Last-Mile Fulfillment Has Staying Power

By Pat Pape

ALEXANDRIA, Va.—Although stores and businesses are reopening, consumers continue to rely on e-commerce to fulfill their shopping needs, and that practice is expected to get even bigger in the future.

Global last-mile delivery—getting products from their source into the hands of consumers—will grow with a CAGR of 7.6% by 2026, according to Lori Stillman, vice president of research, NACS, who introduced the panel discussion, “Last Mile: How Future Fulfillment Models Will Impact Convenience,” at the 2021 NACS Convenience Summit Europe. Panelists included Viviane Athar of AmPm in Brazil and Brian Donaldson of the Maxol Group in Ireland.

According to Stillman, the NACS study, “Last Mile Fulfillment in Convenience Retail,” found that 57% of convenience retailers offer some form of last-mile delivery, with European and Australian operators outpacing U.S. c-stores by more than 50%. While third-party platforms, such as Door Dash and Uber Eats, provide most services, about one-third of convenience retailers use their own staff to make off-premise deliveries.

Providing consumers with in-store pick-up options is the most frequently used fulfillment procedure, but so far, no single model as emerged as ideal, the survey found. Expanding fulfillment options should be a priority for the industry, Stillman said.

Today, most stores rely on third-party delivery platforms to provide the apps their customers use, but that puts retailers at a disadvantage since they don’t own—and sometimes don’t even see—their own data. In response, many are working to develop or expand their own proprietary apps that will let customers order, pay and participate in loyalty and rewards programs.

AmPm Brazil’s marketing technology and digital department began developing services, such as click-and-collect, cash-back benefits and digital wallets in 2019, which put the retailer in an enviable position when the pandemic began in early 2020.

“The pandemic was a big kick into the future,” said Viviane Athar, department head, adding that customers will continue to demand convenient, no-contact shopping in the future.

AmPm offers a digital drive-thru that allows customers to shop without leaving their vehicles. A customer simply scans the QR code at the forecourt to access the store menu, places the order and pays remotely. Food and merchandise are delivered to the car by a store employee.

Like most convenience stores, outlets owned by Dublin-based Maxol Group continued operating as an essential business when the pandemic began.

“Customers were happy to come to our stores because they’re smaller stores, we controlled the number of people inside and we had sanitation stations in each store,” said Brian Donaldson, CEO, Maxol Group. And like many other retailers, Maxol offered last-mile fulfillment using Uber Eats and click-and-collect for shoppers who preferred to pick up their orders with minimal human contact.

“We didn’t see a big shift in home delivery for everyday essentials,” he said. “But we did see an increase in demand for food delivery.”

The chain is now rolling out a proprietary app that “puts control in the hands of the customer,” Donaldson said. They’ll be able to order and pay for food and drinks, play games and earn rewards and prizes through a loyalty program. “We’ll also use it to test new products. This will bring us closer to the customer.”

NACS Research last year released its landmark “NACS Last Mile Fulfillment in Convenience Retail” study, outlining the opportunity for convenience retailers to grow sales and expand customer reach as the market evolves.

NACS Convenience Summit Europe is where global retailers gather each year to gain and share knowledge on strategic industry issues, while taking a deep dive into how these core, retail-centric themes will impact the industry today and in the future. This year’s event took place virtually June 1-3; next year the event is taking place in Berlin, Germany, from May 31 to June 2, 2022.

Access a limited-time, European-relevant curation of the best of our global events—NACS Operational Insights - Europe­—featuring on-demand content from the 2021 NACS Convenience Summit Europe, as well as the 2021 NACS Human Resources Forum and NACS Crack the Code Experience. Each purchase includes more than 40 sessions with timely insights and quick-action solutions.

Pat Pape worked in the convenience store industry for more than 20 years before becoming a full-time writer. She writes for NACS Daily and NACS Magazine.

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