When it comes to shipping and delivery, consumers have a need for speed.

There is no question that Amazon has dominated the e-commerce industry over the last few years with its faster and faster shipping speeds. But how are other contenders–mainly big box retailers–keeping up? The answer is shifting fulfillment towards last-mile delivery

We’re now seeing big box retailers (Target, Walmart, Home Depot and others) taking action to improve their own last mile strategy. Starting with leveraging brick-and-mortar spaces for same-day pickup. For example, during the pandemic lockdown, Target was still able to fill 95% of their sales in-store thanks to their online same-day pickup and drive up strategy. The benefits of same-day pick up is it gives customers the luxury of shopping from home (online), but still getting the instant gratification they would get from in-store.

Some big box retailers have recognized the long-term benefits of having their own last-mile delivery operations by acquiring more real estate to turn into fulfillment centers and building an internal delivery fleet. 

According to a recent report from CBRE, nearly 14 million square feet of big-box retail space in the U.S. has been converted to industrial space. By converting big-box retail space into warehouse space retailers have the ability to store products closer to customers, which drastically reduces the shipping time and costs. 

Fully automated delivery may currently seem like science fiction, but it’s not as far off as we think! Many retailers are already considering autonomous last-mile delivery to retain a more typical last-mile infrastructure while lowering personnel costs. For instance, Walmart has partnered with Ford in a pilot program that uses autonomous vehicles to deliver purchases directly from stores. The two companies will test out the concept as part of an existing grocery-delivery partnership between Postmates and Walmart.

In summary, many big-box retailers are beginning to close the competitive gap by converting to last-mile delivery. In addition, small and medium-size businesses can benefit from the last-mile delivery by investing in their own customer experience and operations.

What do you think about these strategies? Comment down below. We would love to hear from you!

Until next time,

Brian + Ben

Monarch CRE

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