S2E10b #NRFLive SPECIAL - Last Mile Delivery Experiences with FarEye

When you hear, “last mile logistics” in retail, what do you think of? This episode continues our special podcast cross-over series, #NRFLive, with the This Week In Innovation podcast. In Part 2 of the series, hosts Ricardo Belmar and Jeff Roster speak with the CEO and CMO of last mile logistics provider FarEye to learn how they are helping retailers provide the most flexible, efficient, and sustainable delivery experience to their customers while keeping costs down! You’ll also hear some interesting consumer trends on delivery expectations that may surprise you!

Jeff and Ricardo recorded this session live, and in-person with Kushal Nahata, CEO, and Judd Marcello, CMO, of FarEye during the NRF 2023 Big Show. Special thanks to our sponsor Avanade for making this series possible by providing an amazing recording space in their NRF lounge.

Listen, or watch on YouTube, to see how much Jeff and Ricardo learn from the FarEye team! And regular cohost Casey Golden also joins Ricardo for a quick recap and introduction.

News alert! We’ve moved up to #18 on the Feedspot Top 60 Best Retail podcasts list - please consider giving us a 5-star review in Apple Podcasts! With your help, we’ll move our way up the Top 20! Leave us a review & be mentioned in future episodes! https://blog.feedspot.com/retail_podcasts/

Meet your regular hosts, helping you cut through the clutter in retail & retail tech:

Ricardo Belmar, a RETHINK Retail Top Retail Influencer for 2023, 2022 & 2021, RIS News Top Movers and Shakers in Retail for 2021, a Top 12 ecommerce influencer, advisory council member at George Mason University’s Center for Retail Transformation, and director partner marketing advisor for retail & consumer goods at Microsoft.

Casey Golden, CEO of Luxlock, and RETHINK Retail Top Retail Influencer for 2023. Obsessed with the customer relationship between the brand and the consumer. After a career on the fashion and supply chain technology side of the business, now slaying franken-stacks and building retail tech!

Includes music provided by imunobeats.com, featuring E-Motive, and Overclocked, from the album Beat Hype, written by Hestron Mimms, published by Imuno. 

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TRANSCRIPT

S2E10b Last Mile Delivery Experiences with FarEye

[00:00:00] Show Intro

[00:00:00] Ricardo Belmar:

[00:00:19] Hello and welcome to a special season two episode 10 part two of the Retail Razor Show. This is the second of our multi-part series recorded live and in person at the N R F 2023 Show in January. I'm your host, Ricardo Belmar.

[00:00:35] Casey Golden: And I'm your co-host, Casey Golden. Welcome to the Retail Razor Show, retail's favorite podcast for product junkies, commerce technologists, and everyone else in retail and retail tech alike. And for this special bonus, welcome N R F fans to our hot take hashtag N R F Live mini series.

[00:00:55] Ricardo Belmar: So Casey, just like our last episode, this is a [00:01:00] special podcast crossover event with Jeff Roster, host of This Week in Innovation podcast. We recorded this series live at in-person at the N R F Show in the fabulous lounge space our good friends at Avanade graciously allowed us to use.

[00:01:15] Casey Golden: Yes. A special shout out to our friends and sponsors at Avanade for giving you and Jeff such a great space to set up and record. These are not easy areas to find.

[00:01:26] Ricardo Belmar: Oh yeah, ab absolutely, absolutely. Especially at the Javit Center. . So, so let's get right to it then. So, Casey, when I say Last Mile logistics to you, what do you think of?

[00:01:36] Casey Golden: delivered to my door in two hours with a smile.

[00:01:40] Ricardo Belmar: All right. Well then this episode is really going to fascinate you hopefully as much as it will our listeners, Jeff and I had the pleasure of interviewing Kushal Nahata, the C E O of FarEye, and Judd Marcello FarEye's, C M O, and wow, did we learn a lot about how retailers can make their last mile [00:02:00] logistics not only more efficient, cost effective and more sustainable, but also do it while giving their customers a much better, and dare I say, personalized delivery experience.

[00:02:11] Casey Golden: Very cool. I'm digging it. And now I want to know how FarEye is doing all of that. it's a pretty tall order and let's face it, this is pretty much table stakes for any e-commerce operation.

[00:02:27] Ricardo Belmar: Yeah, I, I, I agree. And I'll just say that if you're trying to balance between getting your delivery costs down with giving your customers what they want, this is an interview you want to take notes from. I don't wanna give away too much, but be on the lookout for some interesting trends on what consumers want more than fast delivery from their e-commerce orders.

