I personally believe that the First Mile is the Next Mile for “Commerce”, “mobility will only accelerate it. So what is the First Mile.
“The term last mile is used in telecommunications to mean the last place an infrastructure is set because of being difficult, expensive, not profitable, etc. to implement. It is usually associated with rural communities, where the concept of living in the last mile is even more graphic. Titus Moetsabi is said to be the father of the term First Mile as a matter to raise awareness on digital inclusion issues for rural communities.”
RetailGrid! Imagine connecting every mom & pop or BAM store into a grid that connects to a marketplace with a backend that is ordering and delivering what people want within a 1-2 mile radius and everything else managed on a server. The local store owner even knows every consumer by name, from their smartphone phonebook social network that is doing commerce. All this commerce has aggregated scale economics and value!
It is where most of us and our families and social networks work and live, within an average of 15 miles in most countries in NA and Europe and around 5 miles in emerging economies where infrastructure is challenge and being built out. So why is the First Mile so critical to the commerce and retail industry?
This is the real battleground. Creating and leveraging what commerce can do within the First Mile will disrupt the economics of every industry and retail is the first and most visible. The sample below of what I ordered in London delivered to a small retail store on Thayer Street near Bond Street which is the leverage of a micro BAM retailer.
This is the next challenge, adapting business models to meet this new approach to commerce and this is where the real economics, investing opportunity and disruption lie. This is also where a new startup can disconnect the entire ecosystem and create a new one. Shall we call this RetailGrid!
So this means the backend engine orders for example from 100,000 stores x 20 SKUs x $2 per SKU which equals $4m contract that is in a reverse auction bidding engine for all major OEMs to mid and win and the rest is delivered to the mobile user Phonebook consumer in the First Mile. Don’t these small mom & pop stores now have the same scale as a Wal Mart, eBay or Amazon or anyone else with one competitive advantage, there already exist in the First Mile!
For the first mile retailer this means;
1. Get big by being small, in an aggregated ecosystem
2. Aggregated ecosystem leads to
i. Lower Inventory Holding
ii. Increased Stock Turns
iii. Lower Cash Conversion Cycle
iv. Higher ROCE and EBITDA margins
3. All of this managed on the backend analytics marketplace
4. Compete as an ecosystem
Now is this what the entire ecosystem in retail and commerce is after. I know how to get this done. Is this the next disruption, RetailGrid!
- Why Amazon Will Become the Biggest Retailer Ever? (fool.com)
- Startups gun for Amazon with e-commerce disruption (bizjournals.com)
- Wal-Mart’s Q2: 16 technology, operations and e-commerce takeaways (zdnet.com)
- Despite the hype, e-commerce still only a small fragment of retail sales (smartplanet.com)