The final hurdle: the latest innovations in last-mile grocery delivery

The final hurdle: the latest innovations in last-mile grocery delivery

By
Louise Burfitt
May 25, 2021

🍽️ What is it?

  • Tracking notification received, letting you know your groceries are en route, and all that’s left for you - the consumer - to do is clear the fridge shelves and get ready to unpack your shopping crates. For the retailer, however, it isn’t quite so simple. 
  • Far from it, in fact: the so-called ‘last mile’ of delivery is the final step of the transportation and delivery of goods to the end customer. It’s the stage at which the groceries finally land on the customer’s doorstep.

🤔 Tell me more…

  • You received said tracking notification at 9am, and your groceries still haven’t been delivered by lunchtime? That, in a nutshell, is the last-mile delivery problem encapsulated. 
  • The last leg of the delivery process is famously the most expensive and the most inefficient for retailers. In fact, last-mile costs typically account for over half of the overall cost of shipping. Then there’s inefficiencies like traffic and making several stops with low drop sizes to grapple with. 
  • That’s why the last-mile delivery sector is ripe for disruption - and many entrepreneurs have been taking on the challenge, launching a host of delivery platforms that offer new ways to tackle this age-old problem.

🤷 Why?

  • Thanks to the ‘Amazon effect’, consumers have high expectations when it comes to delivery. And that’s particularly amplified when it comes to fresh groceries. When you order eggs, milk and bread online, you don’t want it to arrive in two weeks - you want it now. Consumers are demanding faster, cheaper delivery, with in-depth tracking and rerouting options - and retailers and third-party delivery platforms are responding.
  • Knowing how important the last-mile experience is to consumers, retailers consider it wise to invest in more efficient and slicker services. Research shows that a quarter of shoppers are willing to pay more for improved delivery, and 55% will switch to another store if it offers faster delivery - grocery brands are hoping to capitalise on this.
  • The COVID-19 pandemic is also a major driver of the growth in last-mile grocery delivery. Many shoppers who had never bought groceries online before switched overnight due to restrictions and understandable feelings of fear about venturing to the store in person. UK figures suggest that the pandemic boosted demand for last-mile delivery, accelerating growth in the sector by five years in just nine months!
Source: Nuro

🔍 How is it shaping up?

  • The growth of e-commerce for groceries has had a positive impact on last-mile services. As more and more consumers have switched to ordering their food shop online, companies have had to adapt quickly, and third-party last-mile companies have sprung up in their droves. 
  • Smarter use of data analytics and high-tech solutions is helping to improve last-mile delivery experiences for consumers - and reducing the cost for retailers. Routific, for example, is a third-party delivery optimization software that brands can use to improve tracking and optimise routes. 
  • Many big players - like Walmart in the USA and Sainsbury’s in the UK - have launched their own super-speedy delivery services in the past year. Spark Delivery by Walmart and Chop Chop by Sainsbury’s are designed to compete with Amazon’s Prime Now delivery for groceries. 
  • Ultrafast home grocery delivery is another major way this trend is manifesting. Companies that promise doorstop fresh food delivery in 15 minutes or less are proliferating across Europe: from Cajoo in France, to Flink and Gorillas in Germany, to Dija and Jiffy in the UK. 
  • Many retailers are also choosing to use third-party delivery platforms to get the goods to the consumer’s door. This enables grocery stores to scale up their capability to meet online orders much faster than developing their own services, and is easier for investors to stomach.
  • Many of these third-party startups are focusing on micro-fulfillment - which has been referred to as the AirBnB of logistics. Micro-fulfillment centres are small warehouses, generally found in cities, which help to reduce the distance in the final mile of delivery by bringing goods closer to the consumers who buy them. Startups like Fabric, Genie Delivery and Vembla are working in this space. The pros of micro-fulfillment logistics include faster, more efficient delivery and lower emissions
  • In a similar story, some last-mile startups are focusing on ‘dark stores’ - ultra-rapid grocery delivery companies like Getir, Weezy and Zapp arrange fulfilment from small dark warehouses, which are located in residential areas. Such stores serve only one purpose: fulfilling online orders. Major food stores like Target and Kroger are experimenting with dark store usage to find the most efficient fulfillment model. 
  • Crowdsourced delivery platforms are also on the up as retailers take advantage of the gig economy and an option that’s usually fast and pretty simple, all things considered. The US’ Instacart is perhaps the most well-known of these delivery-as-a-service (DaaS) marketplaces, but keep an eye on Belgium’s Piggybee and Amazon Flex.
  • Lastly, technology-driven innovation in the last-mile delivery sector is really ramping up. Nuro and Starship Technologies have both developed autonomous delivery vehicles using robotics. Drone delivery is also another option grocery stores are exploring: companies such as Flytrex, Wing and Zipline are some of the major players in this area. UK supermarket Tesco has also trialled food delivery by drone. Speed and convenience are major advantages, but consumer acceptance and regulatory approval remain big hurdles to overcome.
View the database of 30+ Last Mile companies here

👀 Who? (27 companies in this space)

