How Last Mile Services Can Keep up With Post-Pandemic Demand
Leadership | Massimo Marsili, Managing Director, Transport – Iberia | July 6, 2020
Demand for last mile services shows no sign of slowing
The Spanish e-commerce market was already experiencing solid growth well before the COVID-19 pandemic hit. In fact, the country’s e-commerce boom was one of the driving forces behind XPO’s decision to launch its nationwide last mile service in 2018. Throughout 2019, we were making an estimated 1,500 last mile deliveries a day. At the peak of the pandemic, that tripled almost overnight to around 4,500 deliveries a day.
For months, consumers had no choice but to order online. Employees working from home for the first time were faced with an urgent need for office furniture. People with more leisure time turned to renovation projects to fill the hours at home. And now that summer has arrived, consumers are purchasing more garden furniture. With the easing of restrictions, some people have started visiting brick-and-mortar shops again. However, there are many signs that a large number of Spaniards will continue to shop online, and we know last mile services are still in great demand across the country, from Madrid and Barcelona to Levante and Andalucía.
Flexibility and scale of operations are key
In Spain, XPO provides a consistent service level of home deliveries across the entire country due to our network of 60 distribution sites linked by industry-leading technology. We are set up to handle, distribute, assemble and install furniture, appliances and other bulky goods for consumers regardless of where they live. No other logistics provider in Spain has the capability to leverage so many sites across the country for last mile services. We also rely on data insights into today’s consumers. We know they want goods delivered quickly and we must respond quickly. To cope with peaks during the pandemic, we expanded our delivery fleet by 40%. We also gained new customers during the lockdown, including a large, well-known electronics retailer, because of our capabilities in this space. Flexibility is one of our key strengths.
Prioritizing the consumer experience
At XPO, we have developed software applications specifically for the last mile consumer experience. When someone buys a refrigerator, exercise bike or other large product, they can track their order in real time, set personalized alerts and reschedule deliveries electronically. During the pandemic, we digitized this experience even further by introducing WhatsApp messaging for direct-to-consumer communication and scheduling. In fact, we are the first logistics provider in Spain to do so.
In line with our commitment to make our deliveries as safe as possible, we also introduced cutting-edge technology called ‘contactless delivery’, which allows consumers to sign the Proof of Delivery (POD) from their own device. In addition, our software engineers have been constantly updating our technology and online capabilities to optimise routes for delivery.
Consistently high customer satisfaction is proof that XPO’s significant annual investment in innovation is driving benefits throughout the retail supply chain. The calibre of our technology is a major reason why so many retailers, e-commerce companies and manufacturers use XPO for last mile. That, and our broad expertise in delivering heavy goods, including appliances, furniture, home electronics, DIY products, large appliances, mattresses and fitness equipment.
Positive signs for Spain’s post-pandemic e-commerce market
Multiple surveys show that large numbers of consumers will continue to shop online. Online marketplaces are flourishing and retailers who either hadn’t operated online or had a very limited online offering before the crisis had to adapt to a more digitized way of doing business. Revenue across the e-commerce market in Spain, including fashion, electronics, toys, hobby, DIY, furniture and appliances, and food and personal care, is expected to show double-digit growth for at least the next two years.
A sizeable portion of that growth is expected to come from the sale of bulky goods. Some leading Spanish retailers in these sectors are accelerating digitization of their businesses by increasing their investment in IT and warehousing, as well as by launching new delivery and home installation offerings. All of these shifts present a valuable opportunity for supply chain partners who have robust and reliable last mile services in place.
As the pandemic continues to play out, last mile service providers are under pressure to act quickly, but they can also benefit greatly from the changes ahead. At XPO, we are constantly exploring new ways to provide home delivery services in a progressive and sustainable way for our customers and their consumers.