Last mile delivery: It’s been quite an interesting road to travel these past couple of years, indeed!
Amazon did an end-run around UPS and Fedex by ramping up its own-fleet delivery to 72% of its total shipments. Uber and Lyft drove into the last mile, bringing everything from restaurant orders to auto parts right to their existing riders’ doorsteps. And the Covid-19 pandemic famously heralded in an explosion of last mile grocery delivery via Instacart, Shipt, Peapod and others.
In 2021, however, last mile disruption was itself severely disrupted. Gopuff barnstormed its way to a $40 billion valuation with a curated assortment and ultra-fast delivery model that rendered Walmart’s two-hour express delivery “so last year” and made Amazon’s same-day delivery service seem positively ancient.
Some leading last mile players, meanwhile, encroached on first-party offering territory. Instacart’s setup of micro fulfillment centers (MFCs) drove speculation that it would soon begin selling products directly to consumers, while DoorDash has already begun doing just that, growing its ranks of new DashMarts nationwide.
However you view it, the disruption of last mile has become the flywheel, driving a larger transformation of retail. For traditional brick-and-mortar stores, who were already under pressure to adapt to changing consumer expectations and increased competition, this disruption represents both threats and opportunities.
Here are a few ways those retailers can join the party and maintain their seat at the table:
1. Become More Digitally Savvy: On the very first rung of this, retailers that haven’t already established proprietary e-commerce operations must do so now. Grocers, convenience stores, liquor stores and pharmacies that may have managed to satisfy online demand using third-party proxies like Instacart are now at a real fork in the road. One path offers a chance of digital self-reliance and an expanding universe of options. The other path, in my opinion, is a direct road to obsolescence.
2. Invest In Fulfillment Efficiency: As e-commerce continues to grow, so too will customer’s shopping missions—and their fulfillment expectations. To meet those expectations without damaging already-thin margins, retailers must learn to execute at a whole new level of efficiency and accuracy.
Each fulfillment proposition, whether it is curbside pickup, next-day/nominated-day delivery or “there in 20 minutes,” comes with its own set of complexities. Retailers’ ability to leverage their existing store associates and brick-and-mortar locations economically—and their ability to pick, pack and prioritize multiple orders accurately and simultaneously—will likely be critical to their survival.
3. Diversify Last Mile Providers: While it seems like just a minute ago that last mile providers were a brand new idea, the landscape is now littered with providers competing for market share. We should see commoditization and consolidation of the field in 2022. That means retailers have leverage on the competitors vying for a piece of their delivery business. Why partner with just one or two last mile providers (who may or may not fare well in the next heat of competition) when retailers can utilize a multiplicity of fulfillment providers, alongside their own internal resources?
4. Offer Rapid Delivery: The ultra-fast delivery model pioneered by Gopuff is here to stay. Store-based retailers should consider developing their own rapid fulfillment models using a curated assortment of items that are needed in a hurry. If grocers, beauty product suppliers, pet stores, DIY stores and other local retailers can work out how to provide their own customers with what they need in a hurry, they won’t have to stand idly by while the quick-commerce outfits eat their lunch (or at least deliver their late-night popcorn and pizza).
5. Play To Your Strengths: While improving their own fulfillment capabilities is important, there’s still more to retail than last mile. Incumbent players enjoy the benefit of customer proximity, familiarity and loyalty. They should lean into the areas where competitors can’t touch them. That might mean product assortment or quality (especially with fresh food in grocery). It could be about the convenience of a retailer’s online personalization or the value offered through a loyalty program. Or it might be “service with a smile” and a great return policy.
The rapid evolution of last-mile delivery represents both a threat and an opportunity to local, store-based retailers. Retailers need to take command of their digital destinies, master fulfillment, adapt quickly to new delivery propositions and leverage the strengths they own as incumbents. This will put them in the best position to stave off new threats, compete with the big guys and maybe even poach some customers away from their less-prepared rivals.
Source: Last Mile Is Being Disrupted Again: Here’s How Retailers Can Hold Their Ground
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Critics:
Know your travel goals
This is an important consideration when evaluating what you would like to get out of your points and miles hobby. Do you want to travel several times a year to an exotic location, flying in first class on miles and paying for your hotel on points? Do you want to fly to visit friends and family using miles (but don’t care if you sit in economy or business class)? Or do you just want to learn what travel rewards are all about?
The good news is that regardless of your travel goals, understanding the basics of these currencies can make those goals a reality. Using points and miles to see the world can save a lot of cash. And when you get into this hobby, you begin to realize that all sorts of travel is affordable and within reach.
Setting clear travel goals can also help focus your attention and investigation. If you want to visit Japan, you can focus on relevant airlines and hotel programs while ignoring the rest (for now). This can help avoid overwhelm and the paradox of choice.
Think of points and miles (travel rewards) as another type of currency. Just like stocks, crypto, bonds or foreign currencies, travel rewards present a way to pay for your travel experiences and invest in your travel goals without using cash.
Each travel reward currency has its own value, just like a country’s currency. Many points and miles are worth roughly a cent apiece, but values vary … It’s important to do the math whenever you’re considering a particular offer or promotion to figure out the approximate cash value. 100,000 points might sound like a lot, but it depends on what kind of points they are…..more
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