Retail goes on demand with Stuart
The question everyone asks David Saenz, UK General Manager of Stuart, is how the disruptive tech company came up with the name. “It’s a quirky story,” Saenz explains. “The two founders of the company were on a plane, talking about their idea, and the flight attendant who was serving them was called Stuart. He was engaging and personable, and they thought this represented well what the brand should be.”
Stuart is an on demand delivery platform that started out in France and Spain a year ago and has recently launched in the UK. Set up by entrepreneurs Clément Benoit and Benjamin Chemla, Stuart changes the way goods are delivered in cities, connecting retailers with couriers in a way that means customers have incredible control over when and where they receive their orders. In short, it is a B2B operation providing retailers the opportunity to go beyond the usual ‘three to five working days’ or ‘next day delivery’ options for their customers, who are able to choose an immediate delivery. Or at a precise time on a specific day.
With backgrounds in logistics, Benoit and Chemla used their knowledge and experience to come up with the idea for Stuart. Saenz explains: “They had set up a successful food delivery business and realised there was a market for urgent and precise deliveries outside of the food market. The economics of a business just doing food delivery are really difficult, because you have two huge peaks around lunch and dinner, so paying drivers fair wages in the hours when they’re not busy is challenging.” So by working with lots of clients across different verticals, Stuart has been able to avoid the peaks and troughs of food delivery businesses. Saenz adds: “By smoothing out the demand curve, this means you can have an attractive and really efficient business.”
Although Stuart wants to avoid the surges in demand of a food delivery business, it is working with food companies. It’s all about variety, after all, while remaining focused on being a B2B urban logistics expert. Stuart is working with giants such as Carrefour in France and Zalando and Burger King in the UK, and it has many small, independent retailers also on its books. A customer of Zalando will shop online as normal, and when they get to the checkout, they will get more options when it comes to delivery. Saenz says: “The retailer will integrate with Stuart’s API, so the customer can opt for immediate delivery or a much more precise time. The job is then assigned to a courier, who goes to retailer and picks up the package for delivery. This means that the retailer gets to outsource the tech and the logistics, but gets to keep the revenue and the customer relationship. This is really important because they maintain direct relationship with customers and customer data.”
Stuart’s technology team, based in Barcelona, is crucial to the company’s success. “Tech is a huge part of it – being able to have cutting edge algorithms behind what we do, to make the system as efficient as possible when it comes to how couriers are assigned jobs and so forth, is a key part of the proposition,” says Saenz. Traditionally, delivery companies would find efficiency – and therefore make money – through meticulous planning of delivery routes, plotting deliveries based on when it is best for the company, rather than when and where actually suits the customer. Stuart’s model, says Saenz, is the exact opposite of this. “We plan nothing and we map nothing. What that does is better match the on-demand world that commerce has morphed into over the last five years. Consumers have an expectation to get something right away, to be able to change the time and location of the delivery if they want to. You want that kind of flexibility in the delivery world.” So, how does Stuart find efficiency in this model? By using technology to forecast client demand and then make sure there is the right amount of supply on the platform.
With €22 million in investment, Stuart is rapidly building out its platform across Europe. After London, the next cities in its plans are Berlin, Brussels and Amsterdam.
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Driver shortages: Why the industry needs to be worried
While driver shortages are a global problem, with a recent survey from the International Road Transport Union suggesting that driver shortages are expected to increase by 25% year-on-year across its 23 member countries, the issue has very much made itself felt for UK businesses in recent weeks.
A perfect storm of factors, which many within the industry have been wary of, and warning about, for months, have led to a situation wherein businesses are suddenly facing significant difficulties around transporting goods to shelves on time, as well as inflated operating costs for doing so.
What’s more, the public may also see price rises as a result due to demand outmatching supply for certain product lines, which in turn brings with it the risk of customer dissatisfaction and a hit to brand and stakeholder reputation. Given that this price inflation has been speculated to hit in October, when the extended grace period on Brexit customs checks comes to an end, the worst may be yet to come.
"Steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole"
That said, we have already been hearing reports of service interruption due to lack of driver availability, meaning that volumes aren’t being transported, or delivered, to required schedules and lead times. A real-world example of this occurred on the weekend of 4-6 June with convenience retailer Nisa, with deliveries to Nisa outlets across the UK affected by driver shortages to its logistics provider DHL.
But where has this skills shortage stemmed from?
Supply is the primary issue. Specifically, the number of available EU drivers has decreased by up to 15,000 drivers due to Brexit alone, and this has been further exacerbated by drivers returning to their home country during the COVID-19 pandemic, as well as changes to foreign exchange rates making UK a less desirable place to live and work. This, alongside the recent need to manage IR35 tax changes, has also led to significant inflation in driver and transport costs.
COVID-19 complications have also meant that there have been no HGV driver tests over the past year, meaning the expected 6,000-7,000 new drivers over the past year have not appeared. With the return of the hospitality sector we understand that this is a significant challenge with, for instance, order delivery lead times being extended.
It is little surprise, therefore, that the Road Haulage Association (RHA) earlier this month became the latest in a long line of industry spokespeople to write to the government about the driver shortage for trucks. The letter echoed the view held by much of the industry, that the cause of this issue is both multi-faceted and, at least in some aspects, long-standing.
So, many in the industry are in agreement as to the driving factors behind this crisis. But what can be done?
Simply enough, outside of businesses completely reorganising their supply chain network, external support is needed. In the short-term, the government should consider providing the industry with financial aid, and this can also be supported more widely with legislative change.
Specifically, immigration policy could be updated to place drivers on the shortage occupations list, which would go some way towards easing the burden created by foreign drivers returning to their home countries. Looking elsewhere, government should also look for ways to increase the availability of HGV driver tests after the blockage created by the coronavirus lockdowns.
Looking more long-term, steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole. As it stands, multiple sources suggest that the average age of truck drivers in the UK is 48, with only one in every hundred drivers under the age of 25. We must therefore do more to increase the talent pipeline coming into the industry if we are to offset more significant skills shortages further down the line.
On the back of a turbulent year for the supply chain industry, it has become increasingly clear that the long-foretold shortage of drivers is now having a tangible and, in places, crippling effect on supply chains.
Drivers, and the wider supply chain industry, have rightly been recognised for the seismic role they played in keeping the nation moving and fed over the past year under unprecedented strain. If this level of service is to continue, we must now see Government answer calls to provide the support the sector needs, and work hand-in-hand with the industry to find a solution. If we do not see concrete action to this effect soon, we are likely to be in for a turbulent few months.
Rob Wright is executive director at SCALA, a leading provider of management services for the supply chain and logistics sector