The global last mile delivery market is forecasted to reach USD 62.7 billion by 2027, as per a report from AllTheResearch. The COVID-19 pandemic resulted in a rapid shift in consumer online buying behavior. Several companies increased their reliance on third-party service providers and leveraged delivery management solutions to provide fast and efficient delivery services. As we step into the new year, let’s look at the top trends that will take center stage in 2022.
Top trends that will shape the last mile delivery for 2022
Here are 9 delivery trends you need to keep an eye out for in 2022.
1) Quick commerce
The increasing consumer demand for ‘fastest deliveries’ has resulted in e-commerce giants focusing more on logistics services. The quick commerce (Q commerce) segment in India is expected to grow 10-15 fold in the next five years to become a $5-billion opportunity by 2025, as per a report from Redseer. In case of Q commerce, the delivery time is typically between 10 to 90 minutes of order placed for essential items. In 2022, ecommerce companies will achieve faster delivery SLAs with a network of highly optimized micro fulfillment centers that are built from area to area.
2) Sustainable delivery
There has been a gradual increase in customers becoming more conscious and aware of their ordering habits. Some items do not need to be delivered at the earliest, and some customers get them delivered when they actually need them. Typically, the fastest options usually aren’t the most sustainable ones. Several organizations are taking adequate measures to reduce the carbon footprint of a delivery. Some are even using reusable packaging to support sustainability.
Read more – 8 fleet management trends for 2022
3) Contactless delivery
There has been a major surge in contactless delivery since the pandemic. Close to 40% of U.S. consumers prefer contactless delivery due to safety concerns, according to a Salesforce survey. Delivery executives are exploring different ways to maintain safety and continue to offer a good customer experience.
4) Drones and delivery bots
Several retailers are looking to experiment with robotic deliveries via various options like drones, robots, self-driving vehicles, and autonomous delivery bots. Retail giant Amazon recently invested over USD 500 million in autonomous technology developer Aurora. In 2019, Alphabet tested Wing delivery drones to deliver parts to ships away from the shore.
5) Increase in urban warehouses
As customers start demanding same-day deliveries, e-commerce companies will need to start building warehouses and hubs closer to the city. It has become essential to take advantage of the urban warehouse space to get instant access to products for fast customer deliveries. This not only reduces transit time but also makes access to delivery agents and laborers easier.
With fewer people visiting physical stores, more retailers are using them as micro-fulfillment centers and delivering orders from the store. According to a WSJ report, Amazon is said to be in discussion with mall owners like Sears and J.C. Penney to turn them into fulfillment centers.
6) Insourcing last mile deliveries
Several companies are using their own vehicles for last mile delivery instead of outsourcing them. Some of them are also developing their own local delivery services by using their own fleet of vehicles or a hybrid fleet to fulfill deliveries. Owing to the sudden spike in last mile deliveries, e-commerce firms have also started to use their trucks for local deliveries. However, there are several companies that need to rely on outsourced delivery services.
7) Smart tracking with location intelligence
Retailers and logistic companies are embracing technologies like location intelligence (LI) to improve their last mile delivery. Features like real-time tracking, route optimization, and visibility, among others, are helping them with seamless deliveries and fleet management. The right LI platform helps companies keep their customers informed about the exact location of an item in transit by offering more visibility. Retailers can also leverage LI to monitor weather patterns and look for optimum delivery routes.
8) Faster fulfillment
9) Drivers also become salespersons
This medium of delivery is still in a nascent stage and can be more applicable to food-related orders. However, there are several challenges that retailers can face while dealing with orders done directly from the mobile warehouse. Some of the common challenges are – how will drivers process payments and take care of accounting? What is the procedure if consumers want to return a purchased item from drivers?