Three-quarters of apparel, durable goods and specialty retailers say they plan to offer two-day or faster delivery this year — while 42% are aiming for same-day delivery, according to consulting firm McKinsey & Co. However, faster deliveries will require connecting the middle and last miles.
Amazon set the bar back in 2005 when it introduced its Prime membership, which included free two-day delivery for subscribers. In 2019, the e-commerce giant upped the ante when it revised the service to include next-day delivery, too.
Since then, a global pandemic has upended e-commerce — accelerating growth and reconfiguring last-mile networks.
While some sense of normalcy has returned to markets and consumers are returning to stores, delivery speed remains critical to online shoppers. Retailers are investing more into multichannel strategies, connecting their online presence with their physical presence. A significant part of this investment is strengthening supply chains to connect the first, middle and last miles.
It’s the middle mile, however, that’s becoming the heart of multichannel strategies. The middle mile includes traditional distribution facilities where inventories are often managed and forecasted for stores and websites.
Investments in technology link this crucial part of supply chains even closer with the last mile to access crucial data for operational excellence, boost efficiency and increase delivery speed.
The visibility and data gained through these technologies are helping retailers to position inventory in the most effective distribution centers, fulfillment facilities and stores. This is important because many retailers are fulfilling e-commerce orders in different ways, and as such, they need to utilize their data to understand how much and what types of inventories are needed for each of their facilities.
In addition, quick and accurate automated solutions within fulfillment facilities are also a must. Linking inventory systems, automation and fulfillment processes to an online shop and adding last-mile delivery options has proved beneficial to retailers.
Gathering information throughout the supply chain process is also helping retailers offer more precise delivery times and more delivery options, enabling them to position inventory closer to consumers and allowing consumers to view inventory availability in real time. The added benefit of staging appropriate inventory closer to consumer demand is that it enhances the customer experience with faster deliveries.
Outlook:
As McKinsey notes: “Offering a compelling omnichannel experience used to be the bleeding edge of retail. Now it’s a requirement for survival.” Retailers need to be mindful of their strategies, decide which last-mile options will achieve their goals and take advantage of the many available technologies in the market today.