[00:02:47] Casey Golden: All right, now I'm getting a bit anxious. You know how much I love a good e-commerce discussion. Let's have it already.

[00:02:54] Ricardo Belmar: I'm with you. I'm with you. So let's jump in and listen to our interview with Kushal and Judd.

[00:02:58] [00:03:00]

[00:03:03] FarEye Interview

[00:03:03] Ricardo Belmar: Welcome everyone.

[00:03:05] I'm Ricardo Belmar and I'm here with Jeff Roster, host of This Week in Innovation podcast, and we are continuing our NRF 2023 series with two special guests, Kushal Nahata, the C E O of FarEye. Welcome, Kushal.

[00:03:18] Kushal Nahata: welcome. Hi everyone.

[00:03:20] Ricardo Belmar: And Judd Marcello, FarEye's CMO.

[00:03:22] Judd Marcello: Thanks for having us. Happy to be here.

[00:03:24] Ricardo Belmar: Thank you guys. Thank you both for being here. So Jeff, why don't we just jump right in?

[00:03:27] Jeff Roster: Sounds good.

[00:03:28] Ricardo Belmar: Sound good to you? All right, so Kushal, Judd, why don't you give us just a couple quick sentences so we're all familiar with what FarEye does.

[00:03:35] Kushal Nahata: Yeah. So look we, we are a last mile delivery platform. We essentially help all,

[00:03:40] of us as consumers get the products delivered to our doorstep at the time we need, with the choices we want to make.

[00:03:48] And we do that by enabling all the brands, retailers, and logistic companies to be efficient and do deliveries the way consumers need and want it.[00:04:00]

[00:04:00] Ricardo Belmar: Okay. Excellent. All right, so we've got four questions for you that we're really interested in hearing about. So start off, let's talk about e-commerce. Of course. You know, obviously we're. More e-commerce spending happening. Retailers have been ramping up their capabilities around fulfillment, delivering e-commerce.

[00:04:17] So with that influx in e-commerce spending, how are retailers reinventing their approach to delivering a better experience all the way to consumers doorsteps.

[00:04:26] Kushal Nahata: So maybe I'll go first. Look, COVID was the time when generally the e-commerce took off for every single retailer because consumers couldn't move out, they can't go to these stores.

[00:04:38] So everything happened online and one of the biggest challenge was the delivery network and capability didn't existed in the way retailers desired for it, and it was a sudden peak. So what we've seen retailers really innovating is going for a hybrid model.

[00:04:56] And by hybrid, what I mean is a part of it [00:05:00] is their own fleet, which gives them more control, gives them directly voice of the customer how and what they need it.

[00:05:07] And at the same time, they're partnering with third party delivery networks and which is not limited to let's say, top two or top three delivery service providers, but they're working with regional, with local delivery service providers as well. Now, how this helps is, it gives them scale, it gives them control,

[00:05:26] And it also helps them optimize the cost because the local regional players are sometimes more efficient from a cost perspective, but then the challenge is they can't scale nationally.

[00:05:35] So if you build that as a network, it becomes a super strategic competitive advantage for your brand. And that's what, if you see most of the top retailers have done in the last five to 10 years.

[00:05:48] Judd Marcello: And I think, you know, in addition to what Kushal said, if you're a retailer and you're a prioritizing that innovation in your, in your logistics, in your delivery logistics, in your operations, creating efficiencies, Then that enables you to [00:06:00] then focus on the customer experience.

[00:06:01] Cause that's the other area of innovation. And when you think about deliveries for consumer deliveries, the consumer now has so much control dictating what they want, where they wanna receive it, when they wanna receive it. You know, they've been fed the idea of next day delivery, same day delivery now. So now the consumer expectations are increasingly high.

[00:06:21] And I think if you're a retailer today, if you're focused on making the delivery experience, From order to where they're on the website and they click the buy button to when that package lands on their, their front doorstep. If you make that seamless for the consumer, if you make it easy and it's convenient for them, and they have a sense of control in that, that is one way to win that consumer and ultimately win them for the long term.

[00:06:42] Jeff Roster: So what exactly are you a platform that that gig economy folks can plug in ups, all that. And your, your ultimate customer is the retailer who's using you as a platform to figure out that last mile.

[00:06:56] Kushal Nahata: Yeah.

