Hey Jeff Bezos, the aftermarket has that last mile covered

by | Aug 14, 2018 | 0 comments

If I were an aftermarket distribution executive, regardless of whether I was sitting in a glass-and-steel corner office or in a wood-panelled backroom overlooking a wheat field, I think I’d be trying to get Amazon’s Jeff Bezos on the phone to tell him just that.

Dealing with that last mile is driving traditional retailers and online sellers to distraction – but not the aftermarket. This industry has been in “the last mile” business since its inception. This puts it in stark contrast with much of the bricks-and-mortar business world.

A recent review of Walmart’s ongoing efforts to close the gap on “the last mile” reveals just how far the mega-retailer is willing to go to get its products to customers, and also just how far from reality the public positioning of its relationship with “associates” is.

For some time now, Walmart has been trotting out a series of pilot projects intended to leverage its considerable workforce as a ready-made, low-cost delivery service.

In essence, the plan is to fight the likes of Amazon by employing staff to deliver packages on the way home, in their own vehicles.

On the face of it, the plan sounds brilliant. At the end of their shift, staff could drop off a few packages and make some extra money.

Then reality sets in: in at least one pilot, staff said they spent too much time waiting for the packages to get loaded, and were paid too little in consideration for the real time it took to deliver them.

Which brings me to the second point: whether you call them associates, team members or whatever, they pretty quickly turned into employees less concerned about the benefit to the retailer than the impact on their lives, especially when the dollars and cents did not add up for them. (Plus, many had questions about the insurance implications of turning their personal vehicle into a delivery vehicle.)

There’s a great Reuters article HERE that details the ins and outs. There are some lessons here.

In short, despite its considerable might, Walmart’s in-house last-mile capabilities are virtually zero. They, like Amazon, rely on third-party providers.

When you get right down to it, the potential is there to be the behind-the-scenes provider to many of these sellers, and in smaller ways (smaller than Amazon, that is), this has been the case already.

Strip away the branding at the customer end, and it might just cease to matter if in a limited way it is your warehouse that is supplying the goods, your drivers doing the delivery, and your bank account making the deposit.

And it doesn’t have to be national and global. It may make sense in some harder-to-service areas, but not in major hubs. To be sure, there is a danger to being too discrete a business – you’re easily replaced, for example – but if a major online seller is going to be dropping products to your customers, it might as well be through you.

I am fully aware that this is not a revolutionary idea and there are potential pitfalls, but the scale that the concept could take these days is without precedent. Put simply, though, it may be a case of having them go through you, or go around you.


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