Hot Take Series: Last-Mile Delivery Growth Trends

Last-mile delivery continues to evolve at a breakneck pace, and the industries embracing it fastest aren’t always the ones you’d expect. From retail to pharmacy, the race to provide faster, safer, and more reliable delivery is reshaping customer expectations and creating new battlegrounds for growth.

Retail Takes the Lead

When asked which industry is growing fastest, Janet didn’t hesitate: “Non-food retail is the standout growth sector in last-mile delivery.”

She pointed to two main forces driving this acceleration. First is the potential for margin leverage. As she explained, “Retailers often sell a broad SKU base, where faster delivery can directly drive upsells, reduce cart abandonment, and improve customer retention. Sophisticated retailers know to optimize higher margin SKUs as recommendations via ecommerce and grow order sizes. Then investment in delivery can unlock margin gains rather than just being a cost center.”

Second, omnichannel pressure is mounting. “Traditional brick-and-mortar retailers are under worsening pressure from pure e-commerce players, and consumers have come to expect lightning-speed fulfillment even when shopping with legacy brands,” Janet said. This pressure makes delivery infrastructure less of an option and more of a necessity.

A Surprising Challenger: Pharmacy

While retail’s rise may not surprise many, pharmacy has emerged as an unexpected growth story. “Yes, we’ve been pleasantly surprised by how pharmacy space has ramped up expectations and usage of last-mile,” Janet shared.

Historically, regulation and safety concerns made pharmacy deliveries a challenging category. But those barriers are falling fast. “With consumer demand, especially among older or mobility-constrained populations, both pharmacy chains and independents and digital health players have pushed into same-day and white-glove delivery,” she explained. What was once viewed as a hurdle is now increasingly seen as a competitive differentiator.

Scale vs. Specialization – Or Both?

When it comes to what businesses want from last-mile delivery partners, Janet sees a shift away from “either/or” thinking. “I want to say a hybrid, so let me explain. Our partners are looking for scale in the specialization, not just generalized scale or hyper-niche specialization alone.”

That means coverage must be broad enough to span metro, suburban, and even rural regions—avoiding the patchwork solutions that frustrate national retailers. But alongside scale, specialized capabilities are increasingly non-negotiable. As Janet put it, “Many clients require specialized capabilities: temperature control, regulatory handling, high-value secure delivery, white-glove installation, et al. A pure generalized fleet can’t reliably serve those needs well.”

The winning formula is a hybrid model: broad geographic reach embedded with specialized capabilities. Janet calls this “scale in the specialization”—and she sees it as the model gaining traction across industries.

The Fiercest Battleground Ahead

Looking out over the next 2–3 years, Janet sees one industry as the arena for the fiercest competition: retail. “If I had to pick one vertical that will be the fiercest last-mile battleground in the next few years, I’d bet on retail (general merchandise and omnichannel brands),” she said.

Why retail? The reasons stack up quickly. “It has the broadest scale potential. Nearly every large retailer is either ramping or upgrading its delivery stack. It’s under intense competition. Brands will compete on delivery experience (cost, speed, transparency, flexibility) as a table-stakes differentiator.”

And the stakes go beyond customer expectations. “In that sense, last-mile for retail becomes not just a cost center, but a competitive moat. I expect we’ll see fierce competition, consolidation, and product-level arms races (to call some out: 1-hour delivery, predictive shipping, robotics) in that space.”

What It Means for the Market

As retail pushes harder, adjacent industries will take cues and adopt many of the same delivery innovations. Pharmacy and grocery-adjacent categories, for example, are already adapting models born in retail. The infrastructures are converging, and the companies that succeed will be those capable of scaling while also tailoring specialized experiences for vertical-specific needs.

The takeaway? The next phase of last-mile will not be won by generalists or niche players alone, but by those who can marry breadth with depth—creating national networks infused with specialized capabilities.