[00:06:57] So you need to understand that as a platform [00:07:00] to manage and scale deliveries. It could be through your own fleet where you are running some part of your fleet on your own, or it could be a logistic company.

[00:07:09] Who has thousands of fleets of their own. It could be third party delivery network, which is what you said the gig workers and all are connected to the platform. So one, and then there is the orchestration. When the order comes, what's the best way to deliver that order with a super delightful experience to the consumer.

[00:07:28] Judd Marcello: Mm-hmm.

[00:07:28] Jeff Roster: Wow. So you're making that decision whether it's going out on a Uber driver or it's going out on UPS carrier or, or some other strategy, some other retailer owned, owned mechanism 

[00:07:40] Kushal Nahata: Absolutely. And actually our journey starts a step before. So when you and I as consumers go onto the e-commerce platforms at the website, we help them, brands, show the right delivery options to the consumers.

[00:07:52] In terms of when you're scrolling a product, when can you get it delivered? And then also, so first is giving those choices to the consumers [00:08:00] so that they find enough options to place the order. Then choosing the right delivery provider, and then providing the live tracking and experience. If you want to change the delivery, if you wanna change the time, you can do that.

[00:08:15] And at the end, monitoring the entire journey from an operations perspective, that was it delivered on time and with a desired experience and with the cost that was planned for it or not.

[00:08:28] Jeff Roster: Wow.

[00:08:28] Ricardo Belmar: Oh, so so you really have components on the consumer side that address all the pieces the consumer wants, which is what you just described here, that all the communication points for that originate from the what they perceive as the retailer, right?

[00:08:43] Telling them it's shipped, when it's coming, how long it's gonna take, if there's a delay, et cetera. But you've also got behind the scenes for the retailer's benefit. You're optimizing this process. You're always trying to find the lowest cost method, I'll say right to, to get that done.

[00:08:57] Kushal Nahata: Absolutely. And look, [00:09:00] probably a decade ago, like each, each retailer or each store had its own experience. When you walk into the store, the colors, the way shelves are placed, the way products are placed. Now, the same thing you need to look at from an online perspective as well, that each brand needs to design that delivery journey, which is a part of its identity itself.

[00:09:19] What are the options do I want to give to my consumer? How will they track and in respective of who's delivering? It's a branded delivery experience, which is promised by the retailer.

[00:09:32] Jeff Roster: Wow.

[00:09:33] Judd Marcello: And it's also, and one of the other things to throw in there too, it's not just marrying the consumer side and the logistics side in a way.

[00:09:40] If you can get that right and you're in a position where you can innovate, it's also, it's how, what options you give the customer in order to receive their goods. So when you think about fulfillment and you think about innovation, like drone becoming more important, right? There are you, you can do drop off lockers if you're within a city.

[00:09:56] So you create more optionality for the consumer to make sure they [00:10:00] can access that product. So delivery doesn't necessarily need to be to their front door, it could be to a space that's convenient for them on their way home from work. So you know that innovation. Then once you're starting to get the logistics piece worked out, and then you, you understand what your capabilities are, you can layer in that kind of like customer experience, innovation into the offering.

[00:10:18] Jeff Roster: So you're the platform, the hub, you don't care whether that end deliverable is. Truck, a drone or a flying car in a few years, you, you don't, you don't care.

[00:10:28] Whatever the evolution of, of that, that that vehicle or it's a robot or Wow.

[00:10:33] Judd Marcello: Interesting.

[00:10:34] Ricardo Belmar: You, you could plug

[00:10:34] Kushal Nahata: we say it is, it's, it's definitely important what you deliver, but it's more important how you deliver 

[00:10:41] Judd Marcello: Yeah. 

[00:10:42] Kushal Nahata: Because as consumers, we are now hooked to the experience. How it's getting delivered to me. So brands really investing and improving their delivery experiene. And that's why last mile is super complex because one is the mode which is which type of vehicle is delivering, [00:11:00] but also if you go from where you're getting it delivered, it can be delivered from a store. It could be a fulfillment center, it could be a micro fulfillment which lot of companies are investing in, or it could be a distribution center as well. So you can have multiple points from where the products can be delivered. You can have multiple ways through which product can travel. But eventually what you want to optimize for is a delightful delivery experience at an affordable or a lesser cost.

[00:11:29] Jeff Roster: Wow.

