-Effectiveness: Slower delivery can reduce transportation and logistics costs.
Stable Operations: Allows for more time to manage orders, reducing the likelihood of errors.
Flexibility in Supply Chain: Easier to manage and adjust for supply chain disruptions.
Balanced Inventory Management: Provides more time for inventory planning and management.
Customer Expectations: May not meet the growing customer expectation for rapid delivery.
Competitive Disadvantage: Competitors offering faster delivery might be more appealing to customers.
Market Trends: Might not be as responsive to sudden market changes or urgent demand.
Inventory Holding Costs: Potentially higher holding costs due to slower stock turnover.
In the context of FMCG and presell methods, the choice between 24-hour and 48-hour presell delivery depends on your company’s capabilities, market demands, and strategic priorities. The decision should align with your overall business model, customer expectations, and operational strengths.
24-hour Presell impact on OTIF
The On-Time In-Full (OTIF) Key Performance Indicator (KPI) is significantly impacted by the delivery method chosen — 24-hour versus 48-hour delivery. Let’s analyze the impact of each:
24-Hour Presell Delivery
Impact on OTIF:
Higher Pressure on Timeliness: The 24-hour presell delivery model places immense pressure on ensuring timeliness, as any delay is more likely to result in missing the tight delivery window.
Potential for Higher ‘On-Time’ Rates: If managed effectively, this method can achieve higher on-time delivery rates due to its focus on speed and efficiency.
Risk of Incomplete Deliveries: The rapid pace might increase the risk of incomplete orders if inventory management isn’t precise.
Reason for Impact:
The main challenge in 24-hour presell delivery is balancing the speed of delivery with the accuracy and completeness of orders. Any inefficiencies in logistics, supply chain management, or inventory control are more likely to disrupt OTIF performance due to the shorter time frame.
Impact on OTIF:
More Time for Fulfillment: The additional time allows for better planning and coordination, potentially improving the ‘In-Full’ aspect of OTIF.
Lower Risk of Errors: With more time to process and fulfill orders, there’s a reduced likelihood of errors that can affect OTIF performance.
Possibility of Higher Reliability: The longer timeframe can lead to more reliable delivery schedules, as there’s more leeway to manage unexpected issues.
Reason for Impact:
The 48-hour presell delivery window provides more flexibility in handling and preparing orders. This extra time can lead to more accurate fulfillment and timely deliveries, provided the overall supply chain and logistics are well-managed.
While 24-hour presell delivery can excel in ‘On-Time’ performance if executed with high efficiency, it carries a greater risk of incomplete or inaccurate orders due to the rush. Conversely, 48-hour delivery might offer a more balanced approach, enhancing the ‘In-Full’ aspect and potentially leading to more consistent overall OTIF performance. The choice heavily depends on the company’s logistical capabilities, supply chain robustness, and the nature of the products being distributed.
Related content: OTIF: Essential Key indicator to be competitive
Impact of 3rd party delivery in 24-hour Presell
Incorporating a third-party truck fleet for deliveries adds another layer of complexity and can have varying impacts on the OTIF performance for both 24-hour and 48-hour delivery methods.
24-Hour Presell Delivery with Third-Party Truck Fleet
Dependency on Third-Party Efficiency: Your OTIF success now heavily relies on the third-party’s ability to meet the tight delivery schedule.
Potential Communication Challenges: Coordinating effectively in real-time with an external party can be challenging, increasing the risk of delays.
Quality Control Issues: Maintaining consistent service quality might be harder when relying on external providers.
Reason for Impact:
The stringent timeline of 24-presell hour delivery requires high efficiency and seamless coordination. Any misalignment or inefficiency in the third-party’s operations could significantly impact the on-time delivery aspect of OTIF.
48-Hour Presell Delivery with Third-Party Truck Fleet
More Room for Coordination: The longer delivery window allows for better communication and coordination with the third-party provider.
Buffer for Unforeseen Issues: There’s more flexibility to manage and rectify issues that might arise during transit.
Potential for Enhanced Reliability: If the third-party provider is reliable, this could improve overall OTIF performance due to the more relaxed timeframe.
Reason for Impact:
The 48-hour window offers more leeway in handling logistics and supply chain challenges. However, the effectiveness still hinges on the third-party provider’s ability to fulfill orders accurately and on time.
Control and Visibility: Using a third-party fleet can reduce direct control and visibility over the delivery process, which is crucial for maintaining high OTIF scores.
Alignment of Objectives: It’s essential that the third-party provider’s objectives, capabilities, and performance standards align closely with your company’s goals.
Partnership and Communication: Strong partnership and effective communication channels are vital to manage the external fleet efficiently.
