Evolving consumer delivery behaviour is positively impacting last mile logistics. Last mile delivery proficiency has become the key for a positive customer experience in today’s e-commerce world and the COVID pandemic has further accelerated its relevance across geographies and product categories.
During COVID , both mature and nascent product categories observed growth in on-demand delivery requests, with grocery being one of the key nascent categories with rapid increase in last mile support need. Observing the growing adoption, declining consumer reluctance to opt for at-home grocery delivery, and improving consistency in consumer buying patterns many last mile logistics players are now prioritising grocery delivery.
In the long-term online grocery delivery is expected maintain an upward growth trend with an estimated CAGR of 29% during 2020-2024. However, the growth trajectory of last mile grocery industry is likely to differ across geographies depending on the maturity level of last mile change enablers such as infrastructure, technology, regulations and scope of industry collaborations.
Factors driving profitability:
Additionally, in the current consumer landscape, ease of purchase and post-purchase experience, enhanced by advance digital solutions, is impacting the shopping journey significantly.
Many grocery retailers are thus prioritising investment in last mile delivery to improve delivery speed and flexibility.
With last mile becoming more crucial than ever to both customers and retailers – in relation to the grocery category – changes in storage and distributions strategies of retailers, buying preferences of customers, and investment priorities of new and existing service providers are witnessing an influx
Shifting tactics – evolving channel strategies and business models
Need convenience delivered – customer’s new mantra
Future of Last Mile increasingly a story of better software and connectivity
Three key factors impacting growth of last mile in grocery include:
According to the recent Deloitte Consumer Tracker results, delivery intentions for nascent categories like grocery are slightly higher in the Americas compared to Europe, but lower compared to Asia Pacific.
Many last-mile service providers, start-ups and large grocery retailers are now aggressively pursuing grocery delivery business. Some recent strategic initiatives by players include:
A large big-box retailer
A grocery-delivery and pickup service provider
A leading logistics-technology player