Central to our plans to extract further value from our portfolio is to use cutting-edge technology to leverage our nationwide footprint and deliver a distribution and fulfilment strategy that eases the pain and cost of last-mile delivery, reduces emissions, and makes life easier for our retailers and their customers. To do that, we’re thinking outside the box.
Distribution and Fulfilment
Vicinity's Distribution and Fulfilment strategy forms a critical part of its focus in growing revenue from adjacent business streams while improving the performance and experience of retailers and customers respectively.
The Distribution and Fulfilment strategy leverages Vicinity's assets to create opportunities and solve new problems. Assets include a database of over one million customers, in-house data-capability, ~7,000 retail stores network and broad portfolio of assets around Australia that can accommodate approximately 64% of Australia's population within a 30 minute drive.
Taking learnings from the logistics pain points felt during the COVID-19 pandemic, Vicinity in late 2021, launched its first distribution hub at DFO Homebush, Sydney.
Designed with the support of Vicinity's in-house Data Science & Strategic Insights teams, the Distribution Hub allows logistics carriers to drop parcels off at a delivery zone within the centre and let our team distribute in-centre.
The Distribution Hub product will reduce the emissions and inefficiencies of last-mile delivery while removing congestion from loading bays and in turn, improving safety. Crucially, for distribution efficiency, the Hub handles both inbound and outbound deliveries, where centre teams collect parcels from retailers and sort for logistics companies, avoiding unnecessary trips back to their sorting office and reducing delivery times for customers.
By mid-2022, the DFO Homebush distribution had facilitated over 100,000 parcel deliveries and trials have commenced across five additional centres.
Drones aiding last-mile delivery
In August 2021, Vicinity saw the first drone launch from a roof on Grand Plaza, Brisbane, bringing to life a new partnership with drone delivery operator, Wing.
The partnership is a significant step in easing some of the logistics pain of last-mile delivery by stationing a drone hub on the roof of the centre to allow retailers to deliver products to customers quickly, safely and with next to zero emissions.
Drone delivery allows retailers to grow their customer base – the drones fly up to 10km from the centre – and in turn, allows them to fully utilise their retail space more effectively.
In the first few months of operation at Grand Plaza, there were over 3,000 drone deliveries that enabled retailers to grow their customer base and increase sales.
The future scope for drone delivery may see the operation take advantage of the strategic locations of Vicinity's portfolio, expanding to additional centres and introducing new retailers to the technology.
By mid-2022, the site capacity was increased to 48 drones (from 16 drones initially) on the back of strong demand from both customers and retailers for the service.