By Greg Bettinelli / www.supplychain247.com / February 25th, 2016
Same-day delivery startup Deliv Inc. is getting a funding boost from an unlikely source: United Parcel Service Inc.
We are living in an era of unprecedented and ever increasing consumer expectations, with immediacy and seamless user experiences the new normal.
But for most legacy brands and businesses, this level of execution is a bar very tough to clear.
This is particularly true in the retail sector, where Amazon has cemented not only its “everything store” reputation, but also its position as the clear leader among retailers in terms of rapid fulfillment and scale.
But while traditional retailers have faced obvious headwinds in this environment, they also possess some genuine and sometimes unappreciated advantages.
One such advantage is the visibility and local reach afforded by a nationwide brick-and-mortar footprint. Collectively, the Top-50 non-grocery retailers represent more than 125,000 doors (insider term for number of stores) across the US (and $1.3 trillion in – primarily offline – sales).
So in an era where “software is eating everything,” the multi-trillion dollar question is, how do retailers transform brick-and-mortar locations from a major liability to a strategic advantage? It seems obvious that the answer revolves around utilizing these locations, at least in part, as distribution centers so that they “out Amazon, Amazon”.
As more and more commerce moves online, these retailers must match the next-day and even same-day delivery speeds made commonplace by Amazon. Two years ago, we at Upfront bet that Deliv, with its fully-integrated last-mile same-day and scheduled delivery solution, would be the retailer friendly platform that would allow national retailers, ecommerce sellers, and SMBs to close this gap.
Yesterday, we took a major step toward leveling the retail playing field. Deliv has completed a $28 million Series B round of funding, adding a key strategic partner and investor in UPS (yes, that UPS), with ongoing support from existing investors and partners like Upfront Ventures, RPM Ventures, PivotNorth Capital, General Growth Properties, The Macerich Company, Simon Venture Group, Taubman Centers Inc, Westfield Labs, and others (those mall owners control most of the premium lifestyle shopping centers in the US).
When we first invested in mid-2013, it was an outstanding question whether consumers would choose to shop online through Best Buy or Macy’s, over Amazon if the former could offer cost-effective, flexible, same-day delivery. Today, that’s no longer a question.
Survey after survey indicates that just having the option of same-day delivery increases purchase conversion during the checkout process by 20-30%, even if the consumer doesn’t ultimately choose that option. At the same time, 75% of US internet users are demanding same-day delivery, with two-thirds willing to pay for the service.
Over the last several years, Deliv has established a network of partners across the nation. Today that list includes mall operators, national retailers, and SMBs, and collectively represents more than 20,000 US storefronts and $265 billion in annual sales. Consumers shopping on leading retailer websites like BestBuy, Footlocker, Kohls and Macys as well as ecommerce brands such as Warby Parker, FarFetch and Blue Apron can now request same-day delivery directly within their online checkout flow.
These orders are then seamlessly fulfilled by Deliv from a local brick-and-mortar location, with consumers able to schedule and track the progress of every package. As important, there are many more new retail partners to come.
It’s not a stretch to say that this is a major improvement from traditional experience of waiting days for your item to make its way from a far off distribution center, and having no idea when it will arrive at its destination.
Also, from the merchant perspective, Deliv stands out from competing on-demand delivery solutions in that it does not disintermediate the consumer relationship. Instead, Deliv offers enterprise-grade integrations into point of sale (POS), inventory management, and warehouse management (WMS) systems, but consumers still purchase directly from their retailer of choice. The importance of this distinction cannot be understated, a fact that the market is only now beginning to realize.
Today, on-demand delivery is still a “premium” option, available from just 15 percent of all retailers. For those merchants looking to compete in the modern, instant gratification world, same-day delivery has gone from a “nice to have” to a “must have.”
With the backing of global logistics leader UPS, I believe Deliv can be the platform that powers this new on-demand future.
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