As customers increasingly demand faster delivery, retailers, restaurants, and couriers need to work to maximize the efficiency of last-mile delivery and to provide convenient options in order to stay relevant. This article outlines some of the trends shaping the delivery industry both today and into the future.
eCommerce and the World of Deliveries
The eCommerce industry is expanding, with delivery options replacing traditional retail shopping. The current state of the delivery world is one of continual improvement, with next-day delivery options overtaking traditional two- or three-day delivery windows in 2018. Click and collect options have also grown in popularity, making up about a third of online orders. Meanwhile, it has also become possible for some large retailers to deliver orders within two hours of purchase.
However, there is still room for improvement, as 2018 saw a higher rate of failed deliveries. Another negative trend is the rise of serial returns, due to a culture of returning clothes after using them once. These issues result in expensive losses for retailers and eCommerce companies.
6 Current and Future Trends
- Real-Time Tracking
Shipping companies are turning to smart technology for tracking purposes, to help improve their last-mile delivery logistics. This smart technology uses the Internet of Things (IoT), GPS, and electronic logging devices (ELD) to track shipments in real time. Smartphone apps make tracking more accessible to consumers. For example, SMS or email alerts can notify shippers and customers of each phase of a shipment, so they can know when to expect the arrival of a package, or if it gets lost.
Consumers and shippers can both receive SMS alerts, email notifications and even Google notifications for every movement a shipment makes. Combined with the upcoming mandate, the use of smart tech to track last mile logistics will grow. Being able to track a package is extremely important to a customer. It is important for them to be able to know when a package is supposed to arrive or even if it gets lost.
As parcel delivery becomes more popular, last-mile tracking will likely continue to grow.
- Third-Party Delivery
A growing number of retailers are taking advantage of third-party delivery options like pick up and pack companies, which handle the delivery logistics for them. These courier services are particularly suited for smaller eCommerce companies, enabling them to offer personalized delivery to the customer on the same day.
According to Technomic, the third-party delivery industry was worth $7.1 billion by the third quarter of 2018, and this will likely continue to grow. Independent shops and restaurants will have to embrace these services to stay relevant, and they risk becoming invisible to consumers if they do not offer delivery options, or if they do not appear on delivery apps.
- Delivery Drones and Robots
Autonomous vehicles and their ilk, including trucks, drones, and delivery robots, are becoming more important. These technologies can improve last mile logistics, allowing the delivery industry to continue to grow and become more personalized even in the face of labor shortage issues. Autonomous delivery vehicles can help maintain high reliability and provide same-day delivery in urban or even rural areas.
Currently, the main obstacle to the growth of this industry is the existing regulation affecting the trucking industry. However, in a few years, regulations may change to enable the wide-scale use of driverless delivery services. Autonomous vehicles and delivery robots are still being developed and tested, but eventually, they will significantly cut the cost of delivery by eliminating the need for labor, which accounts for around 60 percent of overall costs. Furthermore, driverless technologies can work around the clock and allow for faster delivery.
Recent trials include the Amazon Prime Air drone service in the UK and Alibaba’s G Plus delivery robots, which can carry packages weighing up to 20 pounds and uses sensors such as radar, stereo vision, and ultrasonic to help navigate real-world conditions.
- Locker Pick Up
In some cases, the more efficient option, compared to delivering packages directly to the customer, is to provide secure, self-service lockers from which customers can pick up their orders. Some couriers offer customers a choice, with locker pick-up presenting the most secure option, mitigating against lost or stolen packages. The customer receives a password via SMS or email, which opens the locker. It is also more cost-effective for the delivery companies, which can deliver multiple packages at once to a single location. An example of this system in practice is Amazon Locker, which offers more than 2,000 locations in over 50 cities.
- Mobile Merchants
While most shoppers (around 65 percent) use the internet to research products before they buy them, the most effective way to sell a product is to place the product and the information right in front of the consumer. As delivery becomes the norm, replacing stationary, physical stores, drivers may begin replacing traditional retailers, selling products directly from trucks. As driverless trucks replace the traditional role of the driver, truckers will have to adapt, becoming merchants and handling the logistics of sale and delivery, rather than the actual driving.
However, there are a number of challenges involved with the mobile merchant system, including regulations, payment and accounting processes, the burden of risk for unsold merchandise, and the practical logistics of handling returns.
- Same-Day Delivery
Same-day delivery is becoming standard practice for many retailers. Consumers are willing to pay extra for faster delivery, especially same-day delivery. However, for same-day delivery services to be attractive, the cost must be reasonable, at around 7 or 8 percent of basket value. Same-day delivery is not only relevant to individual online consumers. For example, the Coca Cola express delivery service allows restaurants to receive deliveries within three hours of placing an order.
A Look to the Future
The future of last-mile delivery is one of great opportunity for retailers and customers alike. Postal operators are likely to grow in 2019 as they take advantage of international markets and increased demand for package delivery. As new technologies develop and the retail, restaurant, shipping, and eCommerce industries adopt these delivery trends, we are likely to see more fast, autonomous, and cost-effective service.