The unmanned collection point is the key to fulfilment says Alastair Charatan The fulfilment bottleneck hampering strong growth in grocery home shopping represents an important opportunity for the fleet of foot. And unmanned collection points will prove the best option for covering the last mile to the consumer. There are numerous solutions for solving the last mile problem and most of them have at least one major drawback. Secure boxes outside individual homes, for instance, are convenient (assuming they do not take up excessive space, and are sufficiently attractive). But the capital cost of installing a fully functional unit, which can accept multiple deliveries securely, is prohibitive. The combined value to the customer, retailer and delivery companies is not enough to justify the costs. Collection points are not a perfect solution, but the unmanned option scores well on most criteria. They do not remove the entire shopping burden for the customer, but they turn a two hour trip to the supermarket into a five minute diversion on the way home from work. They also allow customers to collect orders at a chosen time and location, such as train stations, garage forecourts or leisure centre. These points require no staff, are available 24 hours, and smaller points can be just as cost effective ­ such as the local video store. Equally, collection points could be located outside supermarkets, as a convenient way of collecting home grocery orders, and as an additional service to customers for picking up other deliveries. It is commercially viable to bundle together the software, communications and physical containers required to allow for temperature control at collection points. So, the unmanned collection point offers the best commercial case. The capital investment serves many consumers. The operating costs are low. The benefits to delivery companies are among the highest of all the options. Collection points can easily save £1 compared with delivering direct to home, which will cover the fee charged by the collection point provider. Cost savings are also achieved because the delivery can typically be achieved more quickly at a collection point than at a home ­ the collection point is easily found, the driver does not have to wait for the customer to answer the door, the vehicle can be parked right beside the collection area and procedures for physically handing over the goods are streamlined. Collection points will inevitably experience some failures of customers to collect, but the costs will be less than the high costs of failed home deliveries. Another potential area of cost saving is in customers reporting non delivery. The collection point processes designed by PA offer cost effective audit trails of all parts of the delivery process. It will be very difficult for customers to receive goods and fraudulently claim they did not. Many of the lost in transit' cases are because the delivery company delivers to a neighbour, who keeps the goods, either deliberately, or because they fail to tell the neighbour they have them. The benefit to retailers is also high. The high demand for evening deliveries of grocery orders puts pressure on supermarkets. If collection points are used, the higher the peak demand, the better for the retailer. A single drop in the afternoon at the collection point will fulfil many orders simultaneously. This both reduces delivery costs, and removes the fulfilment bottleneck that has hit even the most successful online grocery retailers. Earlier this year Tesco Direct was only able to offer delivery slots eight days after the date of order. There are significant opportunities for delivery specialists and new entrants in this area. Understandably, retailers do not view this as a priority for their own investment, and recognise that the winning solution must be available to any retailer or delivery company. It will clearly be unacceptable for individuals to have to go to different points to collect different deliveries on the same day, or to have more than one secure box outside their home. For start up companies creating the infrastructure for the last mile, finding the right sites will be critical to gaining consumer acceptance as will building momentum quickly, as there will be many participating customers, sites, retailers and delivery companies in a short time frame. The challenges are significant. There are many solutions being proposed and launched, at varying degrees of readiness. The profitability is quite finely balanced, and the value of the resulting brand is not straightforward, either financially or qualitatively. But there is a sound business case for the right solution, and so a strong opportunity for the organisation that can put all the pieces in place. During the development, pilot and roll-out of collection points, manned points may be an effective interim solution, reducing capital costs at the expense of higher operating costs. Supermarkets themselves could take the high ground regarding collection points. The focus for site providers for picking up deliveries has been on petrol forecourts and convenience stores. But there are supermarkets in or on the edge of all but the smallest towns, and they have the benefits of large car parks and 24 hour accessibility for vehicles, even if the store itself is shut. Alastair Charatan is a retail specialist in the operations consulting practice at PA Consulting {{MANAGEMENT FEATURE }}