Sustainability of on-demand delivery start-ups beyond Covid-19

Priscilla Muhiu, General Manager at Glovo Kenya.

The Covid-19 pandemic has transformed the way we shop and do other business. As part of the protocols put in place by the government to stem the tide of the pandemic, nonessential businesses have closed, and customers are generally avoiding public places. Limiting shopping for all but necessary essentials is becoming a new normal. Brands are having to adapt and be flexible to meet changing needs.

Whereas the various containment measures put in place by the government will eventually be lifted, there is no denying that millions of consumers are creating and reinforcing new online buying behaviors and habits. Consumers are more motivated than ever to shop online and have deliveries made at their doorsteps.  

As the online retail space continues to expand, consumers are choosing click and mortar retail over traditional brick and mortar stores. Online retail presents a unique opportunity to have a positive impact on the environment and mitigate the effects of climate change. An online consumer’s behaviour is more efficient and sustainable than a traditional consumer. This shift in consumer behaviour, coupled with the advent of Covid-19, has seen the growth of on-demand delivery start-ups, currently causing a major technology disruption in the Kenyan market.

Safety of customers during the Covid-19 pandemic period is paramount. Consequently, on-demand delivery start-ups need to institute a number of changes including contactless deliveries, in which case human interaction is avoided as products are picked up from the stores or restaurants and delivered by riders fully clad in personal protective equipment (PPE).  Deliveries are then dropped off at a consumer’s door in a seamless and cashless transaction.

The current consumer trends are unlikely to change even post-Covid-19 and in response to this, companies all over the world are investing heavily in developing their logistics and last-mile delivery operations, as the demand to serve customers fast, efficiently and effectively increases in importance.

Since the demand for both on-demand deliveries and environmental awareness from brands is here to stay, the onus is on businesses to tackle these corresponding revolutions in consumer behaviour. A 2017 study published by Forbes found that 87 per cent of consumers will have a more positive image of a company that supports social or environmental issues, 88 per cent will be more loyal to a company that supports social or environmental issues and 92 per cent will be more likely to trust a company that supports social or environmental issues.

Therefore, by adopting a business strategy that ensures their company is eco-friendly and sustainable, brands stand to gain more consumer trust, which results in higher revenues. Such a strategy will also be in tandem with the Paris Agreement, which contemplates a need for business and consumers, as well as government and citizens, to step up to the plate and contribute solutions. In the last few decades — in a trend that culminated in the Paris agreement — experts have been increasingly unanimous that government alone cannot solve the problem of climate change.

Locally, such a strategy is in keeping with the National Climate Change Action Plan (NCCAP) 2018-2022, which aims at making Kenya climate resilient and prosperous. Kenya’s priority climate actions are in the six mitigation sectors set out in the United Nations Framework Convention on Climate Change (UNFCCC); agriculture, energy, forestry, industry, transport and waste. The actions are expected to lower greenhouse gas (GHG) emissions, and help Kenya meet its Nationally Determined Contribution goal of abating the emissions by 30 per cent by 2030.

Further, Deloitte Global’s third-annual Readiness Report, The Fourth Industrial Revolution: At the Intersection of Readiness and Responsibility shows that not only is the environment on executives’ minds, but also that climate change and environmental sustainability have become integral to how they’re managing their businesses.

Ultimately, the onus will be on companies to figure out how to satisfy consumer delivery needs while reducing their carbon footprint and maintaining — or in some cases, even improving — their last-mile delivery operations. Unless we change the rules of the game, consumerism will continue to have a negative effect on the environment. We need to focus our efforts on models that have sustainability at their very core. One such model, the circular economy, which focuses on eliminating waste and the continued reuse of resources, can reduce the rise of negative environmental impacts by making the most of natural resources.

Secondly, with high customer expectation creating a demand for better courier services, on-demand start-ups need a reliable courier partner in ensuring that customers benefit from the best delivery service including same day delivery.

 The writer is the General Manager at Glovo Kenya.