Deliv CEO Daphne Carmeli calls the start-up she founded two-and-a-half years ago a disrupter for the retail world and as CEO she is entitled to boast. But Carmeli is not that far off in her description of a service that, with a few tweaks and twists, can be likened to a far more famous disrupter–rideshare services Uber and Lyft.
Deliv is a crowdsourced delivery service used by retailers like Williams-Sonoma and a growing number of malls owned by such companies as General Growth Properties and Simon Property Group. A shopper within a certain radius of the mall can have her purchase delivered to her the same day, whether she bought the goods online or at the store, with the offer for delivery typically made as she pays for the purchase. The price is around $5 per delivery. In some instances, such as Chicago’s Water Tower Place where Deliv just debuted earlier this week, it is free for the time being, as mall owner General Growth wants to get shoppers acquainted with, and presumably addicted to, the service.
That $5 delivery point is where the disruption comes in, Carmeli explains. “Usually you pay a higher cost for faster service,” she tells me. “If you want something overnighted to you it is understood that it will cost more than regular delivery. What we are saying is that the fastest delivery mode is now the cheapest.”
Deliv is able to offer this price point by crowdsourcing its drivers. Having no vehicles to maintain, warehouses to house them or regular (and possibly union-set) salary and benefits to pay tends to save a lot. Drivers get paid by the hour – Carmeli says they receive between $12 to $15 an hour plus a stipend for driving costs – and they are hired when needed. More to the point, they deliver many packages on their runs for many retailers, all beginning from the same location.
Deliv isn’t getting the pushback that Uber is, Carmeli says, mainly because this particular niche isn’t regulated by the equivalent of a local taxi commission. Also, although she doesn’t say this, another reason I would guess is that Deliv’s customer base–retail-owning REITs like Simon and GGP and Macerich as well—would not be inclined to take on or finance a service that wasn’t legally bullet-proof or close to it.
Then again, Uber and Lyft, started their ventures with the same thinking. It wasn’t until they became popular that the official protests started and that is a story that is still unfolding.
It is not hard to guess who might have a problem with Deliv: other delivery or courier services, possibly local entities that want a piece of the action in the form of a registration or license fee and maybe, more insidiously, e-commerce giants who want to dominate this space themselves. Amazon and Google have launched, respectively, Google Shopping Express and Amazon Local Express to offer same day delivery. In the case of Amazon, the delivery cost is almost the same — $5.99 for a Prime customer — but the types of products available for the service are limited.
Here is where one must bow down to Deliv’s cleverness of partnering with retail center owners. It is unlikely they would ink an agreement with Amazon, which introduced its own brand of retail disruption some twenty years ago, much to brick-and-mortar stores’ chagrin.
Instead, recognizing a competitive differentiator when they see it, shopping center owners are helping to fund Deliv’s growth; in less than a year the company has raised more than $10 million, with many of its REIT customers kicking in some backing. Carmeli tells me the company will be announcing more geographies for the service, more malls and other mall operators and more large household-name retailers that “have aggressive plans of rolling out our service nationwide” over the next few months.
That kind of success breeds success: last month Deliv scored a major coup snagging IBM as a tech partner. IBM’s retail customers, via IBM’s Ready for Smarter Commerce partner program, will now be able to integrate with Deliv for purchases made over the phone, in short or through the website.
That kind of success also tends to breed enemies. With Deliv on the cusp of some major disruption of its own it will be interesting to see who comes out of the woodwork.
Read on at Forbes!