In 2021, the United States alone witnessed $469.2 billion sales online, a $431.6 million boost from the year prior. This recent success and e-commerce’s promising future has led to a shift in consumer expectations, calling for large retailers to keep up with these shifts in order to maintain their competitive edge with already-prominent online retailers.
One rapid change stemming from the COVID-19 Pandemic includes a more streamlined direct-to-consumer approach. It’s known as quick commerce.
What is quick commerce?
Quick commerce stresses the importance of quick and efficient delivery ASAP. As retailers began to close their doors at the sight of online shopping, they were instead revived by a new solution. Retailers are now focused on expanding and optimizing their own fleets to provide the same quick, efficient service that consumers have grown accustomed to during the pandemic.
While this gives big-box stores their edge back, there is a major downside to this new approach. This whirlwind change in the market is not cheap and building a fleet seemingly overnight is not easy.
Let’s investigate how efficiently these big-box stores are using their fleets to meet consumer demands and where they’re headed, while also noting how the costs of fleet expansion in today’s market can be avoided.
“We believe our strategy needs to embrace that reality and lead in the space, and not follow,” said Best Buy’s CEO in 2021. Since then, the retail tech giant has focused on plans to expand in the directions of fleet management and away from a retail footprint.
Best Buy has plans to limit its leases in retail locations, but still use them as pivotal points for customer pickup locations. The company is fully embracing online with hopes to optimize its locations to support this new direction in retail.
Walmart took a creative approach to meet customer demand for more efficient last-mile delivery. It’s paving the way for other retailers looking to create private delivery fleets by launching a private fleet development program. The retail giant hired 4,500 drivers in 2021 with plans to bring 12,000 drivers into the program.
The company has zeroed in on speedy delivery through Walmart+, its subscription-based same-day delivery service. Customers can even get select items in as little as two hours.
At the end of 2021, the company launched its new program known as “GoLocal.” It connects other retailers with consumers using a white-label fleet. Walmart has been electrifying its fleet and has also proposed more futuristic vehicles, such as self-driving cars and drones for grocery delivery services.
Since 2019, Home Depot has been toying with the idea of establishing its own fleet and taking last-mile delivery in its own hands. Citing “unexpected consumer demands,” the company has even ventured into controlling its own cargo ships for a temporary time.
The company has been looking to avoid supply chain issues, investing around $1.2 billion in establishing last-mile delivery sites, with plans to continue expanding.
Home Depot has launched its own delivery service and installation known as “Depot Direct” with a strong desire to get products into consumer’s hands quicker. Times vary as the retailer still uses smaller parcel carriers to provide for some deliveries, but consumers can see products in as little as two days.
The retailer is looking to continue to expand its last-mile delivery efforts in hopes of curtailing supply chain issues.
Growing problems in fleet expansion
While these steps forward are exciting for both the company and consumer, there are natural drawbacks that make it difficult to scale as rapidly as the market demands.
- Inflation: The cost of vehicle ownership is at an all-time-high, with difficulty purchasing both new and used vehicles.
- Shortages: Vehicle maintenance has become a challenge as well since replacement parts are hard to come by and are expensive.
- Time: Retailers have to work fast to compete with already-established online sellers, and waiting around for parts and vans to purchase isn’t exactly feasible. They need trucks now to keep up with the consumer demand.
- Volatile market: While it’s clear that e-commerce isn’t going away, consumer expectations continue to shift, causing difficulty predicting how many vans a company will need and when. Retailers need flexible options to accommodate these shifts.
Fluid Truck is your leader in fleet efficiency
Consumer trends and recent news points to rapid expansion of big-box fleets, but this is not without hassle. Owning your own fleet can be expensive and time consuming when it comes to maintenance, as well as developing the technology to sustain long-term growth and profitability.
Fluid Truck is the leader in providing vans and fleet-efficient tech whenever you need them. The mobility company enables companies to maintain their edge using proprietary technology that allows companies to manage their fleet seamlessly. Thousands of companies across the U.S. utilize Fluid Truck’s fleet to dodge the supply chain issues, inflation costs, and vehicle shortages.. To get started, simply download the Fluid Truck app or visit its website to learn more about how Fluid Truck is making it easier to expand your fleet quickly and conveniently.