How last-mile delivery technologies can enhance delivery platforms

Azryl AliMarch 30, 2021

Last-mile delivery was once known as an excellent capability to have instead of being an essential aspect of capturing the market share.

Now, it is a must-have component of almost all business plans, especially in the food and retail industry. Before the coronavirus pandemic, most customers were willing to pay a 12% premium for the convenience of last-mile delivery. But now, bringing orders straight to the customer’s doorstep is the only way for many retailers and restaurateurs to remain competitive in this market.

Apart from the pandemic, the rise of smartphone usage has led to a huge spike in demand for food and retail delivery platforms across the world, particularly in Asia. In Southeast Asia, the total gross value of food delivery reached US$11.9 billion in 2020, a staggering 183% growth from 2019. As these markets continue to grow rapidly, so do the delivery challenges, such as the need for better routing to the customer’s door. The lack of optimized last-mile addressing significantly increases the time and cost associated with delivery or even causes failed deliveries.

How technology is accelerating last-mile delivery

According to Statista, 66% of buyers expect their orders to be delivered to their doorstep, while some of them do not mind paying extra to get the package delivered the same day. For some retail product categories, including groceries and electronics, customers are more likely to pay 45% more for faster delivery. Therefore, it is evident that there is a demand for instant or same-day delivery assistance among eCommerce retail and food delivery customers.

Thankfully, over the past few years, delivery technologies have been proliferating. Drones, contextual last-mile delivery solutions, Internet of Things (IoT) and artificial intelligence (AI)-enabled autonomous delivery vehicles have been introduced, driving down labour costs, reducing dependency on employee availability, and allowing round-the-clock delivery.

Thanks to better technologies of geo-localization and a more robust IT network, customers now have visibility on every step of their parcel journey.

Claire Bertin, Head of Marketplace Logistics of Lazada Thailand Tweet

“Last-mile delivery companies are putting a strain on constantly improving traceability and visibility for the customer. Thanks to better technologies of geo-localization and a more robust IT network, customers now have visibility on every step of their parcel journey. The accuracy of the delivery promise is becoming better and better so consumers know exactly when to expect their orders. Thanks to better information, they can make sure to be ready when their parcel arrives, to be reachable by phone, or be able to reschedule a delivery at their convenience,” shares Claire Bertin, Lazada’s head of marketplace logistics in Thailand.

Retailers and restaurateurs are two sectors whose business models and strategies are enhanced by effective last-mile delivery technologies. The utilization of last-mile trends opens up opportunities for better customer experience, streamlined operations, and increased market shares. However, business owners in the said vectors should carefully assess and balance their investments in specific delivery technologies without compromising their precious capital. These unprecedented times created significant challenges, and opportunities exist for those who can set up a successful last-mile delivery strategy.

Tailoring delivery technologies

Different delivery technologies will suit different types of businesses through this ecosystem, whether in the retail or food sector. Apart from considering the overall business strategy, each technology should be evaluated across the critical workforce and risk-related dimensions. For example, small businesses will find it challenging to choose drone delivery technologies since it requires substantial amounts of capital. Thankfully, some technologies do not require much but can deliver the same amount of efficiency.

Contextual and real-time last-mile delivery solutions shorten the number of miles and time needed to complete a delivery, contributing to faster and more efficient delivery routing and navigation—from pick-up to delivery to door.

Xander van der Heijden, CEO and founder, UNL Tweet

“It starts with accurate addressing and the ability to contextualize and activate data at a hyper-local level. From the digitization of merchant POI and data for the first mile to customizing delivery locations with critical access points and routing instructions for the last-mile and last-meter,” shares Xander van der Heijden, CEO and founder of UNL, a smart location platform for navigation and location-based services.

He adds, “In this, an industry gamechanger is the capability to tap into the know-how of your delivery drivers, who often know better and more efficient routes than the standard routing that solutions like Google provide. Our dynamic mapping infrastructure allows to collect and connect data points from various sources and continuously feed and optimize the UNL Router in real-time, essentially creating the ultimate efficient delivery network.”

Another model that enables businesses to take advantage of last-mile delivery is the delivery network carrier (DNC) model. This allows retailers and restaurateurs to transfer a portion of the risks to other DNC providers. By adopting a DNC model, businesses can now focus on growing their business without thinking about the fulfillment side of the process.

Real-time geolocalization is critical to ensure both the delivery service and the client can meet at the same time at the same place.

Jean-Charles Cabelguen, technology innovator invested in deep tech Tweet

Jean-Charles Cabelguen, technology innovator invested in deep tech shares how physical access can be optimized:

“Internet of Things (IoT) can also address last-mile challenges through synchronization and physical access. Real-time geolocalization is critical to ensure both the delivery service and the client can meet at the same time at the same place. Thanks to IoT, clients and delivery services can be synchronized. At the same time, optimization of physical access through IoT allows anyone to securely whitelist the delivery services and to securely allow delivery companies to open building doors. This, in return, makes last-mile delivery efficient.”

Conclusion

When assessing future last-mile delivery strategies, organizations must consider longer-term trends that will likely unfold after the pandemic. There are different last-mile models and technologies to consider. However, businesses must always analyze various factors before committing to any specific models and technologies.