The new year is around the corner, and it’s time to reexamine last year’s outlook and prepare for 2023. Last-mile delivery has rapidly changed this past year with no signs of slowing down.
Last year’s outlook focused heavily on the booming meal kit and fitness industries.
These industries saw success thanks to a cultural shift towards health-conscious consumerism. This shift pushed last-mile delivery to new heights as online ordering grew. Here’s a quick recap of our 2022 predictions:
Where is the meal kit industry headed?
In 2022, the meal kit industry saw a 20% growth rate and a jump to $13.5 billion market value. Many consumers opted for meal kits due to a desire to minimize food waste, encourage sustainable packaging, and lower carbon emissions.
Another benefit of meal kits is the to-your-door delivery. These companies promised to help you ditch the grocery store altogether and receive fresh, pre-portioned meals right to your home.
While there are many draws to subscribing to a meal kit service, professionals admit that the growth has not come easy.
Gary Gebenlian, a specialist in business growth, points to building new partnerships: “Consolidation is likely, but I would think of it not just as consolidation of a meal kit, but partnership or consolidation with delivery or other means,” Gebenlian said.
Part of the struggle for meal kit services is establishing effective delivery, and companies are partnering with delivery services to make their delivery as seamless as possible.
Despite this challenge, the industry is still on track to reach $17 billion by 2028.
Is the spike in at-home workouts here to stay?
If you can work from home now, why not work out from home too?
The at-home lifestyle accelerated the in-home fitness industry by almost 10% in 2022.
Virtual workouts, fitness apps, and VR fitness gear suggest the at-home workout trend will continue to flourish. A survey from earlier this year revealed that 47% of Australians continued to work out from home after restrictions were lifted.
Fitness equipment companies are continuing to partner with delivery providers to ensure that delivery is consistent with today’s consumer expectations.
NordicTrack, a popular in-home fitness brand, cites delivery as the “final touchpoint” with the customer. The company partnered with Ryder Last Mile to ensure in-home delivery, assembly, and set-up of their equipment.
To remain competitive, industry leaders like Peloton are shifting to third-party delivery services. Peloton announced a partnership with XPO earlier this year, stating that this would drive efficiency and increase cash flow. This decision comes with the reality that high-ticket items were not a priority for many consumers during 2022’s record-high inflation.
Let’s get to trends for 2023
Last-mile delivery remains a priority in 2023. Delivery has the greatest impact on brand reputation and the consumer’s experience.
Delivering directly to your consumer is the surest way to provide a quality experience, but it does not come easily. Logistics and distribution are among the many concerns retailers face when building their last-mile delivery networks.
Retailer investments in the supply chain: A race to streamlined delivery
In an effort to stay competitive, 75% of retailers are pushing toward establishing their fleets to meet the two-day delivery window.
Businesses such as Walmart are investing in omnichannel distribution, having their stores double as distribution centers and warehouses. Walmart has even gone so far as to build its own last-mile delivery fleet known as GoLocal.
Grocery isn’t the only sector expanding to the supply chain industry. Clothing retailer Gap has created a logistics and fulfillment service called GPS. The company promises to offer next-day and two-day shipping to its customers, along with short-term storage, returns, and processing.
American Eagle also launched a delivery network known as Quiet Platforms last September. It has already seen success, with 75% of online orders reaching customers in three days.
Partnerships are also furthering success and innovation in the supply chain space. American Eagle’s network provides consumer visibility via its partnership with FourtKites, a supply chain data company. Fleet partnerships are also important because they allow businesses to keep up with demand without the overhead costs of owning a vehicle.
Retailers’ participation in the supply chain industry will expand in 2023, despite the disruptions in the past few years.
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