The Last-Mile Delivery Challenge

Consumer products and retail firms in the food and grocery segment have to catch up with consumer demand for better and faster last-mile delivery services while at the same time mitigating associated profitability risks. Our research shows that close to three-fourths of consumers are willing to reward retailers who get the last-mile experience right with increased spend and loyalty while 40% consider delivery service a “must-have” feature for food and grocery products. But, last-mile delivery is the most expensive part of the supply chain. So how can retailers improve their last-mile delivery services without taking a profitability hit?

The new report by the Capgemini Research Institute, The last-mile delivery challenge: Giving retail and consumer product customers a superior delivery experience without impacting profitability highlights recommendations for how consumer products and retail firms in the food and grocery segment can hone in on the home stretch when it comes to last-mile delivery:

• Outsource delivery and focus on consumer needs – retailers with a lower store footprint need to begin by initially collaborating with grocery delivery services and focus more on genuine customer needs.
• Optimize fulfillment locations to lower delivery cost – retailers should equip stores for delivery, increase the use of dark stores for delivery, and encourage the use of last-mile storage and collection points.
• Automate delivery operations to boost profitability – automated warehouse operations, backroom automation for delivery and click-and-collect orders, and autonomous delivery vehicles provide some automation options.
• Encourage multiple avenues for fulfillment resources – retailers must collaborate with consumers for crowdsourced delivery platforms, encourage employees to deliver parcels for additional incentives, and use the gig economy for delivery during peak seasons.
• Enable consumer-centric fulfillment offerings – encourage customers to visit the store for returns, align their brand values with consumers’ expectations, and invest in customer-centric initiatives.

The race is on when it comes to last-mile delivery services.