Is it really about the speed?

It's 3:00AM and you have been out all night with your friends, having a great time, and drinking WAY too much. As you are getting yourselves together to go face the world (at less than peak performance), your friend pulls his phone out of his pocket and hails the Uber.

As you all stand outside, huddled together against the cold, inevitably frustration mounts and someone says "where is this guy already?" The phone once again makes an appearance to set everyone at ease, "relax, he's just around the corner."

What we don't talk about anymore, was that exact same scenario played out years earlier, the only difference being that instead of the Uber, you were waiting for the cab after calling into dispatch.

How frustrating and sometimes infuriating was it to be standing there shivering, dwelling in your uncertainty?

The popularization of Uber is often linked to things like: ease of use, lower prices, mutual safety, a simple payment process, etc.

What if there was another reason that Uber appealed to us?
What if we didn't really even realize it?

I have spent the entire first phase of my career in logistics, with a huge part of that being responsible for executing last mile delivery. Having a professional comparison, the logistic networks being put in place by companies like Amazon and JD.com are incredible, the uninitiated probably don't really have a great grasp of what these companies have built to offer same day, next day or two day delivery on the products that are no longer out of reach.

Added to my professional experience, I have my personal paradigms that are crashing the party. I'm a millennial, a generation often defined by our sense of entitlement, or as I prefer, our impatience. We grew up with information at our fingertips, knowledge was no longer only for those select few and having access and freedom of choice is paramount.

With all of that rolled together, I still struggle to understand this drive towards all things delivered to home ... within an hour.

As I finished a book the other night on Customer Experience, I was exposed to something; an idea that I hadn't really considered before, as it related to last mile delivery.

Certainty.

What if this push for services like one hour delivery isn't really about getting a delivery in one hour?

What if these services are simply activating threat and reward responses that evolved to ensure our physical survival?

While we love to talk about how sophisticated we are, the reality is, it wasn't that long ago that our ancestors were in caves.

My proposition for you, a blend of my experience, some behavioral economics, and a touch of neuroscience is this:

It's not the speed of the service that consumers want, it's the certainty

From Professional Experience

I worked in the dairy industry, I am sure most of you out there have heard of the idea of a "milk run" when talking about logistics. Basically, a milk run is a delivery route that will make multiple drops during the course of the day in a predefined sequence. As milk was a very sensitive (and short code life) product, a milk run would go out day after day essentially making the same deliveries in the same sequence to the same customers (I promise I was more creative than this - but that's the history!).

Stores would schedule their activities by the deliveries, and would expect those deliveries to be the same each day. As a fast moving consumer good, the routine, structure and reliability was a benefit.

I have also experienced first hand the discomfort a customer experiences when you take the routine and make it dynamic. Taking a page from the cable companies, "we'll be there between 6am and 4pm."

You can avoid this trap however by working with very specific delivery windows and time banding across multiple deliveries. It's added complexity, and you really need to understand your business, but it's completely doable; the crux however is this, the more restrictions you impose on your delivery network, the more expensive it gets (and last mile is already the highest contributor to the Supply Chain).

The result to tight delivery windows and time banding ... happy customers.

From Behavioral Economics

For those that aren't familiar -

be·hav·ior·al ec·o·nom·ics

a method of economic analysis that applies psychological insights into human behavior to explain economic decision-making.

How behavioral economics works into the discussion is through Prospect Theory and our subsequent biases when weighing probabilities.

Basically, we don't do a great job of assessing situations of uncertainty and typically under weigh high probabilities. There is one exception to our lacklustre assessments however, that is 100% certainty. People tend to do great in these situations and will give extra "value" to things with absolute certainty.

From Neuroscience

We crave certainty.

Emerging science holds that there are five basic goals or needs (outside of the fundamentals for survival) that seem to be very important to the human brain. This framework (The SCARF Model) was developed by David Rock in 2008 and implies that these five needs activate the same threat and reward structures that we rely on to survive.

The model is:

1. Status – our relative importance to others.
2. Certainty – our ability to predict the future.
3. Autonomy – our sense of control over events.
4. Relatedness – how safe we feel with others.
5. Fairness – how fair we perceive the exchanges between people to be.

A feeling of uncertainty about a situation causes a threat response, your brain understands that there's something wrong and your ability to focus on other issues drops off. This is all to say that your brain doesn't like uncertainty and that we have a tendency to move towards things with higher or complete certainty when available.

Conclusion

Back to our original question, is the desire for fast, almost instantaneous delivery really about the speed?

The position I propose to you today is that no, it's not the speed that generates the desire for these services, rather the CERTAINTY of when the customer will receive what they ordered.

Amazon is so successful because they have already been feeding this machine for years. People today trust that Amazon will deliver on their shipping promise hence being able to provide customers with a greater degree of certainty than what the competition is offering.

While we won't see a great backtrack on shipping speeds (loss aversion is a whole other part to Prospect Theory), a massive differentiator in last mile service (and spoils of war) will go to companies that are able to deliver on a promise of certainty.

With more data available than ever before, the rise of AI and fundamental logistics planning, you will be able to provide this service to your customers.

Master Time, master the Activity of your network, and bring the Customer Experience to a new level.