  • Amazon Flex (Amazon’s last-mile service, global)
  • Big Basket (doorstep grocery delivery, India)
  • Buymie (mobile first, on-demand grocery delivery platform, Ireland)
  • Cajoo (15-minute home grocery delivery, France)
  • Chop Chop by Sainsbury’s (60-minute grocery delivery, UK) 
  • Dija (ultrafast grocery delivery, UK)
  • Flink (10-minute delivery platform, Germany)
  • Flytrex (drone delivery, Israel)
  • FreshDirect (online fresh grocery platform with delivery, USA)
  • Genie Delivery (micro-fulfillment delivery platform, UK)
  • Getir (ultrafast delivery startup, Turkey)
  • Gorillas (delivery platform, Germany)
  • Instacart (doorstep grocery delivery platform, USA)
  • Jiffy (online supermarket with ultrafast delivery, UK)
  • Nuro (autonomous delivery robots, USA)
  • Ocado (online grocery website, fulfilment technology and last-mile routing management technology, UK)
  • Onfleet (last-mile delivery platform, USA)
  • Piggybee (crowdshipping, Belgium)
  • Routific (route optimization, USA)
  • Spark Delivery by Walmart (crowdsourced delivery platform, USA)
  • Starship Technologies (self-driving robots, USA/UK)
  • Stash (ultrafast grocery delivery, Switzerland) 
  • Vembla (last-mile grocery delivery, Sweden)
  • Weezy (on-demand online grocery ordering and delivery, UK)
  • Wing (drone deliveries, USA, Europe & Australia)
  • Zapp (ultrafast delivery, UK)
  • Zipline (drone delivery, USA)

📈 The figures

  • In the long-term online grocery delivery is expected to grow at an estimated CAGR of 29% between 2020 and 2024.
  • Since the start of the pandemic over $2 billion has been invested into vertically integrated, micro-convenience delivery startups. 

 

Source: Fabric

  📦 Case study: Fabric

  • Logistics platform Fabric is a startup focused on last-mile fulfilment. Founded in Israel, the company is now based in NYC, where it has several micro-fulfillment centres.
  • The startup has raised a total of $136 million in venture capitalist funding, following a $43 million Series A round in February this year. 
  • So how does it work? Fabric partners with brand retailers on last-mile distribution hubs, and has made its name out of repurposing disused chain stores, gyms and the like. 
  • Each Fabric hub (with an average square footage of 6k) can house about 15k SKUs and is equipped to handle about 500 orders a day. 
  • Same-day delivery direct from the fulfillment centres is made possible by gig-economy delivery partnerships. 
  • Formerly known as Commonsense Robotics, the company uses automation and AI-powered robotic arms to reduce manual picking cost and scale more efficiently.
  • One of Fabric’s largest clients is FreshDirect, a leading online fresh food grocer.
  • The startup’s future plans entail expanding its product offerings and accelerated onboarding for retailers.

🚚 Case study: Gophr

  • Gophr is a last-mile delivery provider based in the UK. The company bills itself as ‘a smart delivery company powered by better couriers’ and operates in 50 UK cities.
  • Founded in 2015, the startup has already fulfilled over 2 million same-day deliveries, for brands including HelloFresh, Selfridges and British supermarket chain The CoOp. 
  • The company is also the UK’s fastest-growing last-mile delivery service.
  • In February this year, it raised £4 million in funding to invest in its product off the back of 300% growth in its revenue over the past year.
  • This stunning growth has been powered by improved delivery performance at the courier level - thanks to enhanced data, better routing and incentives for couriers. This has helped Gophr grow rapidly and achieve net profitability
  • The CEO Seb Robert has emphasised the ‘people’ aspect of the last-mile delivery sector. So rather than focus on drones and autonomous vehicles, Gophr has invested in better couriers, which have been shown to lead to better delivery outcomes. 
  • Operational in most major UK cities, the startup can already boast 5,000 clients.
  • Gophr will use its latest investment to strengthen its core product with improved user design and customisation options for clients. Its aim is to become the smartest same-day delivery platform out there.

👍 The good

  • New trends in last-mile delivery are offering more choices to consumers, many of whom have turned to online grocery shopping in this difficult year. Extra ease and convenience is always a plus, and so innovative tracking and more efficient delivery services are likely to prove hits with shoppers.
  • Research has also shown that an awesome last-mile delivery experience helps to keep customers coming back. 82% of satisfied consumers will recommend a positive delivery service to friends and family, while 55% said that a two-hour delivery option would make them more likely to stay loyal to a grocery provider. So it makes sense for retailers to invest in speedy options. 
  • Getting last-mile delivery right can make savings for brands, too - hitting on the sweet spot between what customers want and outgoings for retailers isn’t easy, but it can be done. And thankfully, it’s getting easier with the helping hand of third-party platforms, crowdshipping and innovative technology and robotics.

👎 The bad

  • There’s no getting around it: last-mile delivery is expensive, and speedy delivery even more so. Thanks to the innovations detailed above, costs are coming down, but retailers still have work to do to solve the cost inefficiencies of the last-mile problem
  • With the new fleet of ultrafast grocery delivery companies, supermarkets working on next-day delivery options could soon look pretty outdated. Pressure to be as fast as possible will only increase thanks to high consumer expectations and the ‘Amazon effect’. 
  • Some last-mile delivery platforms rely on gig economy workers as couriers, while crowdshipping platforms do so as a matter of course. 
  • There’s also the environmental problems associated with cities clogged with delivery drivers, though micro-fulfillment and drone delivery may provide answers here.

💡 The bottom line

  • The future of last-mile delivery is sure to be fascinating, as e-commerce groceries only look set to grow, even once the pandemic has fizzled out. 
  • Greater connectivity, data analytics, technology and hyperlocal options are likely outcomes. The last mile remains a conundrum, asking retailers to perform a difficult balancing act between consumer expectations and their own need to break even.

