Factors Driving Marketing Strategies in the Last Mile Delivery Segment

The logistical system throughout the United States continues to evolve and expand In particular, the last mile delivery segment is spreading rapidly, as indicated by the trend in daily deliveries and innovative warehouses and mini hubs in urban areas.

If you are a reader of this column over the past year or so, you are aware the team at Small Vehicle Resource has focused on the last mile delivery market as a major opportunity for golfcar-type (GCT) vehicle industry and its dealer network. So far, to our knowledge, the industry has not moved aggressively to position itself in this market. Laying aside the possible reasons for this relatively passive response, it might be a good idea to look at some of the key aspects to the modus operandi of players that are, in fact, exploiting the opportunity.

Therefore, this article highlights the characteristics of last mile delivery and the strategies needed to address the concerns of multiple stakeholders that are invariably involved.

Last mile delivery: A story of collaborations and stakeholder interactions

The evolution of logistics systems over the past 10 years has been really remarkable. Big box stores, essentially retail warehouses, which emerged maybe three decades ago, continue to evolve at a rapid pace. The emphasis now is local delivery through and getting customer orders fulfilled and delivered in one day or less.

Achieving the goal of timely delivery has become possible through strategies characterized by two key aspects:

• Collaborations among big box operations and independent companies with expertise in the areas of fleet management and specialized vehicle manufacturers;

• Effective interaction with a variety of stakeholders, such as city officials, neighborhood activists, and environmental advocates.

Target’s collaborative strategy

Big box retailer Target, in its last mile delivery system in Fort Worth, TX, has put together four point collaborative effort. The four pillars of the system include: 1) Target’s own distribution warehouse; 2) Fleet management company, Circuit EV Solutions; 3) Francise-based driver services company, Frontdoor Collective; and 4) Electric delivery vehicle provider, Chevrolet—the Brightdrop electric van. (See the full story: https://www.freightwaves.com/news/target-picks-frontdoor-collective-to-test-electric-vehicle-delivery )

Given that Target is planning to expand its delivery network to more than 35 cities over the course of 2026, the opportunity to provide GCT vehicles for last mile delivery would appear to be substantial. This is an opportunity both for local GCT vehicle dealers and manufacturers, the latter to provide the best equipped vehicle for the market environment, and the former to offer direct sales and service to maintain the fleet. In addition, U.S. manufacturers have the capability of supplying fleet management systems, a legacy of the golf course fleet market.

Sustainable growth in the offing

The last mile delivery market is not only expanding but highly sustainable. The it is and will be sustainable over the long term is indicated by the substantial investments big box stores are making in revamping their entire warehouse, retail stores, and fulfillment centers to accommodate last mile delivery services. (See this in the case of Target: https://www.freightwaves.com/news/target-expanding-next-day-delivery-to-top-35-cities , and see Walmart’s initiatives: Walmart grows automation usage throughout supply chain | Supply Chain Dive .)

It behooves GCT vehicle manufacturers and dealers to map out strategies where GCT vehicles can best be used. It is likely that such vehicles could be used in denser urban environments, where smaller size is an advantage, and where pollution issues have a higher focus.

Growth brings with it potential conflicts: The importance of community relations

In an online article in BKReider the New York City Comptroller issued something of a warning regarding last mile delivery in the city:

“A new report from New York City Comptroller Brad Lander warns that the rapid growth of e-commerce and last-mile delivery services is fueling crashes, air pollution and worker injuries, particularly in Black and brown neighborhoods.”

This story brings to the surface at least three areas of potential conflict regarding the expansion of last mile delivery services. On the one hand, we have the needs of citizens and the public being better served via faster deliveries from private sector companies, but on the other, are the problematic externalities (additional costs) that will be accounted for through public sector intervention.
The short quote cited above indicates quite succinctly that the three areas of concern are:

• Vehicle crashes;

• Air pollution; and

• Pedestrian and worker injuries.

And, in addition these issues are most pronounced in minority neighborhoods.
How GCT vehicles meet the above challenges
Upgrades in GCT vehicles include a number of safety features that are unlikely to be found in some categories of last mile delivery vehicles, such as ebikes, escargot bikes, and scooters. These safety features include backup cameras, seatbelts, turn signals, and LED lighting systems. In addition, autonomous driving technologies provide warning systems, helping to aboid collisions with other vehicles, as well as decreasing the likelihood of injury to pedestrians.

The case for GCT vehicles is further advanced in that fleets can be offered that are completely electric-powered. thus eliminating the issue of air pollution. Lastly, there should be no barriers, as far as the vehicles themselves are concerned, to serving minority communities on an equal basis with non-minority areas.

Context of widely expanding autonomous driving services

These developments are forging ahead in the context of a multiplicity pf autonomous driving systems being installed around the country—which is to say that there are few barriers to broadscale inclusion of GCT vehicles in this market segment.

Seizing the last mile delivery opportunity will, however, involve leaving behind the golf legacy and embracing new market and sales strategies.

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Contact the Author: Steve Metzger at smetzger@smallvehicleresource.com.  Or check out our website at www.smallvehicleresource.com, where you will find an extensive database of vehicle models and can make side-by-side comparisons of vehicles based on a full set of specifications.