The impact of using a third-party truck fleet varies depending on the delivery timeline. While 24-hour presell delivery requires highly efficient and tightly coordinated logistics, 48-hour presell delivery offers more flexibility and potential for higher reliability. In both cases, the success largely depends on the capabilities and alignment of the third-party provider with your company’s operational goals and standards.
24-hour Presell Impact on inventory and warehouse
he impact on inventory and warehouse optimization differs notably between the 24-hour and 48-hour delivery models in a fast-moving consumer goods (FMCG) context.
Each model has its own set of requirements and challenges that influence how inventory and warehouse operations should be managed.
24-Hour Presell Delivery Model
Higher Turnover: Requires a faster turnover of inventory to meet the quick replenishment needs.
Safety Stock Levels: Might need lower safety stock due to frequent replenishment, but this depends heavily on the predictability of demand.
Just-In-Time (JIT) Approach: More reliance on JIT inventory management to minimize holding costs and reduce stock obsolescence.
Efficient Picking and Packing: Must optimize for speed in picking and packing processes to meet the tight delivery schedules.
Advanced Warehouse Management Systems (WMS): Implementation of sophisticated WMS for real-time inventory tracking and faster order processing.
Cross-Docking: Increased use of cross-docking techniques where inbound goods are directly loaded onto outbound vehicles with minimal storage time.
48-Hour Presell Delivery Model
Balanced Inventory Levels: Allows for more balanced inventory levels with a slightly higher buffer to accommodate for potential delays or fluctuations in demand.
Strategic Stocking: More opportunity for strategic stocking of goods based on predictive analytics and demand forecasting.
Diversified Inventory: Potential to maintain a broader range of inventory to meet varied customer demands.
Streamlined Workflow: Focus on a streamlined but less rushed workflow in warehouse operations.
Flexibility in Operations: More room for adjusting operations in response to order volumes and inventory changes.
Quality Control: Opportunity to integrate more robust quality control processes without significantly impacting delivery timelines.
Common Considerations for Both Models
Scalability: Ensuring that warehouse operations can scale up or down based on seasonal demand variations.
Automation: Investing in automation where feasible to improve efficiency and accuracy, like using automated guided vehicles (AGVs) or robotic picking systems.
Continuous Improvement: Regularly reviewing and optimizing inventory and warehouse operations based on performance data.
In the 24-hour presell delivery model, the emphasis is on speed and efficiency, requiring a highly responsive and dynamic inventory and warehouse management system. The 48-hour model, while still needing efficiency, allows for more strategic inventory control and provides greater flexibility in warehouse operations.
Both models require a careful balance between maintaining sufficient stock to meet demand and minimizing excess inventory to reduce costs. The key is to align inventory and warehouse strategies closely with the overall business objectives and the specific demands of the chosen delivery model.
24-hour Presell impact on Customer Service
Customer Service is in the center of onetime an in full delivery. Why, because it directly impact Customer satisfaction as we saw in the section about OTIF.
The impact on customer service between the 24-hour presell and 48-hour presell delivery models can be significant, but it varies depending on customer expectations and the nature of your products.
24-Hour Presell Delivery Model
Impact on Customer Service:
High Customer Satisfaction: Rapid delivery can greatly enhance customer satisfaction, especially in markets where speed is a critical factor.
Increased Customer Expectations: Customers may develop higher expectations for quick service, which can be challenging to maintain consistently.
Potential for Service Failures: The fast pace increases the risk of errors, which can negatively impact customer service if not managed effectively.
Responsive Service: Offers the ability to quickly address customer needs and demands.
48-Hour Presell Delivery Model
Impact on Customer Service:
Balanced Expectations: Customers generally have more moderate expectations regarding delivery speed, which can be easier to meet consistently.
Focus on Quality: Provides more time to ensure order accuracy and quality, potentially improving customer satisfaction.
Lower Risk of Service Failures: Reduced pressure on logistics may lead to fewer mistakes and disruptions.
Opportunity for Enhanced Communication: The longer timeframe allows for better communication with customers regarding their orders.
Customer Demographics and Preferences: Different customer segments have varying expectations regarding delivery speed.
Product Type: For perishable or time-sensitive products, faster delivery is often more crucial, impacting customer satisfaction more significantly.
Market Norms and Competition: In highly competitive markets where same-day or next-day delivery is standard, a 24-hour model might be essential for maintaining customer service standards.
Reliability vs. Speed: Some customers may prefer reliable and predictable delivery over speed, making a 48-hour model more favorable in terms of customer service.
