Location: Atlanta, Ga.
Modern: We’ve just come through the peak holiday season, a time when we’re all obsessed with receiving our stuff from e-commerce companies in two days or less. In fact, that’s the genesis of on-demand delivery. Give us your take on this new supply chain practice.
Harris: On-demand delivery is becoming table stakes for many companies as it connects businesses and people. It’s all about surprising and delighting customers, which means that it is focused on building customer loyalty. So many people used to think three- to five-day delivery was good enough even as Amazon moved to two days with Prime. On-demand delivery makes two-days seem too long. On-demand is more in the three- to five-hour window. That may be fine for grocers and local retailers, but for restaurants, even delivery in three to five hours doesn’t cut it. You’re talking here of a matter of minutes.
Modern: This sounds a lot like last-mile delivery. What’s the difference?
Harris: On-demand is really a subset of last mile. The companies that provide delivery services for both are quite different. Last-mile delivery is typically done by large corporate delivery fleets from UPS, FedEx and the like. In Atlanta, some of the on-demand delivery companies are startups like Roadie, Zifty and TommyRun. The two groups run their businesses quite differently. Final mile companies have dedicated fleets and schedule deliveries through a regional or central office. On-demand delivery relies on a crowd-sourced, collaborative delivery network. They have no dedicated fleet but request deliveries from a network of people who are assigned deliveries through an app on smart phones and tablets. Uber and Lyft drivers are part of this as are other independent drivers and couriers, even some on bikes.
Modern: Through your Supply Chain Leadership Council, you must have a good view of the on-demand delivery landscape in Atlanta. Tell us a little bit about some of the leaders there.
Harris: Before I get into specific companies, I want to point out that the bigger the metro area, the bigger the on-demand delivery infrastructure. People, especially those in metropolitan areas, are getting spoiled with on-demand delivery. In a way, on-demand delivery was probably inevitable once Amazon Prime arrived. People just want things faster and faster. It becomes something we have to have. The leading companies in Atlanta, in no particular order, are Roadie, Kanga, Instacart, Zifty and TommyRun. Roadie focuses on deliveries for retailers such as Macy’s and grocers such as Kroger. Roadie even has Delta as a client for the home delivery to passengers of luggage that went astray. Zifty and Instacart focus on food, the former on restaurants and the latter on grocers. And TommyRun delivers for the construction industry. So many job sites are short supplies that can bring construction to a halt temporarily. Of course, all of them manage deliveries for companies outside these niches.
Modern: That’s pretty impressive. I hadn’t considered how many businesses on-demand delivery already touches. What else am I missing?
Harris: This will probably surprise you, too. Roadie, which is headquartered in Atlanta but operates nationally, has already made deliveries in more than 11,000 towns in America. That’s more than what Amazon Prime has done. Pretty amazing. So, while Amazon Prime is focused on the major urban areas in two days, Roadie is focused on every town between Atlanta and Destin, Fla., for instance. That’s a lot of towns. Now some of those deliveries do take two days. But, it’s an amazing capability.
Modern: Last month, we talked about on-demand warehousing. Is there any link between that and on-demand delivery?
Harris: There is, but they are quite different. Both are on demand and are in the early stages of building their networks to first store and then deliver inventory and orders. But on-demand warehousing is focused on space availability while on-demand delivery is focused on time.