[00:11:30] Ricardo Belmar: Wow. Well, so you've kind of, I think, almost answered the next question I was gonna ask you already, because, but let's maybe go in a little more detail because everything, you just kind of described Kushal, but I, I think it speaks really strongly to how, from the retailer's perspective, you're giving a much more efficient and optimized process versus the alternative, which would be that they have to do all of this themselves.

[00:11:49] Kushal Nahata: right. 

[00:11:50] Ricardo Belmar: Because you, you're giving them essentially this multi-sided platform that connects all the areas they need from consumer, retailer to whoever is doing the logistics. And do, [00:12:00] do, I mean, for example, do, do other third party logistics providers also plug in to you in order to get access to those retailers as well.

[00:12:08] Kushal Nahata: Absolutely. So look, the way we were trying to solve the problem when we started as FarEye was, how do we democratize a delightful delivery experience at an affordable cost for every single retailer? It shouldn't be limited to, let's say, top one or top two retailers because it'll not be an offline only, never be an online.

[00:12:27] It'll be an omnichannel the way we see and then we can, we can debate which category, how much percentage is online, how much percentage is offline. But as consumers, we want all options. We wanna get into the store, we wanna buy it from our website as well. We wanna get it today, we wanna get it tomorrow. Then sometimes we want it schedule delivery, which could be one week later.

[00:12:50] Or we would say, look, it's a furniture, or let's say it's a large appliance and I need to be at home to receive that product.

[00:12:57] So it can be only delivered between [00:13:00] three to 5:00 PM because that's the time I'll be at home. So now this is the options we all look, look for. And now just look it from a retailer's perspective, how much complex it is, and if you then decode the number of carriers in any single country.

[00:13:17] Like if we just talk about America, each city has few hundreds of local carrier.

[00:13:24] Ricardo Belmar: Hmm, wow.

[00:13:25] Jeff Roster: Each city?

[00:13:26] Judd Marcello: Yeah,

[00:13:26] Jeff Roster: city. Because I mean, is each gig driver and individual driver, or is that part of.

[00:13:33] Kushal Nahata: It's a gig drivers. Then you have small DSPs, which are serving in small neighborhoods. They're five to 10 drivers.

[00:13:39] These are small entrepreneurs, and you want to create employment. You want to give them an opportunity. The problem is they're not connected to the retailers, so building a platform where they're connected gives them more business and it gives access to the brands and retailers to be able to do affordable deliveries [00:14:00] across the country.

[00:14:02] Ricardo Belmar: Wow.

[00:14:03] Judd Marcello: I think the other thing too, when it comes to, we're talking about a platform now where you can plug in other vendors, and it it, one of, one of the benefits of that is it's ultimately visibility and the thing that you really need visibility of to be able to address all the complexities in the last mile, like Kushal talked about.

[00:14:18] The one consumer that has, you know, five or six demands in their individual delivery. And you have to hand that, handle that across scale. It's data, and you have to be able to have that le, that level of data visible to you in real time. So then ultimately you can optimize your entire operations through that.

[00:14:35] And that, that data visibility piece is, is the biggest component. This is software. So everybody, everybody, it's all run on data and be able to understand your kind of universe of delivery data and to be able to optimize that goes a long way to servicing the customer, but also probably the most important thing, stat, I'll throw a stat at you.

[00:14:53] 53% of all delivery costs exist within the last mile. So the last mile is in, not only is it [00:15:00] complex, 53%, so the last mile is complex, but it's also expensive. So the more you can do to decrease complexity and decrease cost, the better it is for your business. 

[00:15:09] Ricardo Belmar: And and that 53%, I'm sure that's the biggest single piece the whole. 

[00:15:13] Kushal Nahata: Absolutely.

[00:15:14] And like at NRF, a lot of retailers come down to our booth today. And I think two, three different top patterns. If I say one, we work with one or two carriers, it's getting expensive. Everyone is increasing rates. December itself a lot of those top carriers have increased their rates, which is a public news.

[00:15:34] We want to reduce the risk, but at the same time, we want to have control because if we can't track, if we can't promise a delivery experience, we will lose the customer. So you wanna reduce the cost by an ability to work with multiple carriers, but at the same time, you wanna have more control. And that's where I think the platform or a software plays a [00:16:00] critical role where you can not only orchestrate the right carrier, but you can track and then you use performance as a way to allocate more business. 

[00:16:09] So it's somewhere a self incentivized model that you do deliveries on time, you'll get more business. If I do late, I'll get lesser business. So it automatically corrects. And I think some part of it around efficiency and around sustainability also ties in because if you try to look at it, look sustainability and cost, I don't think they are kind of on opposite sides.

