The evolution of last-mile delivery solutions as their own software category

by | Mar 12, 2021

Milkman is named as a Sample Vendor in the 2020 Gartner “How to Select the TMS, Provider and Solution Best Suited for Your Strategic Capabilities” report1.

In its report How to Select the TMS, Provider and Solution Best Suited for Your Strategic Capabilities, Gartner describes twelve different Transportation Management Systems  categories. Milkman has the honor of being listed as a sample vendor under the Last-Mile Delivery Solutions. The fact this has become a category by itself tells us a lot about the current center-stage position occupied by the last-mile inside the wider logistics panorama. This was abundantly clear even before the historic boost propelled by the tragic pandemic that has defined so much of 2020 (and, sadly, will define 2021 too). As argued by Doug Stephens, founder of Retail Prophet: “E-commerce will rapidly reshape the entire economic model of retail, spelling the end of wholesale”. 

Digital adoption throughout Europe has risen an average of 10% vs 2019, with spikes of 28% (Germany). Online sales of grocery and apparel jumping forward by 22% and 16% respectively. This makes delivery not only an integral part of the eCommerce process but the single most pressing preoccupation for Shippers. A preoccupation with very solid foundations, as many Systems showed their weaknesses under pressure: mainly the inability to carry the Brand’s values to the customers’ doors and to scale conveniently by dynamically driving customer behavior, thus optimizing fleet saturation.  

Let’s read how the analysts describe Last-Mile Delivery Solutions:

“VRS applications traditionally were used to route shipments from warehouses to distribution centers or stores, and less so to the end consumer. However, there is a continuous increase in e-commerce operations and a number of organizations, especially in retail and the food industry, are changing their business models to better serve business-to-consumer (B2C) transactions. This increase has fueled the need for routing applications that specialize in last-mile operations, which we call last-mile delivery solutions. Although last-mile-focused VRS solutions share many features with the more traditional VRS applications, at least two focused areas make them different:

Increased focus on customer experience — Last-mile-focused solutions allow for the collection of end customer feedback to run analysis that helps improve service levels or provide further convenience to select a more specific delivery window.Whether it is the performance of a specific driver on timeliness, customer care or how parcels are handled, the data received in feedback forms can provide insights as to where services can be improved.

Capabilities to manage more diversified fleets and routing options — These solutions are capable of considering different types of fleets, such as crowdsourced fleets, delivery robots or drones. Additionally, they cover other delivery methods that consider technicians or other services for the preparation of the route or other capabilities, such as parking locations or building entrances.” 

Once TMS were a means to provide visibility and optimization over working fleets. Their natural evolution has added an increased need to maximize control and extend it to the recipient. Gartner’s note calls it an “increased focus on customer experience”, but we don’t have to indulge for a second in the illusory passiveness of the word “experience”. In modern Retail, experience is something customers want to actively participate in. That is why Milkman focused from the beginning on providing new levels of communication and choice to e-shoppers. As reported on Forbes and Entrepreneur, our company was literally built around the end-user, reversing the old adagio that sees the recipients as “victims” of logistical needs. 

This mindset has lead us to believe that to better serve customers in 2021, online retailers should:  

  1. Integrate the logistics and sales processes 
  2. Give the customer more choice and control
  3. Communicate effectively from purchase to delivery
  4. Better serve returning-customers by learning their logistics preferences and needs
  5. Bring their brand experience to the last-mile

The E-Commerce boom led to the evolution of the last-mile delivery solution category, focusing on customer experience supported by more sophisticated delivery execution models. At Milkman, we sum it in one word: CHOICE. A dynamic set of delivery options that let the customer choose the optimal balance between convenience and cost.

This choice is subtly guided and then executed using a data-driven approach to an ever growing complex last mile delivery network.

1 Gartner, How to Select the TMS, Provider and Solution Best Suited for Your Strategic Capabilities, Bart De Muynck, et al., 16 November 2020. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation.Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

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