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Adopt Crowdsourcing Last-Mile Platforms as a Key
Component of Your Logistics Strategy
Published 8 November 2021 - ID G00746581 - 11 min read
By Chris Kina
Crowdsourcing last-mile platforms are enjoying rapid global adoption as credible and long-term
solutions for meeting e-commerce service demands. Logistics leaders should embrace this
COVID-19-accelerated delivery method to secure parcel capacity, freight savings and delivery
excellence.
Overview
Key Findings
■ With the continued growth of e-commerce, shippers struggle to meet constantly changing
consumer delivery demands and order frequencies.
■ Capacity constraints and urban traffic congestion in densely populated areas are becoming the
norm, impacting service levels, driving logistics inefficiencies and increasing last-mile costs.
■ Logistics leaders require new sources of last-mile delivery options to consistently meet the highly
variable delivery speed demands of consumers.
Recommendations
Logistics leaders managing logistics and customer fulfillment who are looking to optimize their lastmile delivery by leveraging crowdsourcing should:
■ Increase delivery capacity utilizing crowdsourcing by reviewing opportunities where failure points
exist in direct-to-consumer (D2C) last-mile networks.
■ Assess crowdsourcing providers to evaluate where best-fit scenarios exist, matching the
appropriate solution with capacity and/or service needs.
■ Evaluate the platform’s execution, integration and customer satisfaction success by testing and
benchmarking the crowdsourcing solution.
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Introduction
E-commerce demand on last-mile delivery capacity, costs and service levels continues to challenge
logistics leaders to successfully meet customer service expectations. Figure 1 below lists the top
constraints logistics leaders face when measuring final-mile execution success.
Figure 1. Top Final-Mile Constraints
Outside of packaging suitability for final (last) mile, the constraints of urban market access, changing
consumer demand around delivery speed and cost all combine to challenge logistics leaders to find
new solutions. D2C shipments, in particular, add an additional layer of complexity to these last-mile
delivery challenges, making the task of successfully executing these deliveries even more difficult.
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Crowdsourced delivery capabilities answer that challenge, providing logistics leaders with additional
last-mile capacity resources, lower delivery costs through optimized routing and order consolidations
and improved customer experience for D2C shipments.
Crowdsourcing, in the context of a last-mile delivery solution, is applicable to multiple products and
industries. It is a method of fulfillment that uses a network of local delivery modes in densely
populated areas to deliver orders directly to customers. There now exist more localized points of
fulfillment enabling crowdsourced last-mile delivery (e.g., fulfillment from store). But let’s get more
specific about the definition.
Crowdsourcing as a last-mile delivery solution combines technology and
local delivery resources to execute shipments from warehouses, stores or
fulfillment centers directly to consumers.
Crowdsourcing’s ability to optimize orders, routes and cost is achieved through the application of
technology platforms combined with the aggregation of delivery resources. This combination allows
crowdsourcing to become a scalable, agile and deployable solution for almost any type of product
and distribution network. Traditional parcel fulfillment processes simply cannot meet the delivery
timelines where capacity limitations and congestion have taken over. Crowdsourcing provides
shippers a new path down those crowded streets.
Analysis
Increase Delivery Capacity by Applying Available Crowdsourced Resources to D2C
Last-Mile Failure Points
By reviewing opportunities where failure points exist in D2C last-mile networks, retailers can apply
crowdsourcing for increased delivery capacity. Logistics leaders should segment their D2C demand
and identify, from a geographic or service perspective, where the risk of last-mile execution failure
points is more prominent, and then apply a crowdsourced solution.
We all have heard of crowdsourced last-mile delivery — and most of us have used it for grocery or
takeout deliveries. The solution’s rapid expansion into multiple verticals now provides a wider range
of companies the opportunity to capitalize on crowdsourcing benefits for D2C delivery. And there is
no shortage of crowdsourcing vendors on a global scale to choose from, and the crowdsourcing
vendor marketplace continues to expand. Table 1 presents just a small sample of providers in this
rapidly scaling last-mile platform market.
Table 1: Global Crowdsourcing Delivery Platform Vendors
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Name
Headquarters
Verticals Serviced
Regions Served (2021)
Bringg
Tel Aviv, Israel
All
Global
Budbee
Stockholm, Sweden
All
Nordics
Deliveroo
London, England
Food
Europe and Asia
DoorDash
San Diego, U.S.
Food
U.S. and Europe
Entrusters
Buenos Aires, Argentina
All
Global
Getir
Istanbul, Turkey
Food
Turkey and Europe
Gorillas
Berlin, Germany
All
Global
Locologic
Chicago, U.S.
All
Global
Narvar
San Francisco, U.S.
All
Global
PiggyBee
Belgium, France
All
Europe
Uber Eats
San Francisco, U.S.
