The True Winners of the Democratization of the Last Mile Are Your Customers
External consumer-facing challenges and internal (sometimes immediate) strategic pivots have made the retail vertical very exciting to watch in the past 18 months. On one side, consumers have a major upper hand when it comes to purchasing decisions as there are many retailers that offer the same products, have similar pricing, and offer a variety of options to receive their orders. From two-hour delivery, four-hour delivery, next-day delivery, BOPIS, curbside pickup, etc., there are seemingly endless opportunities for consumers to choose one retailer over another for their everyday purchases.
On the other hand, retailers have additional issues to face as they were forced to accelerate digitization plans as a result of COVID-19. Projects that may have been on the road map for completion in 2025 were slated for completion ASAP, forcing many retailers to scramble and complete their tech stacks in order to just stay afloat, let alone scale. However, the brands that were already on that road with complete e-commerce solutions and scalable fulfillment and delivery options were the ones that came out on top. But those solutions contribute nothing if the last mile delivery network isn't in place.
Looking at the combined challenge of how retailers can improve their internal capabilities to meet and exceed customer expectations, there's a true path to success in the democratization of the last mile. For example, the moves that Walmart, DoorDash, Uber, Instacart and others are making have made delivery networks essential to help brands tap into larger marketplaces with established technology and logistics operations. These options open up the possibilities for smaller retailers that don't have the means to establish and operate their own fleets.
Working with larger players to execute the last mile isn't without its own challenges, however. While the smaller retailer is able to tap into a larger expansive network, there are other elements to consider, like speed, cost and volume. For example, can this logistics partner effectively manage the amount of scheduled deliveries and those that the retailer expects in the future? The driver shortage across the world has dramatically slowed the movement of goods, ultimately impacting the quality of service for the consumer. If the retailer promises a consumer a specific delivery window, and the logistics partner doesn't complete the delivery in the expected timeframe because of a driver shortage or other circumstance, the retailer suffers. The consumer doesn't consider that a different company made the delivery, and will more than likely purchase from a different retailer next time because of the poor delivery experience.
While a smaller retailer might win in the short run, it's important for the retailer to consider its long-term strategy. A logistics partner might make sense now, but the company may have the ability to scale and compete on a larger level if it takes its logistics capabilities in-house. By digitizing operations and connecting each step of the delivery fulfillment process, retailers can control the entire last mile and not have to rely on an outside vendor for success.
The democratization of the last mile is a win-win for the retailer and logistics partner, and it's a beneficial option for the retail industry. Providing an option for SMBs to compete is a big step, and one that helps meet the growing demand of consumers who will continue to be reliant on online shopping for years to come.
Guy Bloch is the CEO of Bringg, a platform that helps companies scale up and optimize their customer experiences and logistics operations.