Conquering the last mile: Walmart, Amazon embrace the unusual
Friday, June 16, 2017
One of the largest problems stumping efficiency and profitability experts is arguably the most difficult: getting goods through the gauntlet of the "last mile" — the final leg of a product's transportation journey before it lands with the customer.
While striving for competitive pricing, 3PLs know this dilemma all too well. That means that low-cost options are limited to even large e-commerce players, particularly in the case of rural deliveries.
While traditional delivery providers such as UPS, FedEx and USPS are trying to innovate to keep pace with demand, a new collection of unusual solutions has cropped up, giving customers more choices at the hands of the gig economy.
Walmart: Don't clock out just yet
While some of its competitors have hired a new workforce, Walmart is tapping into its own established pool of workers for deliveries — at least in two New Jersey and Arkansas pilot locations.
Employees can volunteer to switch gears into package delivery on their way home, and they are matched with customers that are close to their typical commute route. The megaretailer is also offering a shop-for-you service that assembles groceries for pickup at the store, but this program looks to be distinct: employees are given sealed boxes from Walmart's e-commerce division but do not shop for the items first.
While this increases integrity and minimizes issues like theft and tampering, employee cars might pose a problem: unlike comparatively-sterile delivery truck bays, an employee car could smell of secondhand smoke or have allergy-triggering pet dander.
Amazon: Thinking outside the box
It's no surprise that the original force behind drone delivery potential would embrace thinking outside the box — or, in this case, the temperature-controlled bag. Amazon has tried a dizzying amount of solutions (both real and conceptual) to bridge the gap between customers and their goods, including a self-serve Amazon Locker program that bypasses some of the mistake-prone process of 3PL delivery in difficult regional areas.
The company's ubiquitous A-to-Z smile logo boxes have been been quietly traded out for green bags in certain metro areas for the last decade as customers look to order heads of lettuce and pounds of fresh ground beef for home delivery. This fresh initiative is a solid complement to the company's Amazon Prime Pantry program, which handles dry goods like dog food, cereal and toilet paper and expresses each item as a percentage-of-box-filled during the shopping process.
The Amazon Fresh program has gained considerable traction in recent years in light of grocery-only competitors like Shipt and Instacart nipping at its refrigerated heels with an army of app-sourced gig workers.
The IoT: Along for the ride
No matter which service is delivering temperature- or vibration-sensitive products, sensors and transparency are giving customers and managers more insight than ever before.
As the cost of box or truck-mounted sensors and IoT technology continues to trend down with new innovations, the end customer can quickly and easily check everything from package progression to in-the-moment delivery time estimates that factor in traffic. This gives manufacturers an important incentive to make sturdy, performance-proven solutions for cold storage and cushioning fill, as real-time metrics will provide continuous feedback without necessarily needing to involve the end customer through a survey.
The last mile is getting smaller, and it's shrinking due to a joint effort from the gig economy, consumer demand and technological innovation. While automated or drone delivery may still be a few years off, it's safe to say that large retailers have managed a network of solutions that's about as close to a win-win as home delivery can hope to achieve.
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