Raconteur

Supply Chain 2015

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P15 RACONTEUR.NET /COMPANY/RACONTEUR-MEDIA /RACONTEUR.NET @RACONTEUR 1 i f t SUPPLY CHAIN ONLINE: WWW.RACONTEUR.NET/SUPPLY-CHAIN-2015 Interview DELIVERING CUSTOMER SATISFACTION Delivery may not be the easiest to do, but it's the one that's going to have the most impact F or Tom A llason, founder of the super-fast delivery service Shutl, it all started with an argument. After being dis - appointed by the courier company that he had used to deliver some- thing to a friend, he called the out- fit in question and spoke to its boss. Tempers flared, and Tom ended up telling the chief executive, in no uncertain terms, that he could do a better job himself. But it wa sn't a throwaway re - mark. Tom went on to start eCou- r ier – t he bu si ness-to -bu si ness company still exists, although he no longer has a stake in it – before act- ing on the intuition that the great- er opportunity lay in delivering to consumers. This led to the birth of Shutl in 2008, and a way to efficiently and intelligently connect online retail - ers with local courier companies, providing customers of Argos and other Shutl pa r tners w ith hig h- speed, same-day delivery. Shutl's fastest recorded delivery time is 13 minutes, but Tom says most deliveries that are request - ed for a s soon a s possible a rrive in about an hour. Consumers also have t he option to select a one- hour window at some point in the next day or so for the same price, which is comparable to the cost of the sta nda rd deliver y of fered by most online retailers. T he bu si ness d id su f f icient ly well to attract the attention – and cheque book – of eBay, which ac - quired it for an undisclosed sum in 2013. Tom, who was educated at Eton, ca me on boa rd too a nd, although he still heads up Shutl, he is now also "global head of local" at eBay. "It's a pretty oxymoronic job title," he admits. One of his chief responsibilities is to oversee eBay Now, the delivery option that uses Shutl's algorithms and method of grouping deliveries to give eBay customers in the Unit- ed States and elsewhere a Shutl-like experience. In tech takeover lingo, eBay Now is "powered by Shutl". SINGLE GREATEST INHIBITOR But why did eBay go to all that trouble to bring a Brit out to San Fra ncisco? A nd is it rea l ly t hat important for the delivery link in the supply chain to be harder, bet - ter, faster and stronger than ever before? For one thing, Tom says: "Delivery is still the single greatest inhibitor to conversion at a retail - er's checkout. It's the number-one reason given for not purchasing, beyond price. So solve that and in the short-term you have a compet - itive advantage. Ever yone meas- ures their last purchase experience against the best one they've had. So you have to aim for that." At a n event staged by WIR ED m a g a z i ne , Tom onc e i l lu s t r at - ed t h is poi nt qu ite elega nt ly by screening a clip of the curmudg- eonly cult comedian Louis CK who talks about being amazed when he had high-speed internet access on a flight for the first time. But then, a little later into the flight, the inter - net cuts out. Straightaway, the guy next to him curses with frustration. CK obser ves: " How qu ick ly t he world owes him something that he knew existed only ten seconds ago." "Consumers' expectations only move in one direction," Tom says. "Today, 0.1 per cent of consumers have had a same-day deliver y, so they 're not ex pecting it a nd not dema nding it. But w ith the likes of A ma zon, Google, eBay a nd a ll the biggest retailers in the space making this a priority, you can bet that a lot of consumers are going to experience it – and then expect it. Tom Allason (above), founder of Shutl, tells Edwin Smith how he sees the future of the delivery business To me, it seems inevitable." A nd it 's not just the big, estab- lished players that are changing the way people think about deliver y. Startups, such as Jinn, Postmates, Tok Tok Tok, Instacart and Wun - Wun, offer to deliver items almost i m med iately to consu mers who order through their apps. It's not a new idea; Kozmo, Urbanfetch and Webvan all offered a similar prop - osition, only to become cautionary tales of the dotcom bubble back in the early-noughties. CONCENTRATED DEMAND T h e r e a s o n t h o s e b u s i n e s s - es failed, Tom says, is they never reached the scale required to be- come suf f iciently cost ef fective. Back then the problem was a lack of internet users, which, today, isn't an issue, but the old hurdle remains – you need to have high, geographical - ly-concentrated demand. Without that it doesn't make economic sense. Tom also talks about click-and- collect, and low-cost services that are designed to allow commuters to pick up items at transport hubs while on their way home from work. "They certainly impact the cost side of things," he says. "But they don't really solve the problem of delivery – that I can't get what I want, where I want it, at a time that makes sense for me." The good news – for the consum - er at least – is that more effort than ever is being made to find a solu- tion. "We've been solving every oth- er part of the e-commerce funnel over the last ten years," says Tom, adding that the logica l approach so far has been to tackle these ele - ments in an order which has been determined by two main criteria: how important they are and how easy they are to fix. "It's finally got to the point where delivery may not be the easiest to do, but it's the one that 's going to have the most im - pact." Fu r t her i nto t he f ut u re, Tom says that drones and driverless cars may well come into play, but anoth - er answer might come in the form of 3D printing. If that technolog y becomes widely available, moving objects around could be more trou - ble than making them on demand and where they're need. "The ques- tion is what kind of timeframe is that going to happen over? In a way it's a race between technologies." Tom says his approach to busi - ness is d ict ated by h is deter m i- nation to look at things from the c o n s u m e r 's p e r s p e c t i v e . A n d that's something that, left to their own devices, the individual courier companies fail to do. They choose to concentrate on the business - es whose parcels they distribute, rather than their recipients. "That prevents the consumer from having control," he says. "So there's still a long way to go."

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