Dive Brief:
- Deliv, a same-day delivery startup working with roughly 4,000 retailers that compete with Amazon, has announced its expansion from 19 to 33 markets and 1,400 cities, TechCrunch reported last week.
- The service allows retailers such as Best Buy, Bloomingdale's, BloomThat, Fry’s Electronics, K&L Wine Merchants, Office Depot, PetSmart, Macy’s, Plated and The UPS Store to gain same day delivery, whether in a one, two- or three-hour window.
- Deliv also offers Deliv Fresh for groceries as well as an alcohol delivery service. Its most recent round of funding reached $28 million, invested by Amazon competitors such as UPS and retail property and mall operators GGP and Simon Property Group.
Dive Insight:
To effectively compete with Amazon, retailers must incorporate quick delivery at a minimal cost.
In 2016, Amazon absorbed a reported $7.2 billion in shipping costs, a number beyond the reach of most retailers, who must charge at least an incremental $5.99 to break even, despite retaining profit from the item shipped. To compete, retailers are reaching out to last-mile experts such as app-oriented Dropoff and others to manage their efforts. Industry experts advise against attempting to replicate the Amazon experience, instead focusing on brand-oriented, heavy consumer interaction.
Because Deliv and other last-mile services like it do not offer their own products, retailers feel safe establishing a strong relationship with the company. And as the e-commerce market is expected to continue its rapid growth throughout the holiday season, delivery firms are preparing to meet demand: according to The Wall Street Journal, the parcel handling industry has added an additional 7,000 jobs within eight weeks, and more than 30,000 jobs since this time last year.
Those numbers reflect an increasing reliance in outsourcing, as the more delivery-based sales a retailer generates, the lower the cost to the company. If a retailer must offer free and fast delivery, doing so en masse will help them save in the end.
