Why Retail Giants Are Investing in Automation for Smarter Deliveries (And How Mid-Sized Businesses Can Compete)

The world of delivery logistics has seen rapid change over recent years. Retail giants like Amazon and Tesco have invested heavily in automation to streamline operations, reduce costs, and improve efficiency. And with increasing customer expectations for fast, reliable deliveries, automation, this approach is no longer a luxury, it’s a necessity.

This shift poses both a challenge and an opportunity for mid-sized businesses. Whilst large retailers have the resources to build bespoke automated systems, automation and route optimisation solutions are now more accessible than ever. Businesses that embrace these tools can improve efficiency, reduce operational costs, and compete with the industry’s biggest players.

How Retail Giants Use Automation for Smarter Deliveries

Automation is at the heart of modern logistics. From warehouse robotics to real-time delivery tracking, major retailers are using technology to optimise every stage of their supply chain.

Amazon’s Automated Logistics Network

Amazon has built one of the most advanced logistics networks in the world, largely thanks to its investment in automation. The company’s fulfilment centres rely on thousands of robotic systems, developed by Amazon Robotics, to speed up operations and reduce reliance on human labourbots work alongside warehouse staff, picking, packing, and moving goods at a pace no human workforce could match alone.

Beyond the warehouses, Amazon uses sophisticated automation for delivery operations. Their AI-driven routing system continuously recalculates optimal delivery routes based on real-time data, including:

• Traffic conditions – Adjusting routes to avoid congestion.
• Weather forecasts – Ensuring drivers take the safest and fastest routes.
• Customer locations – Prioritising deliveries based on proximity and urgency.

Amazon is also pushing the boundaries of autonomous delivery, with trials of Amazon Prime Air (drone deliveries) and Amazon Scout (self-driving delivery robots) aimed at reducing delivery times and costs. These innovations operate at a level of efficiency that mid-sized businesses must find ways to match.

Tesco’s Investment in Automated Delivery Systems

In the UK, Tesco has been a leader in automating its delivery network, particularly in the online grocery sector. With the rise of online shopping, Tesco has had to rethink its logistics strategy, investing in automation to meet demand while keeping costs under control.

Automated Fulfilment

To handle the surge in online grocery orders, Tesco operates highly automated urban fulfilment centres (UFCs). These robot-powered warehouses, located within existing supermarkets, allow for faster picking and packing of online orders. Unlike traditional warehouse operations, UFCs use:

• Automated conveyor belts to move products quickly.
• AI-driven order management systems to prioritise packing based on delivery slots.
• Optimised picking routes that reduce worker travel time in the warehouse.

Delivery Slot Optimisation

Tesco has also developed an AI-powered scheduling system that ensures delivery vans are filled to maximum efficiency before leaving for their routes. This prevents half-empty vans from making unnecessary trips and helps reduce fuel costs and emissions.

Investment in Electric and Autonomous

Tesco has been actively introducing electric delivery vans and autonomous vehicle technology to improve sustainability. By reducing reliance on traditional petrol and diesel vans, they are lowering both costs and their environmental impact, a strategy that more mid-sized businesses will need to embrace in the near future, if not immediately.

The Challenges for Mid-Sized Businesses

Whilst large retailers can afford multi-million-pound automation projects, mid-sized businesses often struggle to compete. Many still rely on manual processes, which are increasingly inefficient in a fast-moving, high-demand environment.

Here are some of the biggest obstacles mid-sized businesses face in delivery logistics:

1. Inefficient Route Planning

Many businesses still rely on manual route planning or outdated software, leading to:
❌ Unnecessary mileage
❌ Poor vehicle utilisation
❌ Higher fuel costs

Without automation, businesses waste valuable resources simply trying to get deliveries from point A to B in the most efficient way.

2. Rising Operational Costs

Fuel prices, driver wages, and vehicle maintenance costs continue to increase. Without optimised delivery routes and fleet management, businesses lose money on inefficiencies that could be easily avoided.

3. Delivery Driver Shortages

The UK has faced an ongoing shortage of qualified drivers, and inefficient route planning can make matters worse by overloading staff with unnecessary extra miles and poor scheduling. This leads to burnout, high turnover rates, and recruitment challenges.

4. Increased Customer Expectations

Amazon, Tesco, and other major retailers have raised the bar for fast, accurate deliveries. Customers now expect:
🚀 Next-day or same-day delivery
🚀 Real-time delivery tracking
🚀 Precise estimated time of arrival (ETA) updates

Mid-sized businesses that fail to meet these expectations risk losing customers to larger, more efficient competitors.

How Route Optimisation Helps Mid-Sized Businesses Compete

Route optimisation is one of the most effective ways to introduce automation into delivery operations. By automating and optimising delivery routes, businesses can cut costs, improve efficiency, and provide a better customer experience.

1. Maximising Delivery Efficiency

Optimised routes ensure deliveries are planned in the most efficient way possible, reducing:
✅ Unnecessary mileage
✅ Wasted driver hours
✅ Fuel consumption and emissions

Mid-sized businesses can increase the number of deliveries per day without adding extra drivers or vehicles, boosting profitability and service levels.

2. Reducing Costs Through Smarter Planning

Fuel and labour costs are two of the biggest expenses in logistics. However, route optimisation helps businesses:
🔹 Reduce mileage, saving on fuel costs
🔹 Improve driver productivity by minimising idle time
🔹 Avoid late deliveries, reducing customer service costs and compensation claims

3. Improving Customer Experience

Consumers expect accurate delivery times and real-time updates. Route optimisation allows businesses to:
🚀 Offer precise ETAs based on real-time traffic data
🚀 Reduce missed or late deliveries
🚀 Improve first-time delivery success rates, reducing the cost of failed attempts

4. Automating Route Adjustments in Real Time

Unexpected delays happen: traffic jams, road closures, last-minute customer changes. Route optimisation tools automatically adjust routes to:
🔄 Reroute drivers to avoid delays
🔄 Prioritise urgent deliveries
🔄 Notify customers of updated delivery times

This level of automation keeps deliveries on track without requiring manual intervention, making operations more resilient and efficient.

The Future of Automated Deliveries – Why Now is the Time to Invest

The delivery landscape is evolving rapidly, and mid-sized businesses must act now to stay competitive. Here’s why investing in automation and route optimisation is critical:

1. Growing Industry Standards for Fast Deliveries

With next-day and same-day delivery becoming the norm, businesses that fail to automate will struggle to keep up.

2. Sustainability & Fuel Efficiency

With the UK’s push towards net-zero emissions, delivery operations must become more fuel-efficient and environmentally friendly.

3. Competitive Advantage

Mid-sized businesses that adopt automation and optimisation tools will gain a clear competitive edge.

Ready to Automate Your Deliveries?

Route optimisation is one of the easiest and most effective ways to reduce costs, improve efficiency, and compete with the retail giants.

Want to see how it works? Book a demo today and discover how MaxOptra’s route optimisation solution can transform your delivery operations.