What’s the Future of Retail Logistics in the Last Mile?

The world of retail has been at the forefront of technology trends for a few years now—from the quick digital pivots brought on during the pandemic to the increasing adoption of technology powered by AI and cloud computing. For an industry historically associated with brick and mortar shopping, the speed of progress can be dizzying.

The future is always difficult to predict, but we can be fairly certain of one thing: the pace of change isn’t about to slow down any time soon. That means that retailers who want to stay ahead of the cost-optimization and customer satisfaction curves need to take stock of what the next 12 months—and beyond—are likely to hold. 

Some of what’s coming down the pike will be easy to spot from a mile away. Tariffs and other geopolitical disruptions will introduce uncertainty into the global supply chain, and whether or not your particular value chain is impacted, you’ll have to prepare for potential disruptions. 

AI will also continue to be a major force. One recent study showed that more than 90% of supply chain leaders—and a staggering 100% of executives—expected AI to power smarter logistics management in the next 12 months. That gap between the executive perspective and the point of view of those who work with the supply chain more directly is at least a little bit telling. But it doesn’t detract from the overwhelming consensus. 

Of course, AI has already been making its presence felt in small-scale ways within the world of retail for many years. Leaders in retail delivery already leverage AI and machine learning to optimize their routes more quickly and accurately, for instance. But there’s little doubt that these use cases will proliferate—soon, AI could touch everything from customer experience to billing and settlement.

No one has a crystal ball (at least not an accurate one), so the specifics are virtually guaranteed to surprise us. But retailers who are able to keep a close eye on coming trends and work to stay adaptive will be poised to succeed in an increasingly competitive landscape. 

Top Challenges in Retail Logistics and Distribution

If you’re a retailer or a distributor, you don’t need us to tell you what your challenges are. But as technology providers, we have a bird's eye view of how those challenges are evolving alongside—and in response to—changing technology. 

Here are some of the top challenges we envision for the rest of 2025 and beyond, and the ways that retailers can tackle them with smarter supply chain tech. 

Meeting increased consumer expectations

In some ways it feels like ancient history, but when the pandemic hit there was a huge emphasis on digital channels that ultimately transformed a lot of e-commerce and other retailer operations for the better. Businesses that had traditionally relied on in-person sales associates working the showroom to do the bulk of their sales had to find a way to translate their distinct brands to a digital medium.

This meant that consumers quickly got used to a new standard in delivery experience. It’s a cliche now to say that consumers expect frequent notifications, real-time delivery tracking, and an open line of communication to their retailer at all times—but it really is true. DispatchTrack’s own research confirmed that, even a couple of years ago, 90% of consumers wanted the ability to track their delivery orders in real time from the comfort of their own devices. 

For retailers, this means continuing to place a strong emphasis on UX and UI, as well as connectivity and visibility. But technology is making this easier every day. At DispatchTrack, for example, we just released a new AI-powered chat agent that’s able to instantly answer questions from your customers at any hour of the day. Read more about DT Agent here.

Dealing with volatile costs

There have been a rash of headlines about the price of eggs in 2025—but eggs are hardly unique in the past few years. During the pandemic it was yeast and other baking supplies. In 2022 it was lumber. Who knows what it will be in 2026, or even later this year. 

As a retailer, you don’t have the option of pivoting away from a core product just because materials have become too expensive—that’s why optimization is more crucial than ever. The more effectively you can ensure lean operations in the last mile, the more leeway you’ll have to weather pricing-related storms.

Retail logistics/ecommerce cost optimization can be easier said than done. But you can decrease your fuel and labor costs with smarter route optimization. Likewise, you can decrease the costs associated with missed and failed deliveries (to say nothing of decreasing customer churn) by improving customer experience. 

It’s also crucial to leverage technology for automation to save your team time and effort and speed up retail distribution and logistics processes. The more sophisticated last mile technology gets, the more you can free up dispatchers’ and managers’ time and get more out of your team.  

Navigating trade disruptions

Trade disruptions are in the same category as price hikes. If you can optimize, you can put yourself in a better position to deal with whatever the global retail logistics supply chain throws at you.

Here, integration and visibility are key. If you’re having upstream disruptions in what you’re doing, you want to be able to spot them early and see exactly what impact they’re having on your supply chain. To that end, the left hand needs to know what the right is doing—meaning that your data has to be accurate, high-velocity, and centralized, which is something that’s only possible when your technology stack is effectively integrated. 

As more and more retailers are becoming aware of this fact, technology providers are working harder to make sure their solutions play nicely with others. Going forward, this is going to be even more crucial to success. As businesses modernize the major pillars of their technology solutions, such as their ERPs or other omnichannel distribution solutions, they’ll need solutions that can slot into the new ecosystem seamlessly. 

How to Find the Right Last Mile Delivery Solution for e-Commerce Cost Optimization

Retail distribution and ecommerce logistics are increasingly driven by technology, and that trend is only going to accelerate in the next few years. That means that the future of retail logistics lies in smart delivery solutions that can effectively future-proof delivery and distribution processes. 

If you’re undertaking a modernization process to try and future-proof your supply chain for the digital era, here are a few best practices for the finding the right solution:

• Look at the track record: a provider who can demonstrate not just value but a strong history of implementation support, technology partnership, and innovation can put you in a strong position to see value quickly and adapt easily to changing conditions.
• Select for SaaS and AI-powered platforms: the future of retail distribution will be defined by these technologies, so any technology choices you make in the near-term should reflect that by erring on the side of platforms that incorporate SaaS and AI capabilities. 
• Focus on customer experience: everything ultimately comes back to the customer, which is why it’s crucial to consider your technology choices from a CX angle at every stage of the process. 

That’s not an exhaustive list, of course. If you want to learn more about how to ensure your retail logistics processes are poised to adapt and scale with future challenges, talk to one of our experts today.