At Home Delivery World - USA 2020, Milkman hosted a session titled: Maximum convenience or minimum cost? How to find the best balance for your brand. The speakers were: Antonio Perini, CEO, Milkman and Francesco Montuolo, CEO, MLK Deliveries. The latter is the joint venture between Poste Italiane and Milkman, created to deploy Milkman's technology through Poste's capillary network in all of Italy.
Following are some highlights, see the video to discover everything that has been said!
[Antonio Perini]: (...) When raising Milkman as a service provider, we got to learn a lot about what it takes to be a great home delivery service. We have now passed over this business to Poste Italiane and are now focusing solely on technology, after having accrued so many millions of deliveries and experience on our shoulder, that helped build a better technology in support of the home delivery effort.
[Francesco Montuolo]: (...) We want to transform the delivery of packages in a real experience. This means giving the power to the customer. We started with the 12 most important cities in the country, offering scheduled and same day deliveries and we will add more cities before the end of the year. We started with e-commerce businesses and grocery. That is another line of business in which we are investing very much.
[Antonio Perini]: (...) We realized that carriers were kind of dictating their constraints and the user was just going through any decision for an efficient supply chain, so the carrier would show up whenever it was more convenient for the driver. But that was not helping the retailer selling more and selling better. Initially we thought it was just a matter of adopting existing technology, to be honest. We started pulling technology together and going to market with this fleet as enabled by a legacy routing optimization. But then I realized why it was so difficult to adopt route optimization. And the reason is that there are humans out there. There are drivers, there's the workers, there are recipients that are challenging and are kind of volatile in their needs and change their mind and so forth. A fixed static route was not good enough. Moreover, you have to negotiate somehow and manage the expectations of each single recipient, one at a time. You cannot just wait to have all their desires and constraints and then launch the routing over.
(...) We managed to build a significantly larger system that offers appointments in a smart way. And it's smart in that it offers something that's convenient for the recipient and at the same time, kind of magic, it also builds something that's efficient for the supply chain.
(...) In short, after a few million deliveries, we realized that what it took to build a technology for home delivery was a simple routing optimization engine behind the scenes, but a live environment, something that adapts itself to the behavior of a single city.
(...) The magic between balancing convenience and price is really unveiling opportunities that recipients like. And they are the ones that make us very profitable in terms of offering carrier services behind the scenes. That's why I keep saying there is a win-win in offering a superior consumer experience. Once we used to have either a premium service or an efficient service. Now you can have both just because technology lets everybody know what their opportunities are.
[Francesco Montuolo]: (...) Yeah, it's something that has changed the way retailers and carriers work. We are offering retailers a tool that they can integrate in their e-shop so they can offer these kinds of options directly to their customers. And the technology also allows us to modulate these offerings.
[Antonio Perini]: (...) First of all, because people are not going to take off from their work to stay home and wait for your delivery. If you have to enter their house, for example, that's becomes even more apparent. And I think that in those circumstances, you do not only have to offer flexibility or reactivity or the same day that we enable: you want to keep an eye on feasibility.
(...) Milkman’s system just takes into consideration any deploy capacity that has been set for a given day in a given city and it goes back to looking at the demand that it is generating and the set of expectations from the market, to figure out how to keep extending the range of options for any customer out there, while ensuring that each of the options offered is feasible and the costs of service control.
(...) What we are doing here is to intertwine the sales process with the operations process. That's the real secret, to unveil new opportunities for better efficiency. (...) What you need is really a technology that learns. The territorial knowledge that historically was the real asset in the arbitrary process of drivers figuring out where to go has to be transformed into a digital asset for your company to keep improving the level of service.