Following our event in London, the ZX.YCN programme brought the discussion on Doors, Drones & Deliveries to New York on the 25th April. With a panel of four experts in the field, we unpacked how innovations in last mile delivery are providing unparalleled convenience, customer delight and are boosting bottom lines.
Joining our panel to share stories, experiences and opportunities were UberEATS Product Manager Chetan Narain. Having launched the official app in 2016, Uber’s food delivery service arm has gone from strength to strength, now spanning 65 cities worldwide.
Chetan was joined by Matt Rotella, Business Developer at food delivery startup DoorDash. With its own last-mile logistics infrastructure, the startup has already received more than 10 million food orders.
We also heard from Taylor Burton is VP of Strategic Partnerships at online alcohol delivery service, Drizly. By partnering with local retailers, Drizly brings beer, wine and spirits to customers across North America. The company began by delivering alcohol on-demand, but last year expanded its offering to give users the choice between a variety of different delivery options and prices.
Pooja Agarwal, Vice President of Operations at Birchbox, also shared learnings on the topic. Responsible for logistics, supply chain and subscription operations, she’ll share an insight into the processes that allow Birchbox to deliver its personalised beauty boxes to subscribers each month.
The restaurant delivery race
The restaurant market is worth $700bn, with takeout and delivery only making up a fraction ($70bn) of the market, according to Uber’s Chetan. The majority of that slice is made up of big brands like Domino’s and Pizza Hut (50%) and direct consumer-restaurant takeaways (20-30%).
“All of the apps, from GrubHub to UberEATS to DoorDash, we’re playing in this actually very small segment of the overall food delivery market, which is itself a very small segment of the overall restaurant market,” explained Chetan. “The primary goal for a lot of us is to help grow this food delivery pie. Part of the way of doing that is to help get to price parity with the experience that you would get if you were to go to a restaurant.” Taylor from Drizly agreed. “When it comes to pricing, users want to pay the same price that they see in stores.”
DoorDash’s Matt explained that they are finding ways to improve pricing as the businesses grows. “As delivery volume ramps, as all of our logistics technology gets better, that means that there’s ways to lower delivery fees, in some cases lower pricing, to make it more palatable.”
When questioned on the crowded nature of the restaurant delivery space, Matt explained that he believes there will eventually be consolidation. “Whether it be through acquisition or attrition, there will be more concentrated players in the next 12 months,” he said. “But I think there will definitely be a world for niche players who are delivering specific verticals.”
Creating a moment
As a beauty subscription box, Birchbox’s approach to delivery is quite different from that of the other panelists. As one audience member (and Birchbox subscriber) put it, the service is like getting “a present every month”. Pooja elaborated. “For us, [delivery] is less about how quickly you can get it to the subscriber and more about creating a moment in the space.”
Birchbox fans love discussing and comparing their personalised boxes on social media. In order to maximise engagement and excitement, the brand carefully orchestrates delivery so that subscribers across the country receive the boxes at roughly the same time. This “moment” is very powerful but can easily go wrong if timings aren’t right.
“We have learned that people really hate it when you ruin a surprise, so if we mess up that window, people are not pleased with us,” said Pooja. “People will get mildly excited if you do something well, but really pissed if you do something wrong.
So for us it is a juggling act, where it is about speed, but also about creating a moment in this space for our subscribers.” The company is investing in automation that would make the logistics much easier, especially as it continues to scale.
Technology enabled transparency
For all panelists, technology plays a major role in providing a standout service. For example, it enables the ability for both customers and retailers to track the whereabouts of delivery in real time.
This level of transparency has come to be expected by today’s consumer. “I think tracking is just a given now,” said Pooja. “I don’t think it’s an option anymore as a company whether or not you invest. There’s just a basic level of, ‘I need to know where my package is at all times and when I can expect to get it’ for customers. Whether they’re paying $10 or $2000, people want to know where that box is.”
Tracking can also help couriers perform more efficiently. For example, Uber has created Pathfinder tool that helps drivers pinpoint locations and achieve quick handovers once they have arrived at a destination.
Drizly has also created an “Uber-style” tracking app for its drivers. Taylor explained that alcohol has been relatively late to the delivery game, so has been able to take learnings from other models.
One fundamental consideration unique to the drinking sector is age verification upon delivery. Drizly has created a proprietary forensic ID scanner. “What that’s ensuring is basically that a) that user is 21+, and then b) we have a record of that,” said Taylor. “If a regulator questioned whether a sale was legitimate, we have a digital paper trail.”
Thanks to our panel of experts and some smart questions from the audience, the evening provided great insight into innovative delivery systems, building on what we discovered at our event in London. Soon we’ll post a detailed briefing digging into the topic even further.