Sainsbury's Last Mile Delivery: Case Study

Introduction

A recent survey by Verdict Research of UK online shoppers showed that choosing a delivery slot is the fifth most important factor when choosing where to shop online. Unlike many retailers which offer lengthy time slots which in some cases are as long as a day, Sainsbury's has been offering one-hour delivery time-slots for the best part of a decade

Scope

*Discusses Sainsbury's last mile delivery processes and the technology assisting in meeting service levels

*Provides insight into last mile delivery best-practices

Highlights

Achieving high service levels is a key differentiator for Sainsbury's in the online grocery space

Real-Time Scheduler helped Sainsbury's improve service levels while cutting resource cost

Reasons to Purchase

*Offers insight into retail process and technology investment decision-making

*Highlights best-practices used to improve home delivery service levels


Report Highlights

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SUMMARY 1
Catalyst 1
Ovum View 1
Key Messages 2
Achieving high service levels is a key differentiator for Sainsbury's in the online grocery space 2
Oracle Real-Time Scheduler helped Sainsbury's to improve service levels while cutting resource costs 2
CASE STUDY 3
Background: 'Sainsbury's Online' business overview 3
Sainsbury's Online 3
Sainsbury's Online 'last mile' delivery 4
Aims and objectives: exceeding customer service expectations to achieve differentiation in the intensely competitive online grocery sector 5
Competition in the online grocery space is becoming more intense 5
Service is a differentiator and, for Sainsbury's, is top priority 5
Sainsbury's needed to improve delivery service levels 5
Solution: improving delivery service levels 6
Sainsbury's focused on improving delivery services within one-hour time-slots 6
Sainsbury's uses Oracle Real-Time Scheduler 6
Telemetry is used to improve road speed calculations 8
Successes: meeting the service level promise while improving efficiency and reducing the cost base 9
Sainsbury's is delivering on its service level promise 9
The grocer recognized a 20% cost base improvement in the first year 9
Online transactional data improve overall in-store product availability 9
RECOMMENDATIONS 11
Maintaining 100% service levels as the online business grows 11
As the online business grows, capacity could become an issue 11
Further improvements in road speed data could increase system accuracy 11
Volumetrics can provide the data required to almost eliminate manual processes 11
APPENDIX 12
Sainsbury's financials 12
Ask the analyst 12
Definitions 12
Further reading 13
Disclaimer 13
List of Figures
Figure 1: Sainsbury's Online facts and figures 3
Figure 2: A simplified view of Sainsbury's Online's retail supply chain, from supplier to consumer 4
Figure 3: Sainsbury's Online delivery-time-slot booking screen shot 7
Figure 4: Oracle Real-Time Scheduler 8
Figure 5: The majority of online shoppers tend to be affluent 10
Figure 6: J Sainsbury plc full year, 2010, 2009 and 2008 results 12

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