[00:16:35] I think they're primary on the same sides. If you're a super efficient company, Like if you produce what is getting a hundred percent consumed, you are a sustainable company in one way.

[00:16:47] If you are able to have minimum number of kilometers to deliver to the consumer you are in sustainable company, but you're not just sustainable, but you're profitable as well because you're spending less [00:17:00] in terms of fuel.

[00:17:01] You are having needs for lesser number of drivers. You need lesser number of vehicles to get products delivered as well. So, feel efficiencies and sustainability are fundamentally

[00:17:10] sim connected problem. Specifically when you try to look at from a delivery and last mile perspective, like another pattern which we are seeing, retailers have started giving options to consumers that you can get it delivered same day, but here's a carbon friendly or a more sustainable delivery as well. And we don't need all products same day. But there was no incentivization for us to wait for another day or so, and, we want control. We want, as consumers control with us and we wanna make an informed decision.

[00:17:41] So this just small option of a carbon friendly delivery with a small green color. We seeing consumers go and just click it there because they feel we are okay. And they also feel confident because they are making the choice. It's not really mandated to them. You're not taking away a [00:18:00] same day delivery choice from them.

[00:18:01] But you're saying it's, it's again, like we all want to be more sustainable. We want to be informed and we wanna make our own decisions. So I think that's where the technology really plays a critical role where you're able to combine it and give it to the consumer's hand to make those choices.

[00:18:17] Ricardo Belmar: And do you think it's trending more in that direction on the consumer side, that consumers want to click on that sustainable option

[00:18:23] Kushal Nahata: It's is

[00:18:23] Judd Marcello: absolutely

[00:18:24] Ricardo Belmar: day delivery?

[00:18:25] Kushal Nahata: So couple of options, like a lot of big retailers, they started where you are ordering, let's say, each day. They started saying we'll combine all your orders and deliver, let's say, on a specific day in a week. And consumers are okay with that because for them also, it's easier to get all the packets or all the stuff together.

[00:18:43] Then other is if you want fast, you can get it, but you are okay to wait. And that's also helping. And somewhere they're also incentivizing back the extra money to the consumer where you're saying, we'll give you a gift coupon of $1 if you wait for two days. So [00:19:00] you're getting sustainable, you're getting some money back and you don't need it today.

[00:19:05] So you are actually happy that ways as well. And they're saying, look, I'm a more sustainable consumer and I'm more informed in that respect.

[00:19:13] Jeff Roster: Wow. Who holds those orders? If somebody wanted to consolidate three or four different orders, are you holding that merchandise in some warehouse or the retailer or how, you know, how, how would you orchestrate that?

[00:19:25] Kushal Nahata: Yeah, and that's a great question. And that's where a lot of these micro fulfillments

[00:19:29] Jeff Roster: question. You could tell I'm a logistics guy. I don't wanna own that inventory.

[00:19:33] Kushal Nahata: a hundred percent. And that's where a lot of these micro fulfillment centers and dynamic planning is now started in the systems.

[00:19:39] Jeff Roster: Oh, I see

[00:19:40] Kushal Nahata: where based on the delivery date, you're setting up a pickup time and you know the efficiency of your network, you know the delivery time of your network.

[00:19:48] And that's where I feel like logistics has really changed in last couple of years. It's become a hardcore data play now, like at any stream, you need to be able to [00:20:00] plan, you know exactly how much time it takes to move it from point A to point B. And what are the options you have now once you have that data that decisioning is taken care by ai or by optimization platforms to really get those things together and not making you hold inventory for a long term?

[00:20:19] Judd Marcello: Hmm. That's, you know, it's one of the things that Kushal likes to say is that any company, any retailer or e-commerce company that considers themselves customer centric really needs to be a logistics and delivery company today.

[00:20:30] You know, because, because there is, there's so much of, of what we do that is based on that, what they do is based on deliveries. You have to optimize that for all the reasons that we've been talking about.

[00:20:39] Jeff Roster: Very cool. Very interesting.

[00:20:41] Ricardo Belmar: Yeah. So, let's talk about the returns process because obviously, and I think we're all gonna hear a lot about this during nrf, is, is that the return situation

[00:20:49] it is so dramatically increased. I, I think you, you clearly must be uniquely positioned to help retailers with that whole returns logistics process.

