Leveraging data and logistics can be the differentiator for businesses of all sizes. The pandemic-plagued past year has only accelerated the growth of e-commerce, creating some particular opportunities and hurdles for small businesses looking to find internal or external delivery solutions.
Last-mile delivery boomed in 2020 — years before most transportation analysts expected — as medium-duty vehicles saw large boosts in registrations across the U.S. “The last 12 months taught us some stuff about the acceleration of last-mile and e-commerce that we thought might be toward the end of the decade,” Colin Sutherland, Geotab’s EVP of sales and marketing, told FleetOwner during a video interview before the virtual Geotab Extend conference began March 23.
The “micro fleet” age might have dawned this past year but will only survive if small businesses can make it cost-effective. A new offering, Geotab for Small Business, aims to help these local, sole proprietors understand their operations, as well as the big fleets with thousands of vehicles.
As more large and small companies are seeking medium-duty vehicles, it has shown “how important vehicles are to the delivery of products and services — and not just in trucking,” Sutherland said. While intermediary consumer-delivery services, such as DoorDash and Shopify, have flourished during the pandemic, are they the best solution for small businesses looking to get products to customers quickly?
“I just kind of wonder how sticky the DoorDash model is going to be over the next three years,” Sutherland said. “ Once we get past this, are DoorDash and Shopify going to be the new bricks-and-mortar model? Must you also have a Shopify- and DoorDash-type of a delivery arm if you’re going to succeed?”
For businesses with a few vehicles — or a micro fleet — Geotab is looking to help them harness the power of telematics and data insights. Geotab for Small Business is designed to support companies operating only a few vehicles by providing Geotab’s telematics platform and other direct support services.
There are approximately 4.4 million commercial vehicles registered to about one million U.S. business owners. But most small businesses’ main telematics focus is on GPS location. The new Geotab for Small Businesses looks to introduce “mom and pop” to vehicle TOC and ROI, employee safety and enables more streamlined data sharing from vehicles to the office software for billing, customer support, and more.
Geotab’s customers range from some of the biggest fleets in the world with 100,000 units down to one vehicle run by an owner-operator — and everywhere in between,” Scott Sutarik, Geotab’s VP of commercial vehicle solutions, told FleetOwner. “This program just gives a little bit more focus on the smaller size businesses. We've definitely played throughout the entire ecosystem, but this program will just provide a little bit more focus on that smaller end of the market.”
Geotab for Small Business is available for a monthly subscription and offers users “the advanced tools the big guys have been using for years,” Sutherland said. “Geotab has the largest population of large fleet customers in the telematics industry, connected with our technology and delivering great data value to them. With Geotab Small Business, we’re delivering that data set, those reports, those rules, that skillset to the small business owner.”
“At the end of the day, it’s about economics,” Sutherland said. "If a large transportation company or DoorDash-type service can deliver goods for about $4 per shipment, it can be daunting. “If you’re a brick-and-mortar store and you want to get into home delivery, how do you do it at $4 (per delivery)? I mean, that’s really low cost.”
The economy of scale gives big companies a built-in advantage — unless the small businesses can figure out how to harness their own vehicles' power. Many small businesses have going for them is the power of being local and part of the community, Sutherland notes.
“At the end of the day, you shop local because you want selection. You want to build a relationship with a local person,” he said. “That’s the advantage of it.”
Sutherland believes that smaller businesses have another 12 to 18 months to figure out their own “DoorDash model” before it becomes the “new normal” after the pandemic ends. “Otherwise, I’m afraid — while restaurants will bounce back to some extent — I really worry about the small, little boutique store. That’s why we have to give them every opportunity to engage now and at least have an idea of what their running cost per package and cost per delivery is.”
Along with TOC and ROI, the new Geotab offering also helps small businesses enhance employee productivity by consolidating payroll administration for full-time, hourly or contract employees. It gives subscribers daily data on running costs per mile and offers new ways to reduce fuel costs. Geotab will also offer small fleets driver coaching focused on safety in residential areas to reduce potential risk and insurance claim costs.