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Love it 😁 Meh 😐 Hate it 🙁

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🍽️ What is it?

  • Tracking notification received, letting you know your groceries are en route, and all that’s left for you - the consumer - to do is clear the fridge shelves and get ready to unpack your shopping crates. For the retailer, however, it isn’t quite so simple. 
  • Far from it, in fact: the so-called ‘last mile’ of delivery is the final step of the transportation and delivery of goods to the end customer. It’s the stage at which the groceries finally land on the customer’s doorstep.

🤔 Tell me more…

  • You received said tracking notification at 9am, and your groceries still haven’t been delivered by lunchtime? That, in a nutshell, is the last-mile delivery problem encapsulated. 
  • The last leg of the delivery process is famously the most expensive and the most inefficient for retailers. In fact, last-mile costs typically account for over half of the overall cost of shipping. Then there’s inefficiencies like traffic and making several stops with low drop sizes to grapple with. 
  • That’s why the last-mile delivery sector is ripe for disruption - and many entrepreneurs have been taking on the challenge, launching a host of delivery platforms that offer new ways to tackle this age-old problem.

🤷 Why?

  • Thanks to the ‘Amazon effect’, consumers have high expectations when it comes to delivery. And that’s particularly amplified when it comes to fresh groceries. When you order eggs, milk and bread online, you don’t want it to arrive in two weeks - you want it now. Consumers are demanding faster, cheaper delivery, with in-depth tracking and rerouting options - and retailers and third-party delivery platforms are responding.
  • Knowing how important the last-mile experience is to consumers, retailers consider it wise to invest in more efficient and slicker services. Research shows that a quarter of shoppers are willing to pay more for improved delivery, and 55% will switch to another store if it offers faster delivery - grocery brands are hoping to capitalise on this.
  • The COVID-19 pandemic is also a major driver of the growth in last-mile grocery delivery. Many shoppers who had never bought groceries online before switched overnight due to restrictions and understandable feelings of fear about venturing to the store in person. UK figures suggest that the pandemic boosted demand for last-mile delivery, accelerating growth in the sector by five years in just nine months!
Source: Nuro

🔍 How is it shaping up?

  • The growth of e-commerce for groceries has had a positive impact on last-mile services. As more and more consumers have switched to ordering their food shop online, companies have had to adapt quickly, and third-party last-mile companies have sprung up in their droves. 
  • Smarter use of data analytics and high-tech solutions is helping to improve last-mile delivery experiences for consumers - and reducing the cost for retailers. Routific, for example, is a third-party delivery optimization software that brands can use to improve tracking and optimise routes. 
  • Many big players - like Walmart in the USA and Sainsbury’s in the UK - have launched their own super-speedy delivery services in the past year. Spark Delivery by Walmart and Chop Chop by Sainsbury’s are designed to compete with Amazon’s Prime Now delivery for groceries. 
  • Ultrafast home grocery delivery is another major way this trend is manifesting. Companies that promise doorstop fresh food delivery in 15 minutes or less are proliferating across Europe: from Cajoo in France, to Flink and Gorillas in Germany, to Dija and Jiffy in the UK. 
  • Many retailers are also choosing to use third-party delivery platforms to get the goods to the consumer’s door. This enables grocery stores to scale up their capability to meet online orders much faster than developing their own services, and is easier for investors to stomach.
  • Many of these third-party startups are focusing on micro-fulfillment - which has been referred to as the AirBnB of logistics. Micro-fulfillment centres are small warehouses, generally found in cities, which help to reduce the distance in the final mile of delivery by bringing goods closer to the consumers who buy them. Startups like Fabric, Genie Delivery and Vembla are working in this space. The pros of micro-fulfillment logistics include faster, more efficient delivery and lower emissions
  • In a similar story, some last-mile startups are focusing on ‘dark stores’ - ultra-rapid grocery delivery companies like Getir, Weezy and Zapp arrange fulfilment from small dark warehouses, which are located in residential areas. Such stores serve only one purpose: fulfilling online orders. Major food stores like Target and Kroger are experimenting with dark store usage to find the most efficient fulfillment model. 
  • Crowdsourced delivery platforms are also on the up as retailers take advantage of the gig economy and an option that’s usually fast and pretty simple, all things considered. The US’ Instacart is perhaps the most well-known of these delivery-as-a-service (DaaS) marketplaces, but keep an eye on Belgium’s Piggybee and Amazon Flex.
  • Lastly, technology-driven innovation in the last-mile delivery sector is really ramping up. Nuro and Starship Technologies have both developed autonomous delivery vehicles using robotics. Drone delivery is also another option grocery stores are exploring: companies such as Flytrex, Wing and Zipline are some of the major players in this area. UK supermarket Tesco has also trialled food delivery by drone. Speed and convenience are major advantages, but consumer acceptance and regulatory approval remain big hurdles to overcome.
View the database of 30+ Last Mile companies here

👀 Who? (27 companies in this space)

