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Experts predict final-mile challenges will make or break retailers this year, so many are turning to third-party delivery services or acquiring their own tech

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Business Insider – 11/20/20

For brick-and-mortar retailers, the holiday season has historically been all about location, location, location — the right spot at the mall, for instance, or the most-visible corner in the neighborhood.

This year, however, fulfillment has moved front and center for retail success, as consumers remain wary of lingering in stores and ecommerce is predicted to soar over 35% compared to last year. And the most essential, yet challenging, element of fulfillment is the “final mile” — completing the last leg of the trip, from the distribution point to the customer’s doorstep.

“Historically, the last mile is the most difficult to efficiently execute and is the most costly leg in the delivery process,” Ken Morris, managing partner of retail and restaurant consulting firm Cambridge Retail Advisors, told Business Insider. “This year, making online and omnichannel transactions profitable is imperative, as retailers can no longer expect the margins of in-store transactions to offset the cost of delivering online or ship-from-store orders.”

Finally, big-box retailers also have the cost-effective option of trying to avoid the final mile entirely by encouraging customers to use BOPIS (buy online, pickup in store) or curbside pickup options. “It not only saves shipping costs for the retailer and customer, but it also presents opportunities to drive incremental purchases while the customer visits your store,” Morris said.

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