Reroute Your Strategy for Last-mile Delivery

LATEST THINKING

Several disruptions are shaking up the last-mile delivery ecosystem across Europe. Consumers want more control and choice. Logistics providers must deliver volume with velocity. And technology is minimizing the barriers to market entry, making it easier for startups and other logistics players to grab their piece of the value chain.

In response, retailers, manufacturers, logistics providers and postal organizations must completely rethink their logistics operations strategies.

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KEY FINDINGS

FREE AND FAST IS NOT ENOUGH. Speed at low to no cost has become a requirement. When shopping online, just 36 percent of consumers are willing to wait for free delivery. Today’s consumers want practicality, for example, having greater control over delivery parameters and more choice of delivery options.

LOCATION REQUIRES COLLABORATION. Governing bodies across European countries and cities are forcing players to design logistics solutions built for local city operations. These constraints will push everyone into shared and standardized logistics solutions in which players may partner across the ecosystem to supplement capabilities.

TAKE PART, OR BE SHUT OUT. One or two platforms will emerge as the backbone that connects all players in the ecosystem—from consumers to retailers to logistics providers and manufacturers. These IT platforms will be used to capture orders, manage hubs, plan routes and schedule deliveries in order to maximize the use of shared resources.

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46% Nearly half of consumers expect next day delivery to be free.

RECOMMENDATIONS

Every player in last-mile delivery must adapt to the new industry landscape to remain competitive.

Logistics/postal companies should relocate logistic hubs to city centers, and reinvent them to be faster and greener.

Retailers can capitalize on their retail stores in cities by offering services that extend beyond shopping, e.g., stores designed to support parcel operations.

Manufacturers must be agile in their operations to differentiate in last-mile interactions, sharing pieces of the value chain with competitors who interact with customers through emerging platforms.