Perspectives

Last mile delivery after COVID-19: A world of things to solve

The pandemic has created a spike in demand for delivery. Businesses have responded, but they need to have a sound strategy for what comes next.

Growth in last mile delivery had been strong for a number of years, posing challenges for businesses but also driving steady innovation and progress. Then came the pandemic. The steady expansion gave way to a sudden, chaotic explosion in demand.

Businesses with owned delivery systems suddenly had a big advantage, and they set about adding capacity, extending hours, even branching out into more products. Think of a pizza restaurant adding lunch or even breakfast offerings, or a large grocery retailer opening more delivery slots. Businesses that didn’t have their own delivery capabilities leaned heavily on third-party gig economy services as a primary channel to reach customers. The system saw strains unlike any that had been seen before.

Food delivery, whether fresh items from grocers or prepared meals from restaurants, provides useful examples to help understand the disruption the pandemic caused in the last mile ecosystem—and the implications for the future. To thrive, businesses now need a sound approach that takes account of how much has shifted, and how much of the change will be lasting. The initial pandemic response, with businesses scrambling for quick fixes to meet surging demand, has mostly run its course, and the economy is reopening. But the last mile won’t be going back to its pre-pandemic state.

For one thing, the focus on safety won’t entirely go away—any more than the coronavirus itself will disappear from the planet. Some aspects of the shift in customer priorities from convenience toward safety and from wants to basic needs may persist. And subtler changes in customer behaviors and motivations, loyalties, and habits also must be taken into account.
 

Last mile customer delivery after COVID-19: A world of things to solve
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