Delivery Services Evolve as Ecommerce Innovates

The rising levels of both, customer expectations and ecommerce innovation during COVID-19 are resulting in rising costs and complexity when it comes to final mile delivery. In order to remain competitive in this time of rapid change, retailers and delivery services are rethinking their distribution networks, implementing innovative delivery strategies, and expanding their use of technology.

Last week, DoorDash announced a pilot program with Walgreens to deliver over-the-counter medications and essential products, and will begin testing the program in the Chicago, Denver and Atlanta areas. The company noted in the announcement that Walgreens is the latest addition to its “convenience space” list of chains, which includes 7-Eleven, WaWa, Casey’s, and CVS Pharmacy. By the end of summer 2020, Walgreens and DoorDash plan to offer more than 5,000 items for delivery on the DoorDash platform and will expand the service to other major markets including Cincinnati, Cleveland, Minneapolis, Oklahoma City, Phoenix, Sacramento, and Seattle.

The final mile has become a competitive differentiator and an opportunity for retailers to build customer loyalty and drive future sales. The greatest challenge, however, is controlling the surging costs associated with providing next-day, same-day, and even same-hour home delivery like Amazon offers.

Last month, Mercari announced it would launch a similar program to differentiate itself in the resale space by offering same-day delivery by partnering with Postmates. The two-hour delivery service rolled out in San Francisco, allowing sellers to accept local orders without packing and dropping off packages at a local U.S. post office. The latest iteration of the program is another attempt at gaining grounds in the retail logistics space, which began last November when Postmates introduced integration for Shopify merchants for the Holidays. The same-city delivery of apparel and accessories has attracted other retailers like Old Navy, as well as H&M and Lululemon in select cities.

In a world that expects next-day and same-day delivery, consumers want to have full control of when, where, and how they receive their packages; they expect transparency as the product is in transit, and they want the ability to interact and intervene during the delivery process with more detailed delivery instructions. To meet those expectations, businesses must provide an expanded menu of delivery options, such as same-day delivery, click and collect, curbside pickup, and delivery to storage lockers. Businesses must innovate and adapt to survive in today’s world of digital commerce.

As ecommerce continues to rewrite the playbook for just about every business, delivery services are adapting and innovating in new and different ways, responding to demands from evolving online marketplaces, emerging businesses, traditional retailers, and consumers who want an Amazon- and Uber-like experience when buying and receiving goods.