As we move through 2023, we are experiencing the fastest delivery times the Last Mile market has seen in years. Why is this happening, and more importantly: will it last?
In April, the average time from placing an order to receive it was just 4 days, a significant improvement from 5.6 days during the same period last year, as highlighted in @project44’s recent “State of Last Mile” report. So, what’s fueling these faster deliveries?
On the transportation side, courier companies have successfully managed the initial challenges brought about by the pandemic, diversifying their carrier options to take advantage of the speed offered by new delivery services. Big names like @Amazon have moved inventory closer to customers, a strategy also adopted by other retail giants like Walmart and Target. These companies have increased their investment in fulfilment to facilitate faster deliveries, using their extensive store networks as hubs for next-day deliveries. However, industry experts warn that this pace may not be sustainable in the long run.
The rising costs associated with faster deliveries and changing customer preferences are pushing retailers to rethink their strategies. A significant number of consumers (62%, according to a Pitney Bowes BOXpoll market survey) prefer accurate delivery estimates over speed, indicating a potential shift in consumer expectations. Moreover, the aggressive delivery timelines promised by some companies have led to a decrease in on-time performance (83.9% to 80.4% YoY in April), suggesting the need for a balanced approach that combines cost-effectiveness with customer satisfaction.
What strategies do you think retailers could adapt to maintain both speed and accuracy in deliveries?