Logistics have become vital to the success of any business that sells its products and services online. In Latin America, the ability to make quick and on-time deliveries—especially outside of major urban centers—often proved to be a quite complex task due to large swaths of unpaved roads and underdeveloped infrastructure in many countries.

The logistics space has changed quite a bit in the nearly two decades that Brie Carere has worked at FedEx, thanks in large part to ecommerce.

In addition to see a boost in new customers in the past few months, FreshDirect also saw a surge of orders coming in from existing customers who moved away from the city. And as a result, the company expanded its delivery services in Westchester, Connecticut and Long Island to meet demand in these areas.

Last-mile delivery hiccups can spoil an otherwise good experience

Is removing humans from the 'last mile' the future of delivery?

For digital sales, delivery might not seem as important as a product itself, but many shoppers judge a retailer on its last-mile capabilities. Loyalty can be made or broken based on cost, speed and accuracy of shipping.

Even third-party logistics providers like FedEx and UPS have had to scale their shipping and last-mile delivery capacity to accommodate Amazon, a key retail partner but also a competitor for delivery services. The result is a more streamlined nationwide delivery apparatus for ecommerce orders that’s both faster and more timely.

Food delivery apps like Uber Eats, DoorDash, and SkipTheDishes—a Winnipeg-based homegrown competitor to the US-based services—had already established a foothold before the pandemic. The greater need for delivery last year elevated their influence in food service, even though the fees they charge have raised concerns in the restaurant industry and for regulators.

But Amazon has hardly rested on its laurels as a best-in-class provider of fast and free delivery; instead, it’s doubled down by investing in fulfillment centers and last-mile delivery to turn free two-day shipping for Prime members into free next-day shipping.

This past holiday season had fewer challenges in this regard: expanded capacity by the logistics providers, Amazon’s added capacity for last-mile deliveries, and no late-season weather events. “This was also the first year where FedEx made Saturday and Sunday standard delivery days for the holiday season,” Jindel added.

Consumers have been conditioned to expect fast delivery of online orders, but the pandemic has flashed a spotlight on how strained supply chains can get—even among savvy retailers like Amazon, which heavily focused its business on expedited shipping.

Similarly, online food sales surged 183% between March 1 and 25 vs. the same period last year, per NetElixir. Late March data from Business Insider Intelligence revealed that more than half (54.3%) of US adults spent more on online grocery shopping while quarantined.

The dominant theme of the 2019 online holiday shopping season is the shortened calendar, and its effects are felt most acutely among logistics providers—particularly for last-mile delivery.

A month later, Walmart announced its own plans to provide next-day delivery to the majority of its customers by year-end. Soon thereafter, Target rolled out same-day delivery for $9.99 (or free for existing members of Shipt, Target’s last-mile delivery service).

Frictionless commerce, a trend permeating many facets of the customer journey today, leverages technology to improve the retail experience by saving people time and hassle. And arguably the most competitive battleground in frictionless commerce is in fast and free ecommerce delivery.

Meanwhile, for retailers, click-and-collect eliminates the need to manage last-mile logistics, which becomes even trickier when perishable goods are thrown into the mix. That's no small feat, given that last-mile delivery can account for a substantial portion of overall delivery costs.

Retailers across Western Europe are pioneering the use of AI to boost digital sales, and new options for delivery and returns are emerging. Yet Europe’s main markets have been slow to embrace social commerce.

“Sharp, unexpected growth in demand for Amazon is resulting in tough choices of how to manage the supply of in-bound products and available last-mile delivery capacity.”. This may result in new categories and product line extensions. “Companies like Clorox have an opportunity to create new products post-virus,” Scrum 50’s Thomson said.

In the US and elsewhere, a growing list of companies, including Amazon, UPS, Alphabet, Domino’s Pizza and Walmart, are already testing drones to help cut last-mile delivery costs for products like retail items, medicines and fast food.

With more logistic facilities opening up throughout the US—and retailers doing a better job of communicating with customers about delivery options—most deliveries managed to meet holiday deadlines and satisfy consumer expectations.

Walmart’s expansion of Delivery Unlimited, its grocery delivery membership, is the latest attempt by a major retailer to make online grocery shopping more appealing. But better delivery value only addresses cost—not quality.