  • Amazon Flex (Amazon’s last-mile service, global)
  • Big Basket (doorstep grocery delivery, India)
  • Buymie (mobile first, on-demand grocery delivery platform, Ireland)
  • Cajoo (15-minute home grocery delivery, France)
  • Chop Chop by Sainsbury’s (60-minute grocery delivery, UK) 
  • Dija (ultrafast grocery delivery, UK)
  • Flink (10-minute delivery platform, Germany)
  • Flytrex (drone delivery, Israel)
  • FreshDirect (online fresh grocery platform with delivery, USA)
  • Genie Delivery (micro-fulfillment delivery platform, UK)
  • Getir (ultrafast delivery startup, Turkey)
  • Gorillas (delivery platform, Germany)
  • Instacart (doorstep grocery delivery platform, USA)
  • Jiffy (online supermarket with ultrafast delivery, UK)
  • Nuro (autonomous delivery robots, USA)
  • Ocado (online grocery website, fulfilment technology and last-mile routing management technology, UK)
  • Onfleet (last-mile delivery platform, USA)
  • Piggybee (crowdshipping, Belgium)
  • Routific (route optimization, USA)
  • Spark Delivery by Walmart (crowdsourced delivery platform, USA)
  • Starship Technologies (self-driving robots, USA/UK)
  • Stash (ultrafast grocery delivery, Switzerland) 
  • Vembla (last-mile grocery delivery, Sweden)
  • Weezy (on-demand online grocery ordering and delivery, UK)
  • Wing (drone deliveries, USA, Europe & Australia)
  • Zapp (ultrafast delivery, UK)
  • Zipline (drone delivery, USA)

📈 The figures

  • In the long-term online grocery delivery is expected to grow at an estimated CAGR of 29% between 2020 and 2024.
  • Since the start of the pandemic over $2 billion has been invested into vertically integrated, micro-convenience delivery startups. 

 

Source: Fabric

  📦 Case study: Fabric

  • Logistics platform Fabric is a startup focused on last-mile fulfilment. Founded in Israel, the company is now based in NYC, where it has several micro-fulfillment centres.
  • The startup has raised a total of $136 million in venture capitalist funding, following a $43 million Series A round in February this year. 
  • So how does it work? Fabric partners with brand retailers on last-mile distribution hubs, and has made its name out of repurposing disused chain stores, gyms and the like. 
  • Each Fabric hub (with an average square footage of 6k) can house about 15k SKUs and is equipped to handle about 500 orders a day. 
  • Same-day delivery direct from the fulfillment centres is made possible by gig-economy delivery partnerships. 
  • Formerly known as Commonsense Robotics, the company uses automation and AI-powered robotic arms to reduce manual picking cost and scale more efficiently.
  • One of Fabric’s largest clients is FreshDirect, a leading online fresh food grocer.
  • The startup’s future plans entail expanding its product offerings and accelerated onboarding for retailers.

🚚 Case study: Gophr

  • Gophr is a last-mile delivery provider based in the UK. The company bills itself as ‘a smart delivery company powered by better couriers’ and operates in 50 UK cities.
  • Founded in 2015, the startup has already fulfilled over 2 million same-day deliveries, for brands including HelloFresh, Selfridges and British supermarket chain The CoOp. 
  • The company is also the UK’s fastest-growing last-mile delivery service.
  • In February this year, it raised £4 million in funding to invest in its product off the back of 300% growth in its revenue over the past year.
  • This stunning growth has been powered by improved delivery performance at the courier level - thanks to enhanced data, better routing and incentives for couriers. This has helped Gophr grow rapidly and achieve net profitability
  • The CEO Seb Robert has emphasised the ‘people’ aspect of the last-mile delivery sector. So rather than focus on drones and autonomous vehicles, Gophr has invested in better couriers, which have been shown to lead to better delivery outcomes. 
  • Operational in most major UK cities, the startup can already boast 5,000 clients.
  • Gophr will use its latest investment to strengthen its core product with improved user design and customisation options for clients. Its aim is to become the smartest same-day delivery platform out there.

👍 The good

  • New trends in last-mile delivery are offering more choices to consumers, many of whom have turned to online grocery shopping in this difficult year. Extra ease and convenience is always a plus, and so innovative tracking and more efficient delivery services are likely to prove hits with shoppers.
  • Research has also shown that an awesome last-mile delivery experience helps to keep customers coming back. 82% of satisfied consumers will recommend a positive delivery service to friends and family, while 55% said that a two-hour delivery option would make them more likely to stay loyal to a grocery provider. So it makes sense for retailers to invest in speedy options. 
  • Getting last-mile delivery right can make savings for brands, too - hitting on the sweet spot between what customers want and outgoings for retailers isn’t easy, but it can be done. And thankfully, it’s getting easier with the helping hand of third-party platforms, crowdshipping and innovative technology and robotics.

👎 The bad

  • There’s no getting around it: last-mile delivery is expensive, and speedy delivery even more so. Thanks to the innovations detailed above, costs are coming down, but retailers still have work to do to solve the cost inefficiencies of the last-mile problem
  • With the new fleet of ultrafast grocery delivery companies, supermarkets working on next-day delivery options could soon look pretty outdated. Pressure to be as fast as possible will only increase thanks to high consumer expectations and the ‘Amazon effect’. 
  • Some last-mile delivery platforms rely on gig economy workers as couriers, while crowdshipping platforms do so as a matter of course. 
  • There’s also the environmental problems associated with cities clogged with delivery drivers, though micro-fulfillment and drone delivery may provide answers here.

💡 The bottom line

  • The future of last-mile delivery is sure to be fascinating, as e-commerce groceries only look set to grow, even once the pandemic has fizzled out. 
  • Greater connectivity, data analytics, technology and hyperlocal options are likely outcomes. The last mile remains a conundrum, asking retailers to perform a difficult balancing act between consumer expectations and their own need to break even.

