There’s a hot new job in technology race: Delivery Guy

 

26-NOV 2013 TUESDAY

 

 

 

Fermin Andujar, left, a valet for eBay Now, drops off items for customer Karen Horowitz in New York. Photo: Tina Fineberg/NYT

As holiday shopping season gets underway, same-day delivery has become a new battleground for e-commerce.

For all the sophisticated algorithms and proprietary logistics software involved, many services come down to someone like Fermin Andujar, who finds himself racing to a store, scanning the aisles for the requested items, buying them and rushing them to the customer.

According to eBay Inc.’s job description, he is a “valet”, dispatched on New York streets as a personal shopper on a bicycle or in other cities in a car.

The app for eBay Now, the company’s local shopping service, promises that valets will complete a shop-and-drop-off not just in the same day but “in about an hour,” a timetable crucial to the company’s intensifying efforts to one-up Amazon.com Inc. in the delivery game.

It wasn’t so long ago that overnight delivery seemed amazing enough. Then Amazon started building huge warehouses—what it calls “fulfillment centers”—near major cities, in a spokeswoman’s words, to be “as close to customers as possible”. With 40 such centres in the US encompassing more than 80 million square feet of storage space and employing 20,000 full-time workers, Amazon offers same-day delivery in 11 cities.

eBay, which last month announced plans to expand the enterprise to 25 cities, and other businesses, including Google Inc.’s nascent shopping service and startups like Deliv, have a different model: Use existing stores or “retail partners” as distribution centres and beat Amazon in the race against the clock.

On a recent afternoon, Andujar was waiting in eBay’s “valet lounge”, when his iPhone emitted a horn-like blast. A three-item order had come in for Babies “R” Us, listed on his screen in daunting specificity:

—1 Philips Avent 9-ounce BPA-free natural polypropylene bottles, pink, three-pack.

—1 Huggies Little Snugglers jumbo — Size 1 — 40 count.

—1 Carter’s super soft dot changing pad cover — ecru.

The store was downtown. The customer was uptown.

Andujar strapped on a giant backpack and sped off on his single-speed bicycle through city traffic. Five minutes later, he locked his bike to a bus stop sign. (In most other cities, the valets drive cars.)

With an assurance atypical of a 19-year-old man in a baby supply store, he strode straight to the baby bottle aisle and located the requisite Avent three-pack. Next stop, the diaper aisle. A few minutes later, the Huggies and changing pad cover were in his hands.

Adjusting the teetering stack of merchandise in his arms, he headed to the next stage of his mission: standing in line.

Six customers were ahead of him. He waited calmly, paid quickly with a company credit card (total $64.53), placed the goods into his backpack and started pedaling uptown.

With about 10 minutes to spare, Andujar arrived at his destination, where the customer, Karen Horowitz, was waiting in her ninth-floor apartment while her five-week-old baby napped.

Horowitz said she had decided to try eBay Now, which costs $5 a delivery and requires a minimum order of $25, after friends recommended it. She loved a feature on the app that let her track the valet. “I was watching her on the monitor,” she said of her sleeping daughter, “and him en route. I was really surprised how fast he was.”

While it seemed unlikely that eBay could make money on orders like this one, Mulpuru said a longer-range goal would be “locking in” that customer, and indeed, Horowitz said she would order again.

“One thing Amazon has done very successfully,” Mulpuru said, “is they’ve owned the entire value chain. They’ve owned the last mile, the moment that matters. That moment is when the package arrives.” She concluded: “Once you can own the moment that matters, you build a loyal customer base.”

Years ago, similar endeavors imploded. Webvan, UrbanFetch and Kozmo (which was backed by a $60 million investment from Amazon) were seen as follies of the early dot-com era, brought down by high labor costs and unrealistic pricing. Today, companies are scrambling to find the right new formula.

Deliv uses a crowdsourcing approach, tapping students, real-estate agents, aspiring actors and others with spare time and a vehicle. eBay recently announced plans to acquire for an undisclosed price Shutl, a London company that uses technology to pair couriers at hundreds of firms with local orders for delivery. The postmates.com, a startup that operates in New York, San Francisco and Seattle, has been adding 100 to 200 couriers a week, but it recently instituted “surge pricing” when demand for deliveries outstrips the supply of couriers.

Daphne Carmeli, Deliv’s founder and chief executive, said she thought the high concentration of big national retailers in shopping malls made them targets for growth.

“If you look at the top 100 retailers in country, they have 100,000 points of distribution,” she said. “They have a square footage that dwarfs Amazon.”

Deliv recently signed an agreement with General Growth Properties Inc., a large mall operator, to execute same-hour and same-day scheduled deliveries from stores in four of its malls. More, Carmeli said, will follow. ©2013/the new york times

 

ABHISHEK KUMAR

 

PGDM 1ST YR