[00:20:57] Judd Marcello: Yeah,

[00:20:58] Kushal Nahata: Absolutely. So look, [00:21:00] there's one perspective which I have, and recently we've seen a lot of companies move towards that, where I would say the free returns it was never free.

[00:21:08] Judd Marcello: Yeah.

[00:21:09] Kushal Nahata: someone paying for it

[00:21:10] Judd Marcello: so many days

[00:21:11] Kushal Nahata: while we were exploiting it.

[00:21:13] Jeff Roster: the the most expensive thing in the, in the world's a free lunch. There is no free lunch. Dad told me that 40 years ago. It's still true to this day. Nothing is as expensive as a free lunch.

[00:21:24] Kushal Nahata: Hundred percent. And so lots of these companies are moving away from free returns to you pay a fee, at least a delivery or a shipment fee. And this is just to make each one of us a little more responsible for what we are buying unless there's a product fault.

[00:21:40] Judd Marcello: sure.

[00:21:40] Kushal Nahata: So that's one part which we are seeing. But then the other is really optimizing the returns.

[00:21:45] See there are certain product types specifically, I would say in furniture and white goods, where the cost of getting the product back from consumer to the warehouse, doing the quality check and putting it [00:22:00] back for a sale is more than the price of the product 

[00:22:03] Judd Marcello: itself. It's so, it's so funny you mentioned that over the holidays spending some time with family. My brother-in-law bought, he has a pool out in the back of his house, bought a fire pit probably about four by four. Fire pit. It came dented. They called the company. The company said, we'll get another one out to you this week and you can keep the dented one because, and it was an expensive product.

[00:22:22] I mean, we're talking, you know, hundreds of dollars and they. It, it's, we don't want it. It's gonna be too much of a hassle. You keep it. And they're like, what do we do with it? We said, they said, we don't care. We'll just get you a new one,

[00:22:32] Kushal Nahata: So collectively, if you look at it, right, the cost of moving the product back from consumer to the warehouse, then adding the entire process cost to get it back to the supply chain.

[00:22:44] And then it could be that you wanna sell it again. Or the lot of companies which have started the refurbished platforms as well, where they've rebranded and they're kind of selling for less for some of these products. I think the same example Judd said maybe it's dented or maybe it's not a hundred percent the same, [00:23:00] but you get it at a super cheap price as well.

[00:23:02] So that's one side of it. But also logistically, how do you really optimize? And the, the interesting part is it's dynamic, so it's not static. Like you can't predict these 50 products or these 50 orders will be returned. You can do a certain ratio, but you don't know which products, which consumers would actually do the return.

[00:23:23] And that's where we see last mile actually super dynamic as well, both from a forward and a reverse journey. And by doing a lot of these real time dynamic optimization, you are able to reduce the cost. A lot of times the vehicles are coming back empty, so you can do a lot of these returns in those empty returns as well when the vehicle is trying to come back.

[00:23:45] Or you can plan one week, two weeks forward based on your forward journey and use the same trips or same vehicle. To do the returns as well. That helps you reduce the cost. You partner with the e-commerce platform to launch what is called [00:24:00] as a re-commerce and make that products available at lesser price.

[00:24:04] So you're kind of a, making it more sustainable because you're not just throwing away the products or you're not giving it free. Like the example Judd said, like, because in that case, all of us would just go for free, and as you said, there's nothing. Call is free lunch ever. It's one of the most expensive part of the thing.

[00:24:22] And then charging the consumer as well, I feel is maybe it's just a small basic fee, but just makes it more intelligent and more known to, if you're ordering something, we really need it, or we just trying to just shop around and maybe return back.

[00:24:39] Jeff Roster: Yeah. You know what's so interesting about that? Oh God, it was probably seven or eight years ago where I first had a real conversation with an executive of one of the big companies out there that was really passionate about returns. Never spent 10 seconds thinking about it. And from that kind of anecdotal conversation in a bar to today the amount of conversations around it returns how expensive [00:25:00] returns are and how in some ways there's responsibility for the consumer to be maybe a little more judicious about returns, and then the counter is retailers and manufacturers have to be very, very serious about sizing and all the, I mean, so it's not just one side or the other, it's, it's this problem that everybody owns. But I think there's technology solutions for that, and I think we're sort of in the process of seeing that.

[00:25:24] But I mean, I've probably, in the last three months I've heard more discussion about. we can no longer do free returns. It's just not sustainable. And which is an interesting argument on the sustainability side. So you're not, your position is not a takeaway from a consumer, but do you understand the cost of doing this. right. I, I, I'm just, any way to keep something from coming back in is fantastic from my perspective.