How did you like today's Trends?

Love it 😁 Meh 😐 Hate it 🙁

🍽️ What is it?

  • Tracking notification received, letting you know your groceries are en route, and all that’s left for you - the consumer - to do is clear the fridge shelves and get ready to unpack your shopping crates. For the retailer, however, it isn’t quite so simple. 
  • Far from it, in fact: the so-called ‘last mile’ of delivery is the final step of the transportation and delivery of goods to the end customer. It’s the stage at which the groceries finally land on the customer’s doorstep.

🤔 Tell me more…

  • You received said tracking notification at 9am, and your groceries still haven’t been delivered by lunchtime? That, in a nutshell, is the last-mile delivery problem encapsulated. 
  • The last leg of the delivery process is famously the most expensive and the most inefficient for retailers. In fact, last-mile costs typically account for over half of the overall cost of shipping. Then there’s inefficiencies like traffic and making several stops with low drop sizes to grapple with. 
  • That’s why the last-mile delivery sector is ripe for disruption - and many entrepreneurs have been taking on the challenge, launching a host of delivery platforms that offer new ways to tackle this age-old problem.

🤷 Why?

  • Thanks to the ‘Amazon effect’, consumers have high expectations when it comes to delivery. And that’s particularly amplified when it comes to fresh groceries. When you order eggs, milk and bread online, you don’t want it to arrive in two weeks - you want it now. Consumers are demanding faster, cheaper delivery, with in-depth tracking and rerouting options - and retailers and third-party delivery platforms are responding.
  • Knowing how important the last-mile experience is to consumers, retailers consider it wise to invest in more efficient and slicker services. Research shows that a quarter of shoppers are willing to pay more for improved delivery, and 55% will switch to another store if it offers faster delivery - grocery brands are hoping to capitalise on this.
  • The COVID-19 pandemic is also a major driver of the growth in last-mile grocery delivery. Many shoppers who had never bought groceries online before switched overnight due to restrictions and understandable feelings of fear about venturing to the store in person. UK figures suggest that the pandemic boosted demand for last-mile delivery, accelerating growth in the sector by five years in just nine months!
Source: Nuro

🔍 How is it shaping up?

  • The growth of e-commerce for groceries has had a positive impact on last-mile services. As more and more consumers have switched to ordering their food shop online, companies have had to adapt quickly, and third-party last-mile companies have sprung up in their droves. 
  • Smarter use of data analytics and high-tech solutions is helping to improve last-mile delivery experiences for consumers - and reducing the cost for retailers. Routific, for example, is a third-party delivery optimization software that brands can use to improve tracking and optimise routes. 
  • Many big players - like Walmart in the USA and Sainsbury’s in the UK - have launched their own super-speedy delivery services in the past year. Spark Delivery by Walmart and Chop Chop by Sainsbury’s are designed to compete with Amazon’s Prime Now delivery for groceries. 
  • Ultrafast home grocery delivery is another major way this trend is manifesting. Companies that promise doorstop fresh food delivery in 15 minutes or less are proliferating across Europe: from Cajoo in France, to Flink and Gorillas in Germany, to Dija and Jiffy in the UK. 
  • Many retailers are also choosing to use third-party delivery platforms to get the goods to the consumer’s door. This enables grocery stores to scale up their capability to meet online orders much faster than developing their own services, and is easier for investors to stomach.
  • Many of these third-party startups are focusing on micro-fulfillment - which has been referred to as the AirBnB of logistics. Micro-fulfillment centres are small warehouses, generally found in cities, which help to reduce the distance in the final mile of delivery by bringing goods closer to the consumers who buy them. Startups like Fabric, Genie Delivery and Vembla are working in this space. The pros of micro-fulfillment logistics include faster, more efficient delivery and lower emissions
  • In a similar story, some last-mile startups are focusing on ‘dark stores’ - ultra-rapid grocery delivery companies like Getir, Weezy and Zapp arrange fulfilment from small dark warehouses, which are located in residential areas. Such stores serve only one purpose: fulfilling online orders. Major food stores like Target and Kroger are experimenting with dark store usage to find the most efficient fulfillment model. 
  • Crowdsourced delivery platforms are also on the up as retailers take advantage of the gig economy and an option that’s usually fast and pretty simple, all things considered. The US’ Instacart is perhaps the most well-known of these delivery-as-a-service (DaaS) marketplaces, but keep an eye on Belgium’s Piggybee and Amazon Flex.
  • Lastly, technology-driven innovation in the last-mile delivery sector is really ramping up. Nuro and Starship Technologies have both developed autonomous delivery vehicles using robotics. Drone delivery is also another option grocery stores are exploring: companies such as Flytrex, Wing and Zipline are some of the major players in this area. UK supermarket Tesco has also trialled food delivery by drone. Speed and convenience are major advantages, but consumer acceptance and regulatory approval remain big hurdles to overcome.
View the database of 30+ Last Mile companies here

👀 Who? (27 companies in this space)

