The “Golden Last Mile of Consumer Goods” is the final distance a consumer good has to travel before reaching the consumer household.
Traditionally, this has been served by the local independent store, supermarkets and with the advent of online commerce - household deliveries. Online commerce continues to be the fastest growing sector in the UK retail sector. The Centre for Retail Research estimates that between 2012 and 2022, the share of online commerce as a percentage of retail sales has almost tripled from 10.6% to 26.5% - with mobile commerce accounting for half of this.
Traditional wholesalers / distributors have not significantly embraced online commerce.
A few wholesalers / distributors in the UK have begun to make the shift towards Online Commerce by providing online B2B e-Commerce capabilities for their independent retail clients, some include the ability for retailers to order with delivery. In addition they help them with a core set of wholesaling services, such as store fitting, merchandising, promotions and credit services.
Local independent retail stores gain minimum value from B2C commerce
It has been native online B2C eCommerce platform businesses that have led the charge of providing online services. They have provided new revenue streams for consumer goods suppliers, as well as becoming a long-term threat to traditional retailers. Think of the case of Amazon books and how they dominated the sector to such an extent that they ended up decimating the traditional book shop concept.
Larger traditional retail chains have transformed to clicks and mortar service providers – including in the grocery and consumer goods sector. These ecommerce businesses were simple at first but have evolved to provide a wide range of different services ranging from online purchase and delivery, click and collect, parcel locker, parcel pickup and fast commerce.
What is notable about click and collect, parcel locker, parcel pickup and fast commerce is that they all lend themselves to the need for a local store. Many large (non-traditional retail players) online providers have started to use the local corner shop as pick-up points, or locations for their parcel pickup. They utilize the local corner shop’s physical assets for their benefit – providing minimal value to the local corner shops retail business.
Innovative startups, such as Zapp and GoPuff, have realized the value and benefit of the Golden last Mile. They are building new innovative Quick Commerce business models aimed at delivering products within 30 minutes in certain cities or location. They utilise local sites (not necessarily local retail stores) to act as local small distribution centres, called mini-marts or dark sites.
An additional benefit of utilizing local independent stores for pick-up and pick-up locker services, is the environmental benefits of reducing commercial van mileage for local deliveries. The Centre for London estimates that home deliveries resulted in 100 million kg of CO2 emissions in London during 2020-2021.
Independent Local Retailers need an online commerce champion – the traditional wholesaler
The challenge for the local independent retailer is that they do not have the capability or the funds with which to build their own digital capabilities, let alone setup and run a location based last mile service.
What they need is a player who can assist them in realizing the benefits of the Golden last Mile that they collectively represent, with their interests in mind. That player has to be the traditional wholesaler / distributor.
The Local Independent Retailers are a core asset of wholesalers, that they should use to ensure the sustainability of their business.
The benefits for the wholesaler of enabling Local Independent Retailers includes:
· ability to engage with the consumer household and develop long-term data relationships (alongside their Local Independent Retailer partners);
· drive new delivery and pick up service revenue;
· drive revenue from non-traditional consumer goods categories, such as clothing and electronic devices and
· a defense against larger players attacking their core business.
Wholesalers should consider providing their independent retailer customers, e-Commerce platform enablement services, including:
· Click and Collect
· Parcel pick-up
· Parcel locker
· Fast commerce – providing environmentally last mile of walking, cycling and driving by car.
These services would not only help wholesalers assist their customers to drive new revenue through online channels – enjoying the growth that comes with e-Commerce, but also benefit from the data insights doing so would provide.
Data insights, would in turn lead to development of trialing and fine tuning new innovations in merchandising of new categories, promotions using digital media such as social commerce and live commerce. Driving new business for both the independent retailers and for themselves – fully realizing the opportunity of the Golden Last Mile!
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