Brick-and-mortar food businesses are partnering with major OEMs and autonomous vehicle startups to cut down on last-mile delivery costs.
Operating in the brick-and-mortar food space is no easy task. Grocery retailers and pizza restaurants — among other businesses — face all sorts of challenges, from razor-thin margins to fierce competition.
Retail’s shift online has necessitated that these players master the complex unit economics of last-mile delivery to stay competitive with consumers.
For perspective, last-mile delivery cost businesses more than $86B globally in 2017, according to McKinsey, and can make up 28% of a good’s total transportation cost.
As a result, the opportunity for disruption is substantial.
One strategy that retailers such as Kroger and Domino’s are exploring is to cut out the cost of the driver by using autonomous vehicles. The approach has garnered notable attention in recent months.