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Exclusive: Deliv CEO dishes on crowdsourced delivery

BY CSA STAFF

Chain Store Age recently spoke with Daphne Carmeli, CEO of Deliv, to get her perspective on what’s going on in the rapidly growing online delivery space.

What is driving growing consumer interest in online delivery?
We’ve got a bunch of players in the industry who are aggregating inventory in a simple, flexible and cost-effective way for last-mile fulfillment. Companies like Amazon and Google are resetting customer expectations of what’s possible.

As with so many things, Amazon has been a leader in defining online delivery. With Amazon Prime, two-day delivery became standard. Now same-day delivery is standard. Amazon is a master of creating the best customer experience and is often at the forefront of innovation. In online delivery, Amazon is leading the way with development of drones, as well as anticipatory algorithms that prepare to ship goods to your home before you know you want to order them.

Online delivery is all about customer experience. Once customers get it, they want to continue to get it. The toothpaste is out of the tube.

What challenges are facing online delivery providers?
Different challenges are facing online delivery providers with different business models. Delivery providers who operate an online marketplace where you download an app or visit their site to buy products are finding that one of their largest costs is customer acquisition.

Also online marketplace customers are most focused on demand – they want a delivery in half an hour. That might work for coffee or lunch, but for point-to-point deliveries you can’t pick up 10 orders, even if they are already prepared. It’s very expensive with no way to scale.

How is Deliv’s model different?
Deliv’s model is a business-to-business model. We plug in as an option on the retailer’s checkout page. We’re not paying for customer acquisition. Most people schedule deliveries two to three hours from when they place their order. Our number one value proposition is predictability.

Delivery drivers might take a three-hour route, so cost per delivery is less. The retailer’s store serves as the warehouse. A driver making a pickup at a mall might make deliveries for eight to 10 retailers there.

Also, we are asset-free. We operate no warehouses or trucks and own no inventory. Deliveries are crowdsourced according to demand using the contractors’ cars.

Will retailers continue to rely on third-party online delivery services or do more of it themselves?
It doesn’t make sense for a retailer to lay down all the plumbing across the country. Not one retailer has enough scale to do that — maybe Wal-Mart, but they still use third-party partners. If you have 1,000 stores across the country, how many deliveries per store per day will you need to do?

UPS recently participated in an investment round in Deliv. What is the significance?
It’s a vote of confidence when the world’s largest logistics provider sees the online delivery space as significant for future innovation. [Editor’s Note – Carmeli declined to comment on any potential future collaboration between UPS and Deliv.]

What trends do you see developing in online delivery in the next 12-24 months?
There will be more people with more delivery stops, meaning a lower cost per stop for collaborative delivery providers like Deliv. But online delivery is solving a problem where there won’t be changes in where the opportunity lies. Two years from today, consumers won’t be saying they want to spend more money to have it take longer to get a product.

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Surging Dollar General to open record number of stores in 2016

BY Mike Troy

Dollar General reported record sales and profits last year and plans to extend the streak in 2016 with 900 stores and an even greater number in subsequent years, according to the company’s new financial targets.

In 2015, Dollar General opened 730 new stores and remodeled or relocated 881 stores which combined with a 2.8% same store sales increase allowed it to grow total sales 7.7% to $20.4 billion. The company ended its fiscal year on Jan. 29, with 12,483 stores.

Opening 900 stores a year is a daunting challenge, but Dollar General will likely exceed that figure in 2017 and beyond based on a new long-term financial guidelines the company shard with investors. Plans call for annual sales growth in the range of 7% to 10% driven by the combination of square footage growth between 6% and 8% and same-store sales growth of 2% to 4%. The topline growth will translate to earnings per share growth of 10% to 15 and once dividends are included the total return to shareholders will range from 11% to 17%, according to the company.

The new targets were spelled out with the release of fourth quarter results which capped off what Dollar General CEO Todd Vasos said was another great year for the company.

