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Supply Chain & Operations

The new face of last-mile delivery

October 28, 2022 5-MINUTE READ

RESEARCH REPORT

In brief

  • Reimagining fulfilment and last-mile strategies have become a must in the new age of retail to survive and thrive in a competitive market.
  • Businesses are now faced with the challenge of reshaping last-mile strategies to put customers at the center of the entire order and fulfilment process.
  • Retailers’ view on delivery services is transforming from a cost-driving perception to a value-differentiating factor.

Customer-centric last mile

Customer behavior and expectations towards retailers, as well as the entire buying experience have significantly changed over the last few months—far more than in previous years.

A recent Accenture survey showed that more than 75% of consumers under the age of 30 expressed that same-day delivery is valuable for their customer journey. The Accenture COVID-19 Consumer Pulse Research also indicates that these new habits are here to stay even after the pandemic and change the way consumers shop, live, and work forever.

Combined with the growth of mobile shopping and the emergence of social commerce, the retail industry is undergoing a radical transformation from traditional commerce to a more fluid, seamless, and personalized journey.

Retailers are now transforming delivery services from a cost-driver to a customer value differentiator.

Radical transformation underway

Building on those changes, retailers are trying to find innovative answers while still taking advantage of their existing infrastructure. Moreover, retailers have started to restructure their supply chain to boost omnichannel capabilities, improve logistics processes, overcome barriers to grow and identify further areas of enhancement. 

Not too long ago, retailers put a large part of their investment and focus on innovation in the frontend, but only up to the point of order placement.

Moving forward, we expect a high last-mile delivery standard, including—but not limited to—faster deliveries and more flexible delivery options, to gradually become the industry norm and a must-have among retailers and delivery services alike. Businesses are now faced with the challenge of reshaping their last-mile strategy to put the customer at the center of the entire order and fulfilment process, thereby transforming delivery services from a cost-driver to a customer value-differentiator.

With eCommerce volumes growing by far stronger than the capacity of post and parcel services, we expect to see more retailers trying to either build their own transportation capacities or extend their collaboration models soon.

Six pillars for a customer-tailored delivery experience

  • Delivery Slot
  • Keeping up the Pace
  • Location, Location, Location
  • Order Transparency
  • Green Delivery
  • Seamless Journey
Focus areas on a sustainable last mile:
  • Sustainable and recyclable packaging
  • Eco-friendly deliveries
  • Working conditions of delivery employees
  • Agility toward regulations
Focus areas on a seamless customer journey:
  • Multiple delivery options
  • Dynamic & differentiated delivery offer
  • Return & additional value-adding services
  • Real-time delivery tracking

Expectations towards retailers

75%

Consumers under the age of 30 express that same-day delivery is valuable for their customer journey.

60%

Among those customers who prefer a greener delivery, at least 50% are willing to pay a premium price for a more environmentally friendly delivery option.

Sustainability is not a minimum requirement anymore—it has become a key differentiator in the last mile.

Get the job done

To successfully meet the “new” customer requirements, retailers need to build the right collaboration models with their last-mile partners and proper technological infrastructure. Differentiated collaboration and integration models are necessary for distinct types of carriers.

Large national or pan-European parcel providers need different onboarding procedures, contract durations, system interfaces, and service level agreements than quick commerce platforms that are connected to individual, small-scale last-mile drivers. As a result, retailers are looking for partners with whom they can build a more dynamic, agile, and adaptive last-mile operation, especially when things don’t work out as planned.

On the technological infrastructure side, retailers have not paid much attention to systems for last-mile services in the past, as they used to be outsourced and have been out of their control. As last-mile services and logistics partner portfolios change and become more diverse, system requirements and retailers’ involvement in last-mile technology need to evolve as well.

Focus areas to improve relationships with partners:
  • Collaboration with existing delivery providers who already provide established last mile offerings
  • Demand forecast sharing with those providers
Areas of key development and opportunities:
  • Advanced delivery management platform
  • Central control tower platform
  • Interdependent solutions that drive last-mile performance

 

About the Authors

Dr. Sven Kromer

Managing Director – Accenture Strategy, Retail

An expert in retail and consumer goods supply chain strategy, Sven leads the Germanic Supply Chain practice at Kurt Salmon.

Alexander Grunwald

Manager – Retail Strategy

Alexander is a Retail Strategy Manager. He works with global retail clients across sectors to define and support end-to-end strategic business transformations.

Housni El Nassabi

Senior Consultant

Housni is a Senior Consultant in Accenture’s Retail Strategy & Consulting practice with a focus on large-scale supply chain transformations.

Christian Böhler

Analyst – Management Consulting

Christian is an Analyst in Accenture’s Retail Strategy & Consulting practice with a focus on supply chain digitization projects. 

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