Perspectives

Last mile logistics firms to address changing consumer expectations

The COVID-19 pandemic forced the UK government to take numerous unprecedented measures. This included restricting the movement of people and temporary closure of all retail apart from those selling essential goods, significantly increasing the dependence on online shopping and delivery services. This has exacerbated the challenges faced by logistics firms, in the final step of the delivery process from a distribution facility to the consumer. Even as the country reopens the reliance on delivery services may continue.
 

Overall demand has dropped, but online shopping and delivery see a spike

When the country went under lockdown, it caused a substantial slump in consumer consumption. The lack of demand impacted the last mile transportation and intermodal connectivity of goods within the country. Some of these delivery services had to scale back or cease operations completely, those that remained operational faced worker shortages, inconsistent demand patterns and supply delays. Now as the lockdown eases and demand increases, delivery services will need to prepare for further shifts in spending and order collection patterns.


Delivery services will need to improve the overall customer experience

More than forty per cent of all UK respondents chose online purchase as the preferred option for most non-essential or discretionary items such as clothing and electronics, due to restricted access. This trend has slowed down after the lockdown has eased, though safety concerns remain, only 51 per cent of all respondents said they felt it was safe to go to a store. New rules announced by the government regarding compulsory masks when entering stores, may reduce safety concerns going forward.

Of all the UK consumers who purchased discretionary items online, more than 50 percent wanted their orders to be delivered to the door. For example, only 36 per cent of consumers buying clothes, wanted to click and collect. The respondents who chose to collect their orders in-store stated that the reason was because it was safer, cheaper and less stressful. Fifteen per cent cited environmental impact as a decision factor. Forty seven per cent of consumers also stated that they are willing to spend more for convenience. These findings indicate that as consumers’ preferences change, there is an opportunity for logistics businesses to improve the overall consumer experience, by investing in safer and simpler processes.


Logistics businesses invest in technology to address safety concerns

While capacity exists for long distance distribution, the true constraint for logistics businesses is at the local level, during the final mile delivery. Challenges include intensive labour, restrictions on neighbourhood delivery vehicles and regulatory controls limiting time on the road. To take advantage of the growing demand, logistics businesses may need to address these challenges, in addition to the required safety measures.

With the support of technology, some logistics businesses have been able to roll out delivery options quickly, manage disruption and improve visibility across their distribution network. For example, applications that help on-board new drivers, track driver location and contact tracing, remind users of safety measures and educate shoppers regarding the new safety focused delivery process.

Logistics businesses are also using last mile contactless technology, such as drone delivery and unattended safe locker delivery. These technologies can improve security, provide flexibility for both retailers and shoppers and also support delivery companies facing personnel shortages. Integrating such technologies into delivery operations may help businesses address both safety and operational challenges.

The usage of drone is likely to grow considerably, with various trials being conducted successfully. For example, drone delivery service provider Skyports in collaboration with Vodafone and Deloitte transported medical supplies and samples for the NHS in Scotland. Drones offer the opportunity to quickly and easily take equipment and purchases to places that are difficult to reach by conventional means of transport. Driven by the need for essentials during the lockdown, logistic companies paired up medical services with a focus on distributing medical prescriptions and equipment to residents using drones. For home delivery this may still be in the early stages but the potential of drone delivery of essential items is the tip of the iceberg.

As our survey reveals, consumer needs and behaviours are changing; logistics businesses will need to re-evaluate strategies, especially because consumer expectations may have changed for good.

For more specific consumer behaviour insight from a global biweekly survey of 18 countries, you can access our Global hub.

Click here for more details on the Skyports collaboration.

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