  • Amazon Flex (Amazon’s last-mile service, global)
  • Big Basket (doorstep grocery delivery, India)
  • Buymie (mobile first, on-demand grocery delivery platform, Ireland)
  • Cajoo (15-minute home grocery delivery, France)
  • Chop Chop by Sainsbury’s (60-minute grocery delivery, UK) 
  • Dija (ultrafast grocery delivery, UK)
  • Flink (10-minute delivery platform, Germany)
  • Flytrex (drone delivery, Israel)
  • FreshDirect (online fresh grocery platform with delivery, USA)
  • Genie Delivery (micro-fulfillment delivery platform, UK)
  • Getir (ultrafast delivery startup, Turkey)
  • Gorillas (delivery platform, Germany)
  • Instacart (doorstep grocery delivery platform, USA)
  • Jiffy (online supermarket with ultrafast delivery, UK)
  • Nuro (autonomous delivery robots, USA)
  • Ocado (online grocery website, fulfilment technology and last-mile routing management technology, UK)
  • Onfleet (last-mile delivery platform, USA)
  • Piggybee (crowdshipping, Belgium)
  • Routific (route optimization, USA)
  • Spark Delivery by Walmart (crowdsourced delivery platform, USA)
  • Starship Technologies (self-driving robots, USA/UK)
  • Stash (ultrafast grocery delivery, Switzerland) 
  • Vembla (last-mile grocery delivery, Sweden)
  • Weezy (on-demand online grocery ordering and delivery, UK)
  • Wing (drone deliveries, USA, Europe & Australia)
  • Zapp (ultrafast delivery, UK)
  • Zipline (drone delivery, USA)

📈 The figures

  • In the long-term online grocery delivery is expected to grow at an estimated CAGR of 29% between 2020 and 2024.
  • Since the start of the pandemic over $2 billion has been invested into vertically integrated, micro-convenience delivery startups. 

 

Source: Fabric

  📦 Case study: Fabric

  • Logistics platform Fabric is a startup focused on last-mile fulfilment. Founded in Israel, the company is now based in NYC, where it has several micro-fulfillment centres.
  • The startup has raised a total of $136 million in venture capitalist funding, following a $43 million Series A round in February this year. 
  • So how does it work? Fabric partners with brand retailers on last-mile distribution hubs, and has made its name out of repurposing disused chain stores, gyms and the like. 
  • Each Fabric hub (with an average square footage of 6k) can house about 15k SKUs and is equipped to handle about 500 orders a day. 
  • Same-day delivery direct from the fulfillment centres is made possible by gig-economy delivery partnerships. 
  • Formerly known as Commonsense Robotics, the company uses automation and AI-powered robotic arms to reduce manual picking cost and scale more efficiently.
  • One of Fabric’s largest clients is FreshDirect, a leading online fresh food grocer.
  • The startup’s future plans entail expanding its product offerings and accelerated onboarding for retailers.

🚚 Case study: Gophr

  • Gophr is a last-mile delivery provider based in the UK. The company bills itself as ‘a smart delivery company powered by better couriers’ and operates in 50 UK cities.
  • Founded in 2015, the startup has already fulfilled over 2 million same-day deliveries, for brands including HelloFresh, Selfridges and British supermarket chain The CoOp. 
  • The company is also the UK’s fastest-growing last-mile delivery service.
  • In February this year, it raised £4 million in funding to invest in its product off the back of 300% growth in its revenue over the past year.
  • This stunning growth has been powered by improved delivery performance at the courier level - thanks to enhanced data, better routing and incentives for couriers. This has helped Gophr grow rapidly and achieve net profitability
  • The CEO Seb Robert has emphasised the ‘people’ aspect of the last-mile delivery sector. So rather than focus on drones and autonomous vehicles, Gophr has invested in better couriers, which have been shown to lead to better delivery outcomes. 
  • Operational in most major UK cities, the startup can already boast 5,000 clients.
  • Gophr will use its latest investment to strengthen its core product with improved user design and customisation options for clients. Its aim is to become the smartest same-day delivery platform out there.

👍 The good

  • New trends in last-mile delivery are offering more choices to consumers, many of whom have turned to online grocery shopping in this difficult year. Extra ease and convenience is always a plus, and so innovative tracking and more efficient delivery services are likely to prove hits with shoppers.
  • Research has also shown that an awesome last-mile delivery experience helps to keep customers coming back. 82% of satisfied consumers will recommend a positive delivery service to friends and family, while 55% said that a two-hour delivery option would make them more likely to stay loyal to a grocery provider. So it makes sense for retailers to invest in speedy options. 
  • Getting last-mile delivery right can make savings for brands, too - hitting on the sweet spot between what customers want and outgoings for retailers isn’t easy, but it can be done. And thankfully, it’s getting easier with the helping hand of third-party platforms, crowdshipping and innovative technology and robotics.

👎 The bad

  • There’s no getting around it: last-mile delivery is expensive, and speedy delivery even more so. Thanks to the innovations detailed above, costs are coming down, but retailers still have work to do to solve the cost inefficiencies of the last-mile problem
  • With the new fleet of ultrafast grocery delivery companies, supermarkets working on next-day delivery options could soon look pretty outdated. Pressure to be as fast as possible will only increase thanks to high consumer expectations and the ‘Amazon effect’. 
  • Some last-mile delivery platforms rely on gig economy workers as couriers, while crowdshipping platforms do so as a matter of course. 
  • There’s also the environmental problems associated with cities clogged with delivery drivers, though micro-fulfillment and drone delivery may provide answers here.

💡 The bottom line

  • The future of last-mile delivery is sure to be fascinating, as e-commerce groceries only look set to grow, even once the pandemic has fizzled out. 
  • Greater connectivity, data analytics, technology and hyperlocal options are likely outcomes. The last mile remains a conundrum, asking retailers to perform a difficult balancing act between consumer expectations and their own need to break even.

