As 2022 draws to a close, we’re sharing our last-mile delivery predictions for last-mile evolution in 2023. We’ve explored areas we see are ripe for imminent change: from evolving to compete on service excellence, not just price, to collaborative fleets, and from chain-wide sustainability to balancing urban/rural demand. As for the major impetus behind these changes? Market pressures, bringing with them opportunities for innovation.
Economic instability and shifts in consumer behaviour are pushing the delivery sector to adapt. Retailers and fleets alike will need to embrace these shifting dynamics as a chance to evolve. Seeing past constraints to identify opportunities to pivot; becoming more creative, adaptive and agile. Ultimately, focusing on solutions that bring value for both business models and customers.
The time to act is now — so let’s look to the future!
1. Evolving business models to compete on quality, not just price
Rising costs of living mean meeting customers’ needs is more important than ever. Seeking to save money, delivery is perhaps a luxury that many feel they can go without. Yet the answer isn’t just cutting prices. This isn’t sustainable for retailers, drivers, the environment, or even end customers.
In fact, consumers are increasingly aware that low cost isn’t viable long-term. It simply comes at too high a price: for drivers and the environment, mainly. For retailers, too, offering fast-and-free is making too large a dent in their finances. Yet, for many consumers, delivery is too valuable a convenience to go without. As a result, they’re willing to adjust their expectations.
What does this mean for retailers? Focus on catering to your audience’s circumstances and offering them (environmentally and financially) sustainable options that they can embrace. Perhaps this means longer delivery times, at a lower price? Excellent service and reliability will also help you stand out from the competition. Likewise, expanding your reach to deliver to a wider customer base. As for strategies to support this evolution, we’ll touch on a few below.
2. Flexible deliveries (not just quick at all costs)
Following the peak of COVID-19, we work and live in different ways. This, naturally, impacts how and when customers would like to receive home deliveries. With many people still working from home, there’s less intense demand for evening delivery. Far more daytime options are possible!
Offering delivery flexibility also links to competing on quality, not just price. We know that rock-bottom prices aren’t sustainable. Quick deliveries, no matter their impact, aren’t sustainable either. Previously, it might have seemed reasonable to put half-empty vehicles on the road to deliver to many customers at once.
But the delivery sector needs to evolve from this. Offering delivery slots as a finite supply, for example. If end customers start to see them sell out, this enables seeing delivery as a service, not just a convenience. This encourages more responsible consumption and delivery models. Perhaps not the rapid turnaround that customers have been used to, but the more sustainable approach the sector needs!
3. Increase in time slot subscriptions
Consider the convenience of food subscriptions — a large and growing market. Time slot subscriptions for deliveries can offer similar customer convenience. You’d simply subscribe to a delivery from your go-to grocery provider, at a convenient frequency. Everyone at the address — the whole family, for example — could access the account. Easily adding anything that’s needed to the order (from the same store or other stores), up until a set cut-off time.
So, more than just a last-minute convenience, delivery becomes a service. A planning tool for the whole family! Plus, if delivery time slots are increasingly finite, a subscription is an effortless option.
4. Shifting to circular solutions
For the delivery sector to optimise sustainability, circular solutions need to be the default. For every evolution, innovation and updated business direction. Looking to 2023 and beyond, the delivery sector will likely see increasing progress in this area. Moving beyond the old, accepted ways of working by:
- Shifting from multiple-use solutions to zero-waste
- Designing and implementing zero-waste stackable shipping assets
- Innovating to continue ensuring convenience for retailers, drivers and end customers
These will be significant shifts and, naturally, there are hurdles to overcome. But the sector is ready to innovate!
5. Enhancing eco-friendly transparency
Seeing the positive impact of decisions we make encourages us to choose better, more often. As humans, that’s natural! So how will this evolve in the delivery sector?
Delivery tech will likely launch more tools showing end customers the difference their choices make. How does the delivery slot they choose affect carbon emissions? Do certain slots cost more because there’s added carbon offset? Understanding the wider implications of price and emissions helps guide informed choices. There’s motivation to wait a little longer if you know you’re saving money and it’s better for the climate!
These types of insights are key for fleets and retailers, too. How does offering wider delivery windows, for example, affect overall emissions? This data is crucial, too, for regulatory compliance and reaching climate goals. Most importantly, tracking change as it happens is rewarding and motivating for players at all links in the delivery chain.
6. More, smaller companies will work with last-mile platforms
An all-in-one delivery solution can transform your company’s reach and scope. Easy to get started, automated, and without the headache of running your own fleet. Plus, compliance with legal requirements and technical updates are guaranteed.
With rapid developments in user experience, a tech partner can help you ensure effortless quality. For drivers, think real-time notifications, optimised routes and live feedback. For end customers, think real-time delivery updates, quality customer support and easy feedback.
For small companies especially, last-mile platforms can mean a huge business boost. Reaching customers outside the local area, expanding their client base as they grow. Working directly with a delivery tech partner also cuts out expensive intermediaries. There’s no need to fight for supermarket shelf space, competing with big brands! Instead, leveraging e-commerce and (social) media enables selling directly to customers.
7. Growing collaborative fleets — and going electric
Maintaining your own fleet means costs quickly escalate. Collaborating with delivery partners is an increasingly attractive alternative. It ensures you can meet peak demand, but keeps expenses — and emissions — streamlined.
This win-win comes down to two key factors. Firstly, combining partners’ deliveries means fewer, fuller vehicles need to be on the road. That reduces fuel usage, enhancing cost-effectiveness and sustainability. Secondly, every partner broadens its delivery scope. Access to more vehicles means greater reach, elevating the service you can offer end customers.
A collaborative approach is also key in shifting to electric fleets. This evolution is expensive, done alone. Together, however, it becomes far more doable. For lower emissions and lower noise pollution, meeting regulations and appealing to climate-conscious customers.
8. Closing the gap between urban and rural deliveries
While urban areas naturally have denser demand, the rural market shouldn’t be overlooked. The need for convenience remains the same. Likewise, chilled deliveries of groceries and vital medicine. It’s important to evolve infrastructure to serve this market, with options adapted to each local context.
For even large companies operating their own fleet, delivering beyond large cities soon becomes inefficient. So, to ensure reaching and serving rural customers, collaborative delivery models are the way forward. Some rural residents may also have a long drive to their nearest shop, meaning at-home delivery would also be an expensive option for them. If all their orders were collaboratively delivered to a single pick-up point, however, they could still save time and money. This is just one step towards ensuring customers have the option of delivery, no matter where they live.
Particularly during the COVID-19 pandemic, we saw significant variances in access to food and medicine delivery between urban and rural zones. In rural areas, residents often still had to visit shops. But, by expanding rural delivery options, we can bolster touch-free delivery availability. This ensures readiness for the next potential pandemic or major event that may mean this style of delivery is needed.
Rural deliveries bring their own benefits, too! Less crowded streets tend to make for smoother driving and parking. It’s also quicker and easier for drivers to access houses and apartments in rural areas, compared to city centre routes.
In times of unpredictability, let’s push for innovation
The current pressures on the delivery sector offer a vital chance to evolve. Offering end customers insight into costs and the impact of their decisions. Providing choice and flexibility, while working to protect the climate. And maturing from always-available to sustainable models.
Ready to evolve your deliveries in 2023? Enjoy a free Gordon Tech trial here.