Gettin’ Giggy With It
The gig economy’s impact on last-mile delivery and fulfillment expectations has not gone unnoticed by the retail and e-commerce behemoths. Acknowledging that impact, investment activity is spinning up this year.
It seems odd but, despite finely tuned distribution systems, e-commerce leaders now feel they have to add to their “legacy” fulfillment infrastructure, technology, and expertise with last-mile buildouts designed to be 2023-competitive.
How? By building out the concept of Fulfillment-as-a-Service (FaaS) as a brand enhancement for their current and future vendors, in the hopes of blunting more share gains by small and mid-sized sellers.
Last-mile guaranteed delivery windows offered by a growing group of gig final-mile solutions providers are empowering a pool of newer and smaller e-commerce companies, offering them the ability to side-step existing excellent Amazonian and Walmartian delivery expertise.
A Prime example of this trend is the Shopify and Flexport/Deliverr mash-up with its hopes of a solid offering of guaranteed delivery windows, usually within two days.
Beyond mashups, segment leaders are slapping on more than add-ons. Sam’s Club recently announced a weighty five-year buildout plan to expand and add 16 e-commerce fulfillment centers. Why? You guessed it—to compete with Amazon and expected delivery experience changes wrought and brought by new e-commerce sellers using fast, cheaper gig delivery services.
Low-cost delivery tracking technology and delivery performance metrics à la Uber, combined with dramatic shifts in consumer buying habits and young consumer culture, also drive this investment. SMB retailers and e-commerce companies have nailed down the click-to-sale. But meeting new age consumer delivery expectations without breaking the final-mile bank is crucial.
Even large e-commerce companies like Chinese-owned Temu are concerned with doorstep performance. Temu is currently offering a $5 bounty on any missed delivery window in the States. All this concern partially explains the growth of gig and gig hybrid final-mile delivery solutions such as Uber and new entrants like AxleHire and DutchX.
For the e-commerce giants—Walmart, Amazon, Shopify, Temu—there’s more than money to be made. They plan to grow their market share if they can stave off all the second-tier e-commerce companies and the hordes of new gig-delivery empowered entrants using ultra-fast delivery as a brand builder with vendors and customers. That’s why everyone is gettin’ Giggy with it.