“For the 26th consecutive year, we delivered positive same-store sales growth. In the fourth quarter, we effectively balanced sales and operating profit through our toughest quarterly comparison of the year to deliver record results leading to full year diluted (earnings per share) growth of 13%,” Vasos said. “Looking ahead, Dollar General continues to have significant opportunities for growth. Considering the financial results we have delivered over the last three years and consistent with how we are managing the business, our growth model is focused on increasing long-term shareholder value by driving profitable sales growth, capturing growth opportunities, enhancing our position as a low-cost operator and investing in our people.”

Sales in the fourth quarter increased 7% to $5.3 billion and same-store sales increased 2.2% due to growth in customer traffic and transaction size. Net income for the period was $376 million, or $1.30 a share, compared to net income of $355 million, or $1.17, in the 2014 fourth quarter.

Departments with the most significant sales increases were said to be candy and snacks, perishables, tobacco, and food. Growth in the non-consumable category was broad-based with notable strength across seasonal and home, offset by a modest decline in apparel, according to the company.

Dollar General’s annual sales increased 7.7% to $20.4 billion and full year profits increased 9% to $1.17 billion, or $3.95 a share.

As was the case in the fourth quarter, departments with the most significant increases in net sales were candy and snacks, perishables, tobacco, and food. The full year comp increase of 2.8% was driven by increased customer traffic and larger transaction sizes. The company said it realized those benefits because of a refinement in merchandise offerings and increased usage of total square footage.

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Value and convenience driving Dollar General’s record growth

BY CSA STAFF

Dollar General reported record sales and profits last year and plans to extend the streak in 2016 with 900 stores and an even greater number in subsequent years, according to the company’s new financial targets.

In 2015, Dollar General opened 730 new stores and remodeled or relocated 881 stores which combined with a 2.8% same store sales increase allowed it to grow total sales 7.7% to $20.4 billion. The company ended its fiscal year on Jan. 29, with 12,483 stores.

Opening 900 stores a year is a daunting challenge, but Dollar General will likely exceed that figure in 2017 and beyond based on a new long-term financial guidelines the company shard with investors. Plans call for annual sales growth in the range of 7% to 10% driven by the combination of square footage growth between 6% and 8% and same store sales growth of 2% to 4%. The topline growth will translate to earnings per share growth of 10% to 15 and once dividends are included the total return to shareholders will range from 11% to 17%, according to the company.

The new targets were spelled out with the release of fourth quarter results which capped off what Dollar General CEO Todd Vasos said was another great year for the company.

“For the 26th consecutive year, we delivered positive same-store sales growth. In the fourth quarter, we effectively balanced sales and operating profit through our toughest quarterly comparison of the year to deliver record results leading to full year diluted (earnings per share) growth of 13%,” Vasos said. “Looking ahead, Dollar General continues to have significant opportunities for growth. Considering the financial results we have delivered over the last three years and consistent with how we are managing the business, our growth model is focused on increasing long-term shareholder value by driving profitable sales growth, capturing growth opportunities, enhancing our position as a low-cost operator and investing in our people.”

Sales in the fourth quarter increased 7% to $5.3 billion and same store sales increased 2.2% due to growth in customer traffic and transaction size. Net income for the period was $376 million, or $1.30 a share, compared to net income of $355 million, or $1.17, in the 2014 fourth quarter.

Departments with the most significant sales increases were said to be candy and snacks, perishables, tobacco, and food. Growth in the non-consumable category was broad-based with notable strength across seasonal and home, offset by a modest decline in apparel, according to the company.

Dollar General’s annual sales increased 7.7% to $20.4 billion and full year profits increased 9% to $1.17 billion, or $3.95 a share.

As was the case in the fourth quarter, departments with the most significant increases in net sales were candy and snacks, perishables, tobacco, and food. The full year comp increase of 2.8% was driven by increased customer traffic and larger transaction sizes. The company said it realized those benefits because of a refinement in merchandise offerings and increased usage of total square footage.

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