2020 was a year we will not easily forget. As people adapted to a new normal around the world, meeting the daily need for groceries presented new challenges. The shift to online channels for grocery shopping was embraced successfully by some retailers, while others struggled to respond.
This rapid growth in online channels forces companies to act, and potentially to act faster than they are used to. Especially when investment decisions are to be made, how do they make sure that the underlying business case is reliable and robust?
In this point of view, we introduce four levers that help define the targeted value proposition for the last mile. These levers are reliability, responsiveness, sustainability, and digital. Finding the optimum will vary retailer by retailer, but it always has to be connected to brand image and market strategy.
We know that it is very difficult to make online grocery retail profitable. For this reason, it is key to have profound insights into the composition of last-mile delivery costs.
Capgemini has a last-mile cost model in which new setups can be modeled. The model describes key processes and underlying cost drivers. In the point of view, two illustrative network scenarios are described.
Ultimately, it is the trade-off between customer value, business levers, and cost that drives the last-mile agenda.
We look forward to further collaboration to bring the last mile to a new level.