As online shopping continues its upward trajectory, the industries that play a key role in supporting its operation, including last-mile logistics, are evolving to better serve new and heightened demands. The recent boom in online shopping ignited by the COVID-19 pandemic has forced last-mile logistics companies to adopt a number of new innovations in order to keep up with evolving consumer expectations.
Generally, the recent changes in last-mile logistics seek to achieve new levels of efficiency. E-commerce sales, which are a major contributor to last-mile demands, are expected to increase from the $4.98 trillion recorded in 2021 to nearly $8 trillion by 2027. To keep up with the pace of online shopping’s growth, last-mile logistics providers have had to find ways to increase the speed of delivery without increasing costs.
However, greater efficiency is not the only way online shopping impacts last-mile logistics. Online shoppers are also looking for a higher quality of service that considers societal as well as personal needs.
Here are some specifics on the ways in which online shopping is shaping the future of logistics.
Volume demands require new levels of efficiency
While greater efficiency is a core concern for today’s last-mile logistics companies, it is not the only one. Strategies for managing higher volumes of delivery are not the only efficiency considerations because consumers also want their deliveries faster, with same-day delivery becoming the norm.
A recent survey of UK-based consumers found that 86 percent of online shoppers rated same-day delivery as important. Among Gen Z shoppers, 98 percent prioritized same-day delivery, with 69 percent of that group saying they would pay a premium to receive it.
More than half of the consumers polled in the UK study also indicated they would be more likely to buy from companies that could guarantee next-day delivery within a 60-minute time slot. Consumers don’t just want speed — they want customization and delivery capabilities designed to meet their unique needs.
Automation is one key to meeting these heightened demands. The more logistics companies can rely on automated systems to move orders through the pipeline, the more streamlined their processes will be.
Leveraging APIs to directly connect online shops with logistics fulfillment systems is one step that has significantly improved efficiency. APIs ensure seamless communication so that logistics companies get the information they need in the format they need when they need it.
AI-driven tools also offer great potential for increasing efficiency. Artificial intelligence has streamlined a wide variety of tasks, from customer service to route optimization to precision staffing. When leveraged for advanced data analytics, AI-driven tools can identify new opportunities to refine and enhance logistics systems, identifying the emergence of new trends in ordering, delivery routes, and other major operational elements.
Consumers demand new levels of sustainability
While the new standard for online shopping is quick delivery, sustainability has emerged as the one thing consumers are willing to wait for. According to a 2023 study by logistics software vendor Sifted, nearly 80 percent of consumers are willing to wait an extra day for products if they are shipped in more sustainable ways. In addition, 76 percent of those surveyed said they would pay an extra 5 percent for more sustainable shipping.
Investing in eco-friendly transportation is one of the obvious steps last-mile logistics companies can take to meet consumer demands for greater sustainability. Electric vehicles can meet that need for last-mile logistics in short-haul deliveries, and hybrid vehicles can improve conventional delivery methods for longer delivery routes.
Autonomous vehicles are an emerging technology that is helping last-mile logistics be more sustainable. They are typically electric, cutting down on fuel use and emissions, and tend to be smaller, which allows them to reduce traffic congestion by using bike paths, sidewalks, and other alternative routes.
Subscription services require new levels of organization
Subscription purchasing is a growing trend in online shopping that provides consumers with the option of setting up automated reorders. Amazon, for example, provides this service for groceries and even offers discounts to subscription shoppers. Petco is another company that offers subscription shopping with discounts for what it calls repeat delivery.
The growth of subscription services benefits last-mile logistics companies by providing greater predictability. When companies know orders are subscription-based and the details of the subscriptions, they can better predict delivery volumes.
However, gaining those insights requires developing systems that identify subscription-based orders and project their impact into the future. The growth of subscription sales adds to the complexity of last-mile logistics, forcing new levels of sophistication in logistics administration.
Trends in online shopping have a strong influence on the last-mile logistics industry, creating new demands that often require innovative solutions. The most recent shifts in online shopping are reshaping the last-mile logistics space, creating an industry that is more efficient, sustainable, and attuned to shoppers’ unique needs.