It’s difficult to overstate the impact of COVID-19. The global pandemic has forced all of us to rethink our movements, rituals and routines, and it has changed the way we buy and consume goods and services, perhaps forever.

These changes in consumer behaviour have huge ramifications on the logistics infrastructure underpinning the hospitality and retail industries. As last-mile delivery continues to become an increasingly vital pathway for revenue, here are three key trends to help you understand how the pandemic is reshaping our delivery economy.

The rising tide of digital 

Seemingly overnight, the pandemic challenged businesses and restaurants to reshape what the consumer experience could be. In hospitality, trends around dining at home and digital enablement have sped up, leading to nearly three-quarters of restaurants adopting takeaway and delivery services during the pandemic. In retail, e-commerce in Australia grew over 80 per cent year on year (YOY) in the eight weeks after the World Health Organisation declared the COVID-19 pandemic.

Geographically, people are also gravitating towards lower-density areas, accelerating digital adoption. As employees have transitioned to working from home, movement from urban centres has declined with the amount of money people are spending at their local cafes doubling in some suburbs. People’s movements have changed accordingly; while our favourite cafe used to be within walking distance, it’s now likely to be much farther, with food delivery apps becoming a more convenient alternative.

Environmental impact at the fore

Another macro trend heightened by the pandemic has been growing consumer awareness of mounting environmental challenges, and the corresponding pressure that businesses face to adopt sustainable business practices.

According to a recent BCG survey across eight countries, 70% of participants are more aware now than before COVID-19 that human activity threatens the climate and that degradation of the environment, in turn, threatens humans. Three-quarters of respondents also said environmental issues are as concerning as — or more concerning than —health issues.

As consumers become increasingly concerned with the environmental impact of their consumption and as businesses aim to reduce their carbon footprint, logistics infrastructure will play an essential role in the building of a sustainable economy.

The rise of LEVs

Changing consumer behaviour has also led to the increased adoption of light electric vehicles, not only by consumers looking to escape public transport but also for the delivery sector. 

Light electric vehicles such as e-bikes have already become a common sight in our city streets, a trend that is predicted to continue, with the urban last-mile delivery market expected to grow 78% by 2030. Ideally suited to densely populated areas, e-bikes are more manoeuvrable, agile and cheaper to acquire than cars and trucks.

As fast delivery becomes an increasingly competitive point of difference in the e-commerce sector, online retailers will increasingly move from large, out-of-town distribution centres towards smaller warehouses closer to densely populated areas. Speed is vital, and inner-city logistics will increasingly be built on a ‘micro’ network, with orders fulfilled a short distance from where they’re delivered — ideal for e-bikes.

Light electric vehicles are also a handy way to offset our carbon footprint. Australian transport produces nearly 100 million tonnes of emissions each year and, according to the National Greenhouse Gas Inventory, cars and light commercial vehicles represent more than half of those emissions. For organisations such as Amazon, UPS and DHL the use of e-bikes to deliver packages is an exciting opportunity to do business in a more environmentally friendly way.

Looking ahead
Research from McKinsey & Company shows that consumer and business digital adoption globally has vaulted five years forward in a matter of eight weeks, and the hospitality and retail industry is no different. Looking ahead, I truly believe that in five to ten years, light electric vehicles will be the predominant form of transportation, and will play a vital role in the flow of goods across all of our urban centres. At Zoomo, we’re building the infrastructure to support this transformation.

Mina Nada is co-founder and CEO of Zoomo