Rising shipping costs combined with shoppers’ expectations of fast and free delivery are impacting retailers’ profitability. This Market Map looks at the companies helping retail leaders — like Walmart and American Eagle — optimize their last-mile operations.
The last mile is the most expensive leg of the supply chain, making up more than half of total shipping costs. Record high inflation, rising fuel costs, and a lasting labor shortage are now making it even more difficult for retailers to protect their margins while avoiding passing these costs onto consumers.
This is an even greater challenge as customers have grown accustomed to the free and fast shipping options used by the likes of Amazon, Walmart, and Alibaba to lure shoppers.
To stay competitive without sacrificing their margins, smaller retailers are turning to tech solutions that can improve delivery economics. These solutions help optimize various aspects of the last-mile journey whether retailers decide to outsource deliveries, invest in their own fleet, or strengthen omnichannel capabilities.
Using CB Insights data, we identified 218 last-mile tech companies addressing 12 technology priorities for retailers, from delivery management platforms to buy online, pick up in-store (BOPIS) enablement.