Interesting article! One other additional cost and complexity could be the cost of the instability in the supply chain/demand as regulators get their bearings in a post-Brexit world. I would imagine that McLaren does not like to hold inventory given its high price point and warehousing costs, and this could pose a problem as shipments get held at customs whereas they could easily get to Europe/other countries before Brexit. This is especially challenging given how many of the cars are sold outside of the UK.
Great essay! In response to your question about whether fast fashion is just for lower price segments, I believe it is not and that the digitization trend of supply chain is permeating all price points. Take for example, Moda Operandi, a website founded in 2014 which allows women to pre-order high end clothing and accessories (average price point of an order ~$2k) off of the runway so that they do not have to wait for department and specialty stores to purchase a collection before they receive their clothing. The company now has net revenues of almost $100mm. According to an article in Forbes, women receive their items a full 4-6 weeks before they would if they ordered the same items through a third party (department, specialty store). The Moda Operandi approach also helps the designers to digitize their supply chains by allowing them to collect data on demand long before they would receive information from their standard department store distribution channels. This, in turn, allows them to be more agile in planning the production of their lines and in turn helps them financially by producing more of the items that sell well and less of the items that do not.
Interesting topic and great write-up. I agree that last mile delivery is becoming increasingly important for retailers globally as consumers become accustomed to the immediate satisfaction of receiving their orders. I also agree with Phillip’s suggestion on automation, but only in certain very developed markets. I envision automated delivery working only in big cities in the United States and Europe where robots are not so far out of cultural norm. I recently read an article in Forbes that 60% of the cost of delivery is labor, which is especially expensive in the markets listed above. However, I am cautious about introducing automated, robotic delivery in a developing market like Mexico. Juanjo, I like your idea of self-pick up for Mexico as it addresses not only the complexity of delivering, but it also addresses the current cultural reaction and thought on online ordering. In my experience with family and friends in Mexico, the distrust of online ordering is just beginning to fade for the majority of the population. Instead of automating delivery via robots, I propose that Amazon actually double-down on traditional delivery and focus on the customer service aspect of delivery. I would not want Amazon to get caught in a race to the bottom to delivery goods for free at the drop of a pin. I recommend they use delivery people with branded Amazon trucks and mopeds (for smaller orders). The dual delivery system of truck and moped would allow smaller, perishable orders to reach customers quickly (and avoid CDMX traffic!). Amazon should load their delivery trucks and mopeds with additional products as an opportunity to up and cross-sell a customer when receiving their order to mimic the online checkout process. I think this could be an interesting revenue-stream that could counteract the cost of delivery, and an opportunity to build brand loyalty.