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🍽️ What is it?

  • Tracking notification received, letting you know your groceries are en route, and all that’s left for you - the consumer - to do is clear the fridge shelves and get ready to unpack your shopping crates. For the retailer, however, it isn’t quite so simple. 
  • Far from it, in fact: the so-called ‘last mile’ of delivery is the final step of the transportation and delivery of goods to the end customer. It’s the stage at which the groceries finally land on the customer’s doorstep.

🤔 Tell me more…

  • You received said tracking notification at 9am, and your groceries still haven’t been delivered by lunchtime? That, in a nutshell, is the last-mile delivery problem encapsulated. 
  • The last leg of the delivery process is famously the most expensive and the most inefficient for retailers. In fact, last-mile costs typically account for over half of the overall cost of shipping. Then there’s inefficiencies like traffic and making several stops with low drop sizes to grapple with. 
  • That’s why the last-mile delivery sector is ripe for disruption - and many entrepreneurs have been taking on the challenge, launching a host of delivery platforms that offer new ways to tackle this age-old problem.

🤷 Why?

  • Thanks to the ‘Amazon effect’, consumers have high expectations when it comes to delivery. And that’s particularly amplified when it comes to fresh groceries. When you order eggs, milk and bread online, you don’t want it to arrive in two weeks - you want it now. Consumers are demanding faster, cheaper delivery, with in-depth tracking and rerouting options - and retailers and third-party delivery platforms are responding.
  • Knowing how important the last-mile experience is to consumers, retailers consider it wise to invest in more efficient and slicker services. Research shows that a quarter of shoppers are willing to pay more for improved delivery, and 55% will switch to another store if it offers faster delivery - grocery brands are hoping to capitalise on this.
  • The COVID-19 pandemic is also a major driver of the growth in last-mile grocery delivery. Many shoppers who had never bought groceries online before switched overnight due to restrictions and understandable feelings of fear about venturing to the store in person. UK figures suggest that the pandemic boosted demand for last-mile delivery, accelerating growth in the sector by five years in just nine months!
Source: Nuro

🔍 How is it shaping up?

  • The growth of e-commerce for groceries has had a positive impact on last-mile services. As more and more consumers have switched to ordering their food shop online, companies have had to adapt quickly, and third-party last-mile companies have sprung up in their droves. 
  • Smarter use of data analytics and high-tech solutions is helping to improve last-mile delivery experiences for consumers - and reducing the cost for retailers. Routific, for example, is a third-party delivery optimization software that brands can use to improve tracking and optimise routes. 
  • Many big players - like Walmart in the USA and Sainsbury’s in the UK - have launched their own super-speedy delivery services in the past year. Spark Delivery by Walmart and Chop Chop by Sainsbury’s are designed to compete with Amazon’s Prime Now delivery for groceries. 
  • Ultrafast home grocery delivery is another major way this trend is manifesting. Companies that promise doorstop fresh food delivery in 15 minutes or less are proliferating across Europe: from Cajoo in France, to Flink and Gorillas in Germany, to Dija and Jiffy in the UK. 
  • Many retailers are also choosing to use third-party delivery platforms to get the goods to the consumer’s door. This enables grocery stores to scale up their capability to meet online orders much faster than developing their own services, and is easier for investors to stomach.
  • Many of these third-party startups are focusing on micro-fulfillment - which has been referred to as the AirBnB of logistics. Micro-fulfillment centres are small warehouses, generally found in cities, which help to reduce the distance in the final mile of delivery by bringing goods closer to the consumers who buy them. Startups like Fabric, Genie Delivery and Vembla are working in this space. The pros of micro-fulfillment logistics include faster, more efficient delivery and lower emissions
  • In a similar story, some last-mile startups are focusing on ‘dark stores’ - ultra-rapid grocery delivery companies like Getir, Weezy and Zapp arrange fulfilment from small dark warehouses, which are located in residential areas. Such stores serve only one purpose: fulfilling online orders. Major food stores like Target and Kroger are experimenting with dark store usage to find the most efficient fulfillment model. 
  • Crowdsourced delivery platforms are also on the up as retailers take advantage of the gig economy and an option that’s usually fast and pretty simple, all things considered. The US’ Instacart is perhaps the most well-known of these delivery-as-a-service (DaaS) marketplaces, but keep an eye on Belgium’s Piggybee and Amazon Flex.
  • Lastly, technology-driven innovation in the last-mile delivery sector is really ramping up. Nuro and Starship Technologies have both developed autonomous delivery vehicles using robotics. Drone delivery is also another option grocery stores are exploring: companies such as Flytrex, Wing and Zipline are some of the major players in this area. UK supermarket Tesco has also trialled food delivery by drone. Speed and convenience are major advantages, but consumer acceptance and regulatory approval remain big hurdles to overcome.
View the database of 30+ Last Mile companies here

👀 Who? (27 companies in this space)