All
Global
Source: Gartner
Recent vendor acquisitions by large retailers of crowdsourcing platforms provide more evidence that
these solutions are viable D2C last-mile logistics strategies. Target Stores, a $94 billion dollar retailer,
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saw the need for D2C shipping solutions beyond traditional parcel carriers and purchased
crowdsourcing companies Deliv and Shipt as technology and delivery assets. 1 More recently, in
2021, UPS acquired Roadie, a crowdsourced delivery platform, 2 and Walmart went even further,
offering its own last-mile services by launching GoLocal, carrying goods from other local retailers to
consumers under a crowdsourced platform. Walmart said that the delivery fleet would also include
newer technologies for delivery modes, such as self-driving vehicles and drones. 3
Further evidence supporting the need for logistics leaders to seek new last-mile solutions, particularly
in urban areas, is summarized in Figure 2 below. The World Economic Forum projects that, by 2030,
demand for urban last-mile delivery is expected to grow by 78% — and this study was conducted in
the pre-COVID-19 environment.
4
Figure 2: The World Economic Forum Projected Demand for Urban
Last-Mile Delivery
This growth rate, within the confines of the world’s top 100 cities, will translate into 36% more delivery
vehicles on the streets. 4 Parcel delivery vehicles are already double-parking and blocking lanes in
cities; empty delivery miles are piling up from inefficient routes; and the environmental impacts of
congestion and inefficiencies are having adverse effects on sustainability efforts of shippers.
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Crowdsourcing providers typically have four common process flows, or execution steps, that make
them work — from both a service and cost perspective. Figure 3 illustrates those basic process flow
components.
Figure 3: Crowdsourcing Process Flow Components
The four process steps can be described this way:
1. Online orders are processed through the virtual crowdsourcing platform and the data is
aggregated and deployed at point of shipment — your distribution center, store, 3PL — wherever
the pickup origin will take place.
2. Orders are consolidated where possible and dynamically assigned an optimized route and the
packages are dispatched to the optimized asset (i.e., mode of transport) — a parcel fleet, gig driver,
cargo bike, delivery van — whatever combination of route and mode meets the delivery speed
requirement at the lowest cost.
3. Orders are scanned when loaded or picked up, initiating real-time track-and-trace mobile alerts to
the shipper, delivery driver and the customer.
4. The package arrives at the final delivery destination and the proof of delivery (POD) is
electronically confirmed in real time.
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Supporting the process flow is, of course, the technology. Crowdsourcing platforms allow not only
optimized delivery execution, but also provide the ability to:
■ Deliver real-time route updates on a gig driver’s phone.
■ Match demand and service speed requirements without manual intervention.
■ Create optimized, efficient and dynamic routes to deliver your products.
There are three technology components common in all crowdsourcing platforms (see Figure 4):
■ The dispatch software application, where dynamic order and route optimization occurs.
■ The driver application, which directs the delivery resource along the path to optimized delivery
execution.
■ The customer-facing application, which measures the success of the customer experience.
Figure 4: Three Critical Technology Components That Optimize
Crowdsourcing
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Dispatch Software
The first component, the dispatch software, is the core of the platform where dynamic order and
route optimization occur. For example, say routes have already been built in advance to ship today
(through the platform’s optimized order and routing process), but an order comes in at 10 a.m. for
same-day delivery. The software will dynamically add this same-day order to an existing route, or, if
none are available, assign the most cost-effective mode to deliver as dictated by the delivery
requirement — all without manual intervention by the shipper. After the order is dispatched, the realtime tracking and ETA calculations and alerts are triggered to both customer and shipper. The
platform also provides an operational dashboard to monitor exceptions, delays and report
performance metrics.
Driver Application
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The second critical component of crowdsourcing platforms is the driver application. This mobile
interface provides the driver with:
■ Real-time route and traffic updates to avoid delays in delivery
■ Electronic proof of delivery for fast and accurate delivery confirmations
■ Live chat with dispatch and driver to avoid failed pickups — a costly event in D2C deliveries given
the relatively low order value.