[00:25:46] Kushal Nahata: Absolutely.

[00:25:47] And I think you made a great point. It's not just the consumer, it's all the brands and the retailer side as well. So, and we've seen a lot of our customers who use the returns as well. So one part of a solution is it gives you insights [00:26:00] why the products were returned, and then you can bucketize and see the top buckets and you'll find interest.

[00:26:06] So one of the, with one of the customers, the top most reason,

[00:26:10] The image of the product shown online versus what this received as a product was different. Now these are things which is part of the control which business. So you fig if you want to reduce the returns, see collectively, and we can have sub-segments in retail, but it's about 30 to 35% of overall retail is online and one of the three orders.

[00:26:36] It's kind of return cross categories. So if you look at it, there's almost a starting double digit return orders or return revenue, which is at risk of the total gmv which a business is having and which is lot of, so I'm talking about 10 to 15% of a gmv, which is flowing back to the retailer, which is a lot of money if you try to [00:27:00] look at it.

[00:27:00] Now, if you a, make it more selective for the consumer by giving some of those options. But as a brand, if you figure out these are the top three reasons why consumers are returning my products or based on specific SKU specific regions, and just use that data to optimize, I think we've seen huge value in overall returns.

[00:27:20] Also reducing by brands, improving the way they are making promises to the end consumers. And then also on the size, as you said, the sizes are not exactly. 

[00:27:30] Jeff Roster: sometimes they're not even close and, and I'm, I'll say that as a is a man, I mean it, the, the, the range is, insane and that, so that needs to get fixed, that need that, that's on everyone.

[00:27:40] And I think hopefully, I think what's really interesting is I never, ever would've called returns as a trend two years ago, three years ago today when, you know, cuz we're, Ricardo and I are gonna, are being asked constantly. What do you think the big trends are? Better management of re of returns. I wouldn't say it's the number one trend, but it's, it's definitely in my top.

[00:27:58] It's near the top

[00:27:58] Ricardo Belmar: near the top. Yeah.

[00:27:59] Jeff Roster: the [00:28:00] cost is, I mean, it, it hits every, it hits everything. It's a, it's a revenue sink, it's a sustainability issue. Bring 'em all on. Let's fix this problem.

[00:28:09] Kushal Nahata: Absolutely. Look, the top trends, at least we are seeing at Fareye, one is definitely optimizing the cost of delivery. That's like 59% of the retailers say that's their number one goal for 2023. And that obviously links to the returns part of the things as well, because that's the overall cost.

[00:28:25] The other we are seeing is moving from pure speed to a committed delivery promise. So I think that's, that's an evolution we had as a, a overall community where it's not about delivering, deliver to me as fast as you can, but make a promise and deliver within that promise. I think that is the great progress I would see as a community.

[00:28:49] And the third is more towards sustainability. Which kind of ties in, I don't see all of these as separate. I think they're connected. 

[00:28:55] Ricardo Belmar: All, connected.

[00:28:56] Kushal Nahata: And the fourth one is what you said as well, which is [00:29:00]managing returns well, both from reducing it, and then also what do you do with the products which are returned.

[00:29:05] Ricardo Belmar: Right.

[00:29:05] Jeff Roster: Good stuff.

[00:29:06] Judd Marcello: It's it's, it's inter, you know, Jeff, earlier on in the conversation, you, you suggested our, our CU primary customer is a retailer. You know, and as somebody, you know, I'm a B2B marketer today, but I used to be a B2C marketer, and I think the mindset that we have is our primary customer is really the end consumer.

[00:29:21] You know, if, if we're, if we're focused on the end consumer and building a proposition that will make things better for them and ultimately make them repeat customers, then our, our, our, our customer, the retailer, is gonna wanna do more work with us and ultimately, you know, deliver a better experience, delivery experience for their consumer.

[00:29:36] That's the way we have to think about it. Consumer first

[00:29:38] Ricardo Belmar: you're, you're really driving that brand loyalty for the retailer, right.

[00:29:41] Judd Marcello: That's right.

[00:29:42] Ricardo Belmar: the decision you're providing and kind of my take away from what Kushal you were saying is really it's that the promise they're making to the customer is becoming more valuable than the speed.

