Last Mile: Last Frontier for Retail and E-commerce

Last mile is defined as the movement of goods from a transportation hub to the final delivery destination and has now become the last frontier for retail companies with home delivery services. Especially those offering products that have seen demand increase in recent weeks, such as food, basic necessities, medical or school supplies or entertainment products.

The spread of COVID-19 has forced many of the world’s leading retailers to adapt to new times quickly. Those companies that had bet on improving their product delivery strategies in the months prior to the COVID-19 have positioned themselves as the most efficient businesses. Restrictions caused by mandatory confinement decrees in many countries have forced retail stores to adapt by leaps and bounds. Those who did not value the importance of incorporating digitalization services before the pandemic and since then have been affected by the weak economy are now playing catch-up, while trying to achieve in a few days what it took others months of strategy and implementation.

Retail stores that have had the best results are generally retail giants, such as Carrefour or Amazon. In 2019, Amazon announced that it would make the Amazon Shipping service available to its customers in order to compete with other giants such as FedEx or UPS. However, the spectacular increase in demand has led the Seattle-based company to put this service on hold, as reported by The Wall Street Journal. Thus, all the company’s efforts have been focused on meeting the demands of its direct customers. However, investments made in Amazon Shipping, both in logistics and workforce, have allowed the company to reach households without too much difficulty. In fact, it continues to hire staff around the world, while taking advantage of Amazon Shipping’s technology to increase efficiency in the last mile, the most complicated, the most expensive and the most difficult to project.

According to KPMG, adaptation must be both technological and human. In terms of technology, supermarkets like Carrefour and Walmart, the absolute market giants on both sides of the Atlantic Ocean, have put in place artificial intelligence to try to guess which products will be in greatest demand depending on the state of confinement in each country and even in each region. The service allows efficiency to be improved by cost savings, offering a service that, according to Carrefour, is even more satisfactory for its customers. Other measures implemented around the world must also be added to this new model. According to Urbantz, in Belgium post offices allow workers to sign the delivery receipt in order to avoid human contact as much as possible. Something similar has been implemented by Deliveroo, which offers on its mobile application a contactless delivery service, so that both the delivery person and the customer do not have to see each other once the delivery is made, thus minimizing the possibility of contagion.

Another option implemented by companies and aimed at last mile cost savings is to use ArtificiaI Intelligence and machine learning to try to anticipate customer needs. According to Urbantz, this service has been implemented in France with relative success, as it saves time for customers and allows retailers to make their storage and delivery processes more efficient. In addition, it allows the order to be customized to taste, thus becoming a win-win for all parties involved in the process.

Last mile, or the last path a company takes to deliver its products on time, has become for retailers and e-commerce websites the last frontier to conquer. The big boys have already planted their flag in a territory that for many remains unexplored.