Exclusive: Deliv CEO dishes on crowdsourced delivery

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.