When it comes to last-mile fulfillment, retailers can:
- Use dedicated logistics companies such as FedEx or UPS
- Partner with delivery platforms like Instacart or Shipt
- Build out their own fulfillment capabilities
With the first two options, retailers are essentially at the mercy of other companies to fulfill orders as quickly as possible.
- The early days of the pandemic laid bare the perils of such an approach, as the surge in ecommerce orders quickly overloaded companies’ delivery capabilities.
- While shipping companies have largely been able to adjust to meet demand, retailers are increasingly focused on building out their own fulfillment networks.
- However, same-day delivery is expensive to execute—which is why many retailers are opting to rely on delivery platforms’ existing infrastructure for now.
Walmart leads the way: Over the past year, Walmart has adopted numerous tactics to increase delivery speeds and efficiency as it aims to win back market share from Amazon.
- Walmart has leveraged its enormous retail footprint as part of its supply chain, enabling it to expand its pickup and delivery capacity by 20% in 2021.
- Within its brick-and-mortar locations, the company has set up Market Fulfillment Centers (MFCs), which allow Walmart to execute orders without affecting store operations, speeding up the time between purchase and delivery.
- Walmart is also in the process of expanding its InHome service, which delivers items directly into people’s homes, to reach 30 million households in 2022.