Using Data to Identify Last-mile Distribution Needs

Prepared for Jamestown by 7Park Data

Last-mile distribution accounts for >50% of the cost of delivery; as e-commerce demand grows in less dense, suburban/exurban areas, new distribution networks will be needed.

• E-commerce market share of consumer staples increased +116% Y/Y in urban areas and +107% Y/Y the suburbs. The Increases occurred at all income levels.

• 47% of total spending occurred online in Sept 2020 compared to 29% in Sept 2019. Online Retail peaked in April 2020 at 57% of $ spent. E-commerce adoption remains elevated at +40% Growth Y/Y going into Q4 2020.

• Last Mile distribution networks need to prepare for expansion as demand grows from suburbs.•E-commerce market share of consumer staples increased +116% Y/Y in urban areas and +107% Y/Y the suburbs. The Increases occurred at all income levels.

• 47% of total spending occurred online in Sept 2020 compared to 29% in Sept 2019. Online Retail peaked in April 2020 at 57% of $ spent. E-commerce adoption remains elevated at +40% Growth Y/Y going into Q4 2020.

• Last Mile distribution networks need to prepare for expansion as demand grows from suburbs.

E-commerce expansion puts increasing demands on last-mile warehousing:

• Existing warehousing inventory is largely built to supply densely populated urban cores; however, Suburbs and Exurbs have also seen high levels of e-commerce growth across all income levels.

• 2020s is expected to be decade of enormous e-commerce expansion, especially in consumer staples and just-in-time delivery. Customers expect orders in hours rather than days, or weeks.

• Trend is toward smaller, specialized warehouses (e.g. cold storage) closer to delivery destinations rather than large distribution centers in order to meet the growing demand for consumer staples.

• Site selection processes need additional data to keep up with increasingly widening area and increased specialization of distribution.

Case Study: Nashville

7Park e-commerce data can help identify best locations for last-mile distribution centers in Nashville: