KEY POINTS

  • Logistics companies and their retail partners are in a race to meet consumers’ growing demand for speedy fulfillment, as the rise of e-commerce pushes them to deliver more parcels than ever before. These firms are exploring new models and technologies to win this battle and stave off the threat from Amazon, which has made a name for itself as a fast-delivery provider. 
  • The "last mile" of delivery — when the package reaches a customer's doorstep — is the most expensive and time-consuming part of the delivery process, and retailers are especially looking for ways to improve this area of their fulfillment operations.
  • Crowdsourced delivery startups can help retailers deliver goods within hours — even minutes in some cases — within urban settings. They leverage local, nonprofessional couriers who use their own vehicles to make deliveries, either on-demand or during a scheduled time window. Many such startups have sprung up around the world, and have collectively attracted several billion dollars in investment.
  • By utilizing nonprofessional couriers and sophisticated back-end technology platforms to manage and track deliveries, these delivery startups allow businesses to quickly get up and running with same-day delivery in urban markets. Crowdsourced delivery is most common in meal and grocery delivery, but a growing number of traditional retailers are using the model to ship online orders from nearby stores, malls, and warehouses.
  • However, as these startups' delivery volumes increase, they will need to wrestle with significant inefficiencies in their business models. This will include making operational changes and employing greater use of data and analytics to optimize efficiency and lower per-delivery costs. 
  • Many of the deliveries these startups perform today will likely be automated in the future. That raises the possibility that crowdsourced delivery startups may shift away from human couriers eventually, and incorporate automated delivery options with autonomous delivery vehicles, or robots, managed remotely through their platforms.

Introduction

As the steady rise of e-commerce pushes logistics companies and their retail partners to deliver more parcels, faster, speedy delivery is becoming a major competitive advantage. And no company has capitalized on this opening like Amazon, which has made a name for itself in fulfillment with its Prime and Prime Now delivery offerings. Now, Amazon’s retail competitors — and their logistics partners — are exploring new models and technologies in a race to meet consumers’ growing demand for faster delivery. Crowdsourced delivery is one model gaining popularity — it leverages local, nonprofessional couriers to get packages to customers’ doors, sometimes in less than [...]