Same-day delivery service Deliv is branching out to 1,400 U.S. cities and towns in 33 markets, expanding retailers’ ability to deliver products to customers as quickly as possible and better compete with Amazon.com Inc.
“We went from four to eight to 17 to 19 to 33 markets,” CEO and founder Daphne Carmeli says of Deliv’s growth. “In the early days it was a push on the Deliv side and now it’s a complete pull—retailers want to move. Their customers expect same-day delivery as a choice. Prime Now is in about 40 U.S. markets, and we’re now in 33.”
Deliv, founded in 2012, said today that it is adding nine states to its service area, bringing the total to 23 states. The 14 new markets are:
- Austin, Texas
- Charlotte, N.C.
- Columbus, Ohio
- Kansas City, Mo.
- Orlando, Fla.
- Sacramento, Calif.
- San Antonio
- San Diego
- Tampa, Fla.
Deliv contracts with drivers to handle its deliveries—many also drive for ridesharing services such as Lyft or Uber—and in cities such as New York and San Francisco also uses bicycle couriers and walkers to deliver parcels, Carmeli says.
Existing retailer clients are expanding their services with Deliv, including Best Buy Co. (No. 9), Bloomingdales (part of Macy’s Inc.), BloomThat, Fry’s Electronics Inc. (No. 354), K&L Wine Merchants (No. 422), Office Depot Inc. (No. 12), PetSmart Inc. (No. 365), Macy’s (No. 6) and Plated, No. 526 in the Internet Retailer