While the 24-hour presell delivery model can have a major positive impact on customer service by meeting high-speed delivery expectations, it also comes with the challenge of maintaining a high level of service consistency and managing customer expectations. The 48-hour model, while potentially less impressive in terms of speed, can offer a more reliable and quality-focused service, which is also crucial for customer satisfaction. The best model depends on understanding your customer base, their expectations, and the specific context of your market and product range.
Related content: Customer experience and how to improve it in 7 easy steps
Is 24-hour Presell the right model is for you?
Determining which model is better — 24-hour presell or 48-hour presell delivery — depends on various factors specific to your business context, customer expectations, and operational capabilities.
Each model has its own strengths and challenges, and the “better” choice varies based on your company’s priorities and market demands. Here’s a comparative analysis:
Best Suited For:
Markets with high customer expectations for rapid delivery.
Competitive landscapes where speed is a key differentiator.
Businesses with robust logistics and supply chain capabilities.
Higher customer satisfaction due to quick delivery.
Potentially greater competitive advantage.
Faster inventory turnover, reducing holding costs.
Requires a highly efficient and responsive logistics system.
Higher risk of operational errors due to the fast pace.
Potentially higher logistics costs.
Best Suited For:
Markets where delivery speed is important but not the sole differentiator.
Businesses focusing on cost efficiency and inventory management.
Scenarios where the product range is diverse and requires careful handling or preparation.
More time for thorough planning and order processing.
Lower risk of errors and improved quality control.
Potentially lower transportation costs.
May not meet the expectations of customers demanding very fast delivery.
Risk of inventory obsolescence due to slower turnover.
Potentially less competitive in fast-paced markets.
Considerations for Decision Making
Customer Expectations: Understand your customer base and their expectations regarding delivery speed.
Operational Strengths: Assess your company’s logistics, supply chain efficiency, and technological capabilities.
Market Competition: Analyze what your competitors are offering and what makes your service stand out.
Cost Implications: Consider the cost implications of both models, including transportation, warehousing, and inventory management.
Product Nature: Some products might require faster delivery due to perishability or market demand.
The better model depends on your specific business context. If your market differentiator is speed and your logistics infrastructure is robust, a 24-hour presell delivery model may be more advantageous. This is the reason why most FMCG companies are adopting this model. However, if your focus is on cost efficiency, quality control, and managing a diverse product range, a 48-hour model might be more suitable. It’s essential to align the chosen model with your overall business strategy, operational capabilities, and customer needs.
Embracing the 24-Hour Presell Delivery Model in FMCG
The shift towards a 24-hour presell delivery model in the FMCG sector marks a significant turning point in the way companies approach the market and consumer needs. This change is driven by several compelling reasons that highlight the evolving landscape of retail and customer expectations.
Firstly, consumer behavior has dramatically shifted in the digital age, with a growing demand for instant gratification. The ability to receive products within a day aligns perfectly with the modern consumer’s desire for quick and convenient shopping experiences. This shift is not just about meeting needs; it’s about delivering delight, enhancing customer satisfaction, and building lasting loyalty.
Secondly, the competitive landscape in the FMCG sector is fiercer than ever. Companies are continuously seeking ways to differentiate themselves, and offering faster delivery times is a potent strategy. A 24-hour presell delivery model provides a significant competitive edge, positioning companies as not just service providers but as leaders in innovation and customer service.
Technological advancements have also played a pivotal role. The integration of sophisticated logistics, real-time tracking systems, and predictive analytics has made the implementation of such a rapid delivery model more feasible and efficient. This technological edge is crucial in managing the complex logistics involved in 24-hour presell delivery, ensuring that companies can maintain consistency and reliability.
Moreover, the rise of e-commerce has fueled the need for faster delivery models. As online shopping becomes increasingly prevalent, customers expect not just a wide range of products but also speedy delivery. The 24-hour model aligns perfectly with the e-commerce boom, helping companies stay relevant and appealing in the digital marketplace.
Lastly, the 24-hour presell delivery model aligns well with modern inventory and warehouse management practices. It allows for more dynamic inventory control, reduces holding costs, and enhances the overall efficiency of the supply chain. This efficiency is not just beneficial in terms of cost but also in terms of sustainability, as it helps in reducing waste and optimizing resources.
In conclusion, the adoption of a 24-hour presell delivery model by FMCG companies is a strategic response to the changing market dynamics, consumer expectations, technological advancements, and the e-commerce revolution. This model represents not just a shift in delivery times but a holistic transformation in how companies approach customer service, market competition, and operational efficiency. It’s a forward-thinking approach that is setting new standards in the FMCG sector, paving the way for future innovations and growth.