Skip to content
‹ Back to IndustriesRetail

Last Mile Delivery Divides Retail Industry

One of the great challenges to a retailer adapting to a seamless omnichannel shopping experience is shipping, and one leg of it in particular. Last mile delivery accounts for the final stretch from a local delivery hub to a customer’s door. Through prophecies of doom and gloom, retail shopping has evolved rather than died out…

This story was produced through MarketScale. See how Retail teams put it to work with Sales Enablement.

Share
Last Mile Delivery Divides Retail Industry

Free workspace

Turn your Retail expertise into content.

Record interviews, organize footage, and write with AI on a free trial of the MarketScale platform for qualifying companies. No demo required, no credit card.

Try it Free

One of the great challenges to a retailer adapting to a seamless omnichannel shopping experience is shipping, and one leg of it in particular. Last mile delivery accounts for the final stretch from a local delivery hub to a customer’s door. Through prophecies of doom and gloom, retail shopping has evolved rather than died out over the last few years. While brick and mortar growth has kept steady at 6 percent over the past decade, online shopping is rocketing at 47 percent growth over the same period with some forecasters seeing a multi-trillion-dollar market by 2021.[1]

With that growth in mind, retailers of all sizes are ramping up last mile delivery solutions to keep pace with competitors.

Much of the driving force around competition for that last mile comes from differentiation in a world of e-commerce. Consumers have numerous local options and countless more online, so retailers that can deliver promptly and with excellent service are poised to gain and build on brand loyalty.

The omnipresent Amazon Prime has made free delivery a standard, complicating an already maddening logistical nightmare. In short, retailers are scrambling to cut down their shipping times while ignoring the cost in the short term.[2]

The cause of last mile delivery costs are numerous and vary on the destination. In suburban settings, drivers may face long routes with only a handful of deliveries at each stop while urban drivers face traffic congestion and tightening regulation around temporary parking and noise complaints.[3]

Currently, small and midsize retailers can guarantee shipping within two weeks. Pressure from consumers and well-established competitors are pulling that timeline toward a week or less which merely exacerbates the current challenges.

For now, larger retailers are shouldering the costs and pushing ahead to build last mile systems. On-demand and crowdsource solutions are growing in popularity, combining the agility of Uber with the consumer data of a retail chain.

Amazon Key has grown to nearly 40 cities, allowing drivers to deposit packages without a resident necessary, cutting down on costly and time-consuming return visits.[4] While they are not doing so yet, many observers see advantages of smaller retailers sharing data or even systems to consolidate, boosting effectiveness and minimizing costs.[5]

In the short-term the challenge of last mile delivery lies in the unknown. While costs pile up and companies patch together ad-hoc solutions, a definitive cure is for now, out of reach. Many companies are banking on strong, costly service now to pay off in consumer loyalty down the line.

Your experts belong here

Every story in MarketScale Retail starts with a company putting its merchandising leads, store operations teams, and category managers on the record. Buyers are already reading this topic. The only question is whose experts they find.

Category buyers trust operators, so your merchandising leads shorten the distance between first search and first call.

Book DemoSee how it works15 minutes, straight to a calendar.
B2B Weekly

The week in Retail, and sixteen other industries, every Monday.

Ten stories, one-line takes, five minutes. Free.

Retail: are you visible to AI?

Before they reach out, Retail buyers ask AI engines which vendors to trust. Explore how your experts, customers, and partners can become useful content for buyers and AI search.

Free Trial

You just read one Retail expert. Your company is full of them.

This article was produced through MarketScale. The same platform turns your merchandising leads, store operations teams, and category managers into the articles, video, and social content Retail buyers are searching for. Start a free trial and see it with your own people. For qualifying companies, no credit card, no demo required.

NPS +73 · 1,000+ creators · 38+ countries

What your free trial includes

Hands-on access to the MarketScale platform
Media requests to your crowd, remote recording, AI writing tools
No demo required. No credit card.
For qualifying companies. Company confirmation required.

More Retail Insights

Amazon puts Prime delivery on merchants' own sites at no extra fee

Amazon puts Prime delivery on merchants' own sites at no extra fee

U.S. merchants using Amazon's Multichannel Fulfillment can now offer Prime delivery on their own websites at no cost beyond standard fees. Shoppers never log in to Amazon, and merchants keep their checkout, payments and returns. A separate program can reduce fulfillment fees by 15% to 25% for the first six months, according to PYMNTS.

  • 01The Prime badge now costs an MCF merchant nothing beyond the fulfillment fee it already pays, and the checkout page stays the merchant's own.

Sep 27, 2026

Open questions in agentic commerce extend beyond the AI model

Agentic commerce raises questions beyond an agent’s ability to compare prices: what an agent is permitted to do, who is responsible when an agent-initiated purchase goes wrong, and how machine-initiated transactions move safely across merchants, banks and payment networks. Mastercard's Sabrina Tharani frames the shift as a new interface for commerce rather than a separate channel.

  • 01Agentic commerce now turns on three questions the AI can't answer for itself: what the agent may do, who is responsible when it errs, and how its transaction moves between merchant, bank and network.

Sep 26, 2026

Grocers matching store prices on Instacart grew 10 points faster, Instacart says

Grocers matching store prices on Instacart grew 10 points faster, Instacart says

Instacart says it named five grocers as "among" this year’s no-markup adopters, including Grocery Outlet. Using its internal data through Q2 2026, Instacart reports no-markup retailers grew 10 percentage points faster than those charging a markup. Participating grocers also get placement in a dedicated in-app "no markups" tab.

  • 01On Instacart, matching store prices earns a yellow banner and placement in a filtered "no markups" tab; Instacart’s internal data through Q2 2026 shows no-markup retailers grew 10 percentage points faster than those charging a markup.
  • 02The 10-point gap compares grocers that chose parity with grocers that didn't, so it can't separate the effect of pricing from the kind of retailer that opts in first. The sharper question is how retailers with similar baskets fared before and after they switched.
  • 03Parity covers item prices only. Service fees still apply, so the app price-to-shelf-tag comparison evens out while convenience charges remain their own line on the receipt.

Sep 26, 2026

Explore More Retail Insights

Read more expert perspectives from across Retail.

Browse Retail Hub

For B2B teams

Your experts could be publishing here

Stories like this one run on content MarketScale captures from real practitioners. See how your team's expertise becomes coverage in Retail and beyond.

Book a Demo

Or call us. No forms required. We pick up. 214-945-2512