  • Amazon Flex (Amazon’s last-mile service, global)
  • Big Basket (doorstep grocery delivery, India)
  • Buymie (mobile first, on-demand grocery delivery platform, Ireland)
  • Cajoo (15-minute home grocery delivery, France)
  • Chop Chop by Sainsbury’s (60-minute grocery delivery, UK) 
  • Dija (ultrafast grocery delivery, UK)
  • Flink (10-minute delivery platform, Germany)
  • Flytrex (drone delivery, Israel)
  • FreshDirect (online fresh grocery platform with delivery, USA)
  • Genie Delivery (micro-fulfillment delivery platform, UK)
  • Getir (ultrafast delivery startup, Turkey)
  • Gorillas (delivery platform, Germany)
  • Instacart (doorstep grocery delivery platform, USA)
  • Jiffy (online supermarket with ultrafast delivery, UK)
  • Nuro (autonomous delivery robots, USA)
  • Ocado (online grocery website, fulfilment technology and last-mile routing management technology, UK)
  • Onfleet (last-mile delivery platform, USA)
  • Piggybee (crowdshipping, Belgium)
  • Routific (route optimization, USA)
  • Spark Delivery by Walmart (crowdsourced delivery platform, USA)
  • Starship Technologies (self-driving robots, USA/UK)
  • Stash (ultrafast grocery delivery, Switzerland) 
  • Vembla (last-mile grocery delivery, Sweden)
  • Weezy (on-demand online grocery ordering and delivery, UK)
  • Wing (drone deliveries, USA, Europe & Australia)
  • Zapp (ultrafast delivery, UK)
  • Zipline (drone delivery, USA)

📈 The figures

  • In the long-term online grocery delivery is expected to grow at an estimated CAGR of 29% between 2020 and 2024.
  • Since the start of the pandemic over $2 billion has been invested into vertically integrated, micro-convenience delivery startups. 

 

Source: Fabric

  📦 Case study: Fabric

  • Logistics platform Fabric is a startup focused on last-mile fulfilment. Founded in Israel, the company is now based in NYC, where it has several micro-fulfillment centres.
  • The startup has raised a total of $136 million in venture capitalist funding, following a $43 million Series A round in February this year. 
  • So how does it work? Fabric partners with brand retailers on last-mile distribution hubs, and has made its name out of repurposing disused chain stores, gyms and the like. 
  • Each Fabric hub (with an average square footage of 6k) can house about 15k SKUs and is equipped to handle about 500 orders a day. 
  • Same-day delivery direct from the fulfillment centres is made possible by gig-economy delivery partnerships. 
  • Formerly known as Commonsense Robotics, the company uses automation and AI-powered robotic arms to reduce manual picking cost and scale more efficiently.
  • One of Fabric’s largest clients is FreshDirect, a leading online fresh food grocer.
  • The startup’s future plans entail expanding its product offerings and accelerated onboarding for retailers.

🚚 Case study: Gophr

  • Gophr is a last-mile delivery provider based in the UK. The company bills itself as ‘a smart delivery company powered by better couriers’ and operates in 50 UK cities.
  • Founded in 2015, the startup has already fulfilled over 2 million same-day deliveries, for brands including HelloFresh, Selfridges and British supermarket chain The CoOp. 
  • The company is also the UK’s fastest-growing last-mile delivery service.
  • In February this year, it raised £4 million in funding to invest in its product off the back of 300% growth in its revenue over the past year.
  • This stunning growth has been powered by improved delivery performance at the courier level - thanks to enhanced data, better routing and incentives for couriers. This has helped Gophr grow rapidly and achieve net profitability
  • The CEO Seb Robert has emphasised the ‘people’ aspect of the last-mile delivery sector. So rather than focus on drones and autonomous vehicles, Gophr has invested in better couriers, which have been shown to lead to better delivery outcomes. 
  • Operational in most major UK cities, the startup can already boast 5,000 clients.
  • Gophr will use its latest investment to strengthen its core product with improved user design and customisation options for clients. Its aim is to become the smartest same-day delivery platform out there.

👍 The good

  • New trends in last-mile delivery are offering more choices to consumers, many of whom have turned to online grocery shopping in this difficult year. Extra ease and convenience is always a plus, and so innovative tracking and more efficient delivery services are likely to prove hits with shoppers.
  • Research has also shown that an awesome last-mile delivery experience helps to keep customers coming back. 82% of satisfied consumers will recommend a positive delivery service to friends and family, while 55% said that a two-hour delivery option would make them more likely to stay loyal to a grocery provider. So it makes sense for retailers to invest in speedy options. 
  • Getting last-mile delivery right can make savings for brands, too - hitting on the sweet spot between what customers want and outgoings for retailers isn’t easy, but it can be done. And thankfully, it’s getting easier with the helping hand of third-party platforms, crowdshipping and innovative technology and robotics.

👎 The bad

  • There’s no getting around it: last-mile delivery is expensive, and speedy delivery even more so. Thanks to the innovations detailed above, costs are coming down, but retailers still have work to do to solve the cost inefficiencies of the last-mile problem
  • With the new fleet of ultrafast grocery delivery companies, supermarkets working on next-day delivery options could soon look pretty outdated. Pressure to be as fast as possible will only increase thanks to high consumer expectations and the ‘Amazon effect’. 
  • Some last-mile delivery platforms rely on gig economy workers as couriers, while crowdshipping platforms do so as a matter of course. 
  • There’s also the environmental problems associated with cities clogged with delivery drivers, though micro-fulfillment and drone delivery may provide answers here.

💡 The bottom line

  • The future of last-mile delivery is sure to be fascinating, as e-commerce groceries only look set to grow, even once the pandemic has fizzled out. 
  • Greater connectivity, data analytics, technology and hyperlocal options are likely outcomes. The last mile remains a conundrum, asking retailers to perform a difficult balancing act between consumer expectations and their own need to break even.

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