7 Trends in Last-Mile Delivery to Watch in 2022

7 Trends in Last-Mile Delivery to Watch in 2022

We all know it. The pandemic has revolutionized consumer behavior in ways that we could have never imagined, from the increased reliance on online shopping to the preference towards collection points as a delivery method of choice. Yet, one thing remains unchanged in customers: their sense of immediacy. 

E-commerce companies nowadays are placing a great deal of emphasis on improving last-mile logistics. With multiple e-commerce options available in the market, consumers can now easily choose where they want to order from. This makes it all the more important for retailers to differentiate themselves from their competitors in trying to provide the best possible delivery experience.

What last-mile delivery trends have e-commerce brands leveraged to keep up with the market? Here are the top 7 last-mile delivery trends that you should look out for in 2022.

Rapid Last-Mile Fulfillment

Gone are the days where it is acceptable to receive online purchases within one or two weeks. 68% of consumers even claimed that they will only shop if fast shipping is available. Furthermore, 90% of consumers expected to receive their parcels within a week even with free shipping

Bigger retailers such as Amazon and Walmart have raised the bar on consumer expectations with their same-day shipping. Therefore, it is important for retailers to optimize the order fulfillment process to meet the rising demands.

Urban Warehousing

While many physical retailers have closed down, e-commerce giants are taking the opportunity to turn them into urban warehouses. Opening fulfillment centers in a heavily populated area allows retailers to have closer and faster access to a large volume of people while maintaining a great profit. 

One great example of this is how IKEA has opened a new store in one of Europe’s busiest shopping streets to make their products even closer to customers. Since a vast majority of shoppers reside within the metropolitan area, retailers would have easier access to provide fast shipping or even same-day deliveries.

Insourcing Delivery

Last-mile logistics can arguably be the most expensive cost in the supply chain process, accounting for 53% overall cost of shipping. To reduce final mile logistics costs, some retailers have opted to handle them in-house or work together with competitors in the region to share delivery fleets. 

Given that e-commerce growth is here to stay, online retailers such as Kogan.com and Temple & Webster have started to consider insourcing fulfillment as well. Although retailers have traditionally outsourced logistics to have more flexibility as demand fluctuates, investing in in-house fulfillment is starting to make more sense as retailers look to scale up.

Robotic, Drones & Autonomous Vehicles

As e-commerce demand peaks, companies need to gear up their manpower to deliver parcels. However, we’ve seen how there is a labor shortage in recruiting qualified drivers. 

More and more retailers today have started to experiment with robotics, drones, and autonomous vehicles as delivery modes. Recently, Walmart has teamed up with Zipline to pilot their drone-delivery system

Customer Experience through Last Mile Delivery

When it comes to traditional retail, customer experience is more or less defined. In the world of e-commerce, however, the definition is blurry. When you think of it, last-mile delivery might be the only moment where the brand meets the customers directly. 

Customer experience in last-mile delivery is now more crucial than ever; 84% of consumers even stated that they were unlikely to make a second purchase after a poor last-mile delivery experience. Therefore, improving the delivery experience is key. 

Some examples of how brands can do this are by updating their customers with the parcels’ estimated delivery date , thus allowing customers to track their parcels in real-time.

No Returns Just Refunds

In 2020, the number of online purchases being returned jumped by 70%. Retailers are left to pay for the returns processing fees, which can run as high as 15-20% of the costs of the products.

Big retailers such as Amazon and Walmart have since approached product returns differently. Instead of paying for customers’ returns, they would refund the purchase price while leaving the products in customers’ hands. These retailers are using artificial intelligence to calculate whether processing a return made sense economically.

Crowdsourcing Last Mile Delivery

While we are perhaps more familiar with crowdsourced logistics in grocery or meal deliveries, these days we are seeing more retailers adopting crowdsourcing last-mile delivery in their supply chain to extend their reach and reduce costs.

Even the bigger players are getting into action; Amazon, for instance, utilises crowdsourced logistics through Amazon Flex — a program that allows the retail giant to expand its reach by working with vehicle owners. In a sense, crowdsourced delivery not only enables retailers to fulfill their orders in a more efficient way, but also offers greater visibility into the whole delivery process.

What Will 2022 Look Like?

As e-commerce continues to evolve, many exciting trends are emerging in the last-mile delivery space. E-commerce businesses today should constantly evaluate how they can better serve their customers with one or more of these trends to further differentiate themselves.

What will the future of last-mile logistics be like in 2022? Do look out for our next edition to find out!

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