Customer-Facing Application
The third technology component is the customer-facing application. This component is critical as it
will measure the customer experience for your delivery. It provides real-time driver tracking for the
customer with dynamic ETA updates. Also, any unique delivery requirements and instructions (for
example, leave at door, signature required) are noted. A live chat feature helps both the customer and
driver coordinate the final delivery — again avoiding costly failed deliveries. A 2021 study by location
data firm Loqate reveals that 8% of all domestic first-time deliveries fail, costing retailers an average
of an additional $17.20 per order. 5 No small sum in the context of lower-margin D2C orders. Even
more important than the cost, it’s the failed customer experience. The same study also highlights that
62% of consumers have experienced a late or failed delivery with their e-commerce orders — a
statistic that should worry all D2C shippers. 5
Assess Crowdsourcing Providers to Evaluate Where Best-Fit Scenarios Exist
Once you have determined the segmented opportunities where a crowdsourcing platform can help
with capacity, execution and/or stabilize delivery costs, it is time to choose providers and begin the
evaluation and selection process. It is important to point out here that crowdsourced solutions are
typically not a one-size-fits-all proposition. The crowdsourced provider market continues to expand as
a result of generic growth of provider geographic and vertical coverage areas, consolidation among
startups and new players entering the market. Therefore, the focus should be on matching your
specific pain points and needs to available providers to determine the best-fit scenario.
These are the core considerations to investigate when selecting crowdsourcing providers:
■ Service levels: Ability to meet delivery speed requirements based on the service-level commitment
of your e-commerce business model, as well as real-time customer experience data capture and
reporting.
■ Technology: Real-time tracking and notifications, dynamic route optimization, order consolidation,
operational and customer data and analytics, branded customer-facing applications, fast
integration abilities.
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■ Delivery resources: Specific geographical coverage and modes of delivery offered (e.g., trucks,
vans, gig drivers, cargo bikes). Obtain detailed delivery resource types so you understand
who/what will be delivering your products.
■ Scalability: Ability of the solution to quickly and easily scale up, and down, as your online business
fluctuates. E-commerce demand can be highly variable/seasonal — any solution should be able to
immediately adapt to volume changes.
■ Visibility: Not only for track/trace/delivery, but also visibility into the platform’s daily operations.
Metric reporting and exception management abilities are critical.
■ References and case studies: Several references and success stories shared by the supplier. All
should be vetted. If a supplier doesn’t have them, look elsewhere.
Evaluate the Platform’s Execution, Integration and Customer Satisfaction Success by
Testing and Benchmarking
So crowdsourcing can improve both capacity and delivery performance over multiple types of
delivery modes, geographies and verticals. But how does one get started? Table 2 lists the five initial
steps logistics leaders should take to test, benchmark and evaluate the platform’s execution,
integration and customer satisfaction success in order to capitalize on this last-mile solution.
Remember to start small in scope; choose a particular geographic location where service failure is
most likely to occur.
Table 2: Initial Steps to Implement Crowdsourcing
Initial Steps to Implement Crowdsourcing
1. Segment geographic areas of demand to apply crowdsourcing platforms.
2. Consider your current distribution network footprint for crowdsourcing applicability.
3. Engage crowdsourcing platform vendors to select the most appropriate solution for each segment.
4. Acid test market solutions to validate integration, execution and service deliverables of the platform.
5. Use success as a stepping stone to expand the platform and build long-term delivery strategies for
service excellence.
Source: Gartner
One caution around the growth of crowdsourcing platforms is related to the gig economy and its
multiple forms of transport, such as cargo bikes, scooters, electrified bikes and even autonomous
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delivery vans. While providing additional capacity and sustainability with regard to emissions, will this
rapid growth of delivery modes help ease congestion or possibly add to it? In addition, in Europe
(Spain and Italy, in particular) there is a growing call to ban gig economy vehicles from using
pavements. There are also concerns over the possible exploitation of workers that have no minimum
wage protection due to their self-employed status.
While crowdsourced delivery remains an important emerging component in D2C last-mile execution
and optimization, logistics leaders should remain cognizant of the aforementioned risks with this
platform. Cautions withstanding, by embracing crowdsourcing now as a strategic component of your
last-mile delivery network, you can secure an additional D2C weapon to improve delivery performance
while optimizing your consumer delivery networks.
Crowdsourcing for last-mile delivery, fueled first by the pandemic and now by the permanent change
in consumer buying habits to online shopping, has added more localized points of fulfillment,
allowing for its evolution into a powerful, localized delivery optimization resource. Additionally, many
types of deliveries can be augmented by crowdshipping platforms, including D2C, consumer to
business for returns and business to business (B2B) — all driving improvement in the customer
experience that ultimately defines your success with e-commerce fulfillment. When segmented
properly as part of your overall e-commerce delivery strategy, crowdsourcing can improve both the
customer experience and reduce costs for last-mile deliveries.
Evidence
1
Target Launches a Dedicated Shopping Site for Same-Day Delivery, Powered by Shipt, TechCrunch.
2
UPS Enters Into Agreement to Acquire Roadie, UPS Financial Release.
3
Walmart Launches Delivery Business to Connect Other Local Retailers With Consumers, CNBC.
4
The Future of the Last-Mile Ecosystem, World Economic Forum.
5
Fixing Failed Deliveries: Stamping Out Faulty Fulfilment, Loqate.
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