COVID-sprawl noun the movement of residents away from urban centers to less densely populated areas as a result of the COVID-19 pandemic.
As the shutdowns and stay at home orders swept the nation, millenials and Gen-Xers began the exodus from densely populated cities to more suburban and rural areas. As they continue to flee, they’re taking their shopping habits with them. Millennials account for 30% of retail sales, about 60% of which are made online.
How can you prepare for the effects of COVID-sprawl on your last mile?
Why are they fleeing?
Typically lured into the city by the hustle and bustle of never ending activities, amenities, and job opportunities, the pandemic quickly eliminated many of the “pros” to city living. They were left with over-priced rent for small housing located far away from family members.
They’re now working from home.
As of June, 42% of people were working from home — about ⅔ of the U.S. economy. Since then, many large companies like Google and Facebook have committed to leaving employees at home for at least a year, allowing them to commit to year long leases that do not have to be in commuting distance to their office.
Lower cost of living
This year, New York City, with its sky-high rents and shoebox apartments, saw a 100% increase in people filing a change of address compared to 2019. With the companies that drove people to live in these cities allowing them to work from home, nothing is tying down residents any longer.
Moving outside the larger cities to suburbs and rural areas can save thousands of dollars every year, in rent and amenities — money that will likely go back into the economy in the form of consumer goods purchases.
Suburban and rural life can not only cost less, but it provides the fresh air and space to roam that a city does not. During the pandemic, residents of large cities were confined to their small homes, without yards to escape to. This highlighted the importance of outdoor access to many city residents.
Implications for your last mile
As more millennials and Gen-Xers move out of your primary markets, the requirements on your last mile will change.
With a lower cost of living and more pocket money, these consumers are likely to start spending it on products. During the pandemic, online shopping saw increases from demographics that were not accustomed to ecommerce. Millenials and Gen-Xers, however, are no stranger to the “add to cart” button.
As they reduce their living expenses, they’ll have more freedom to shop… online, resulting in more deliveries.
These orders will be going out of your primary markets and into your secondary and tertiary markets.
As more of these consumers move to the ‘burbs, taking their new found expendable money and online shopping habits with them, you will see an uptick in orders going to these locations. These suburban and rural areas will be away from your primary delivery markets, which may see a reduction in capacity needs.
How to prepare your last mile
As this phenomenon continues, stay ahead of competitors by preparing your last mile now.
Find fulfillment centers closer to your secondary and tertiary markets. Utilizing now closed retail stores or warehouses that are in a reasonable proximity to your customers will cut down last mile costs and delivery times.
Prior to the pandemic, the availability of next or same-day delivery was a priority to these shoppers. This is not likely to change as they move out of major cities.
Preparing additional capacity in your secondary markets. As these markets were considered less crucial than your primary markets, you are likely going to face a large capacity deficit as demand increases in these areas.
Establish relationships with additional carriers in these markets to build capacity for your last mile before it’s too late.
We’re ready to help
eTrac has what you need to prepare for COVID-sprawl. With an extensive carrier network, you can grow last mile capacity in any market without implementation delays. Learn how to gain access to this flexibility capacity and our complete network here. Then, use reporting tools to see where your orders are going and track carrier compliance, allowing you to improve service faster.
See the best way to reach your last mile by scheduling a demo here.