5 Last mile delivery trends to watch out in 2023
As we get into 2023, the world seems to be steadily moving toward normalcy as consumers eagerly continue to make purchases, mainly from the comfort of their homes. The best brands in the world like Amazon, Walmart, BigBasket have made it through their growth in last mile delivery.
The future growth of every successful brand depends on how it shapes its last mile delivery based on the key trends. Locus, a leading-edge technology company solving Last-Mile logistics challenges shares 5 important last mile delivery trends that will contribute to the growth of businesses in 2023.
1) Pressure on drivers in the last mile to continue in 2023. Empowerment to be a key theme
The number of parcels that households require to be delivered continues to be on the rise. In India, the problem isn’t a driver shortage. In these regions, poor roads, unclear addresses, traffic jams, and a lack of detailed maps are the primary problems. A Boston Consulting Group survey mentioned that road congestion in just four Indian cities, Delhi, Mumbai, Kolkata, and Bengaluru, added up to a colossal $22 billion dollars in congestion costs. This situation gets worse when there is massive traffic and when customers, who are used to on-time deliveries, feel frustrated and constantly call and ask about the status of orders. When drivers are dissatisfied and underproductive, they fail to provide a delightful delivery experience for customers. This leads to a loss of customer trust and cuts down business growth. Hence, the focus in 2023 will be to make drivers happy and empower them.
2) Sustainability in last mile delivery – Not a differentiator anymore
In India, last mile emissions are increasing every passing year. A Stand.earth Research group report of 2022 mentioned that the last mile emissions per delivery are 285 gCO2, which is significantly higher than the global weighted average of 204 gCO2. This report also states that Indian cities like Delhi, Mumbai, Bengaluru, Kolkata, and Chennai emit more CO2 from last mile delivery than last mile emissions from France or Canada.
In 2023, there will be a rising need for businesses to automate and digitalize the last mile logistics operations in India. Not just this, businesses will incorporate parcel lockers in the last mile to reduce carbon emissions in the coming years.
Electric Vehicles (EVs) are also an active contributor toward minimizing carbon emissions in last mile delivery. An article mentions that 15-20% of last mile e-commerce cargo fleets have been electrified globally.
In 2023 sustainability will not be a luxury to showcase for businesses globally. It will be a mandatory need to win customers, and they will take incremental steps to achieve it.
3) The sweeping wave of omnichannel retailing
Omnichannel retailing is a process where businesses integrate all the channels to provide seamless shopping experiences to their consumers. In India, businesses are also keen to capitalize on the shopping boom of omnichannel. By investing in omnichannel capabilities, businesses can improve delivery control, speed, flexibility, and cost. It cuts unnecessary time for the product to move across intermediaries like the brand mother warehouse and makes last mile logistics more efficient. Hence in 2023, we will witness the sweeping wave of omnichannel retailing across India and the world.
4) Direct to Consumer (D2C) – Path to build a stronger customer base
Consumers today prize convenience and customization alongside price and wide product selection. This is offered in heaps by a D2C E-commerce model. It is an untapped market in India, and many popular D2C brands are vying to make it big in 2023. It becomes crucial for both types of D2C businesses to strengthen their last mile capabilities or risk losing out to the competition. To close the gaps between regional warehouses and consumer doorsteps, D2C brands are looking to invest in last mile delivery solutions. SaaS (Software as a Service) products have become a boon for businesses willing to get their D2C presence with higher levels of convenience, flexibility, and sustainability. So, 2023 will be a year of D2C brands strengthening their last mile delivery and expanding their D2C presence.
5) Robust investments in last mile Logistics Solutions With Advanced Analytics Capabilities and Artificial Intelligence (AI) to continue
India’s last mile delivery market is moving in a similar direction to the US and China’s markets. The penetration of last mile delivery in India is more than 10%. Also, it states that India’s last mile delivery market size will touch $6-7 billion by 2024. The overall e-commerce shipments will grow to 5 billion by 2025 from 1.36 billion shipments in 2020. With India’s private equity and venture capital investments in logistics technology worth over 1.45 billion U.S. dollars with 34 deals in 2021, the last mile delivery is expected to receive more push in 2023. More than half of the businesses mention that delivery cost is their primary challenge in providing last mile delivery services. To make the last mile cost-efficient and generate more revenues from it, businesses are looking to increase their investments in AI technologies.