[00:29:53] Judd Marcello: Yeah, 

[00:29:54] Kushal Nahata: Absolutely. And some of the I would say industries within retail as well, if you look at, [00:30:00] let's say furniture or let's say white gloves, which weren't really as advanced as parcel deliveries, but now they, as consumers, we saying it doesn't matter.

[00:30:10] We want the same experience. We want to track where the order is. We want to be at able to reschedule if we want to do that. And so a lot of.

[00:30:18] Furniture big and bulky companies as well. We are seeing the same trend where they're trying to digitalize their supply chain, get realtime visibility, and then start optimizing.

[00:30:29] Ricardo Belmar: Good stuff.

[00:30:30] Jeff Roster: Good stuff.

[00:30:32] Ricardo Belmar: Well, Judd, Kushal, thank you so much for joining us. This has been a, a fascinating discussion. I think I come away with a, a lot of learnings here on about last Mile Logistics 

[00:30:42] Jeff Roster: Five, five years ago. I, there, there wasn't last mile. I mean, we talked about it a little bit, but maybe the last mile in the store, but never, I mean, the amount of innovation, of course this week in innovation, we love innovation.

[00:30:54] It. It's insane how much is happening in this, in this last mile. And it's, [00:31:00] it's, it's great. It's great to cover it and I wish you you guys the best of luck in, in being more efficient more sustainable, helping retailers sort of figure out this whole craziness. And I tell you, just reporting the, the numbers that you're seeing might be enough to, for, for us as consumers to say, wow, we need to really maybe start to think differently.

[00:31:15] So, so the best of luck to you.

[00:31:17] Judd Marcello: Yeah. Thanks.

[00:31:18] Kushal Nahata: Thank you so much. Thanks for having

[00:31:19] Judd Marcello: us. Thank you very much. 

[00:31:20] Ricardo Belmar: Thank you both.

[00:31:21] Jeff Roster: Bye.

[00:31:22] ​

[00:31:27] Show Close

[00:31:27] Casey Golden: Welcome back everyone. So did you catch that nugget about consumer preference for fulfilling a delivery promise versus speed of delivery? I know that's one of my main takeaways.

[00:31:40] Ricardo Belmar: Yeah, like I said, lots of amazing info from FarEye in this interview, and as Jeff said in the recording, it wasn't that many years ago that we barely talked about last mile logistics. And now look at all the great points Kushal and Judd made about lowering costs, being more sustainable. How to not only leverage your consumer preferences, but [00:32:00] doing it in a cost effective manner while, while still providing all the conveniences those consumers want.

[00:32:05] Casey Golden: And when you think about all the consumer preferences, Kushal and Judd mentioned from keeping a delivery promise to having the flexibility to change that delivery promise once the order's already in progress, to just show how varied these delivery promises and expectations can be. From product type to product type.

[00:32:26] When you think about it, we all know that getting a piece of furniture delivered is completely different than getting a new Prada bag.

[00:32:35] Ricardo Belmar: A hundred percent. I certainly came away knowing a lot more about the finer details of Last Mile Logistics, and I, I have to say, FarEye is really doing something unique with their platform that's worth paying attention to.

[00:32:47] Casey Golden: Absolutely. 

[00:32:49] Well, Ricardo, I think that's a wrap for part two of our N R F Live series. I can't wait to see what's coming up next in part three.

[00:32:57] Ricardo Belmar: Yeah. Jeff and I have even more [00:33:00] super interesting people to talk about coming up, including micro fulfillment and another one of your favorite topics, Casey Web three.

[00:33:07] Casey Golden: Well, now you're just teasing me. Let's wrap up this episode. 

[00:33:10] Show Outro

[00:33:10] ​

[00:33:15] Casey Golden: If you enjoyed our show, please consider giving us a five star rating and review on Apple Podcasts. Remember to smash that subscribe button in your favorite podcast player so you don't miss a minute. Wanna know more about what we talked about today. Take a look at the show notes for handy links and more deets.

[00:33:33] I'm your co-host, Casey Golden.

[00:33:35] Ricardo Belmar: If you'd like to connect with us, follow us on Twitter at Casey c Golden and Ricardo underscore Belmar, or find us on LinkedIn. Be sure to follow the show on Twitter at Retail Razor on LinkedIn, and on our YouTube channel for the latest updates and content. I'm your host, Ricardo Belmar.

[00:33:51] Casey Golden: Thanks for joining us.

[00:33:53] Ricardo Belmar: And remember, there has never been a better time to be in retail [00:34:00] if you cut through the clutter. Until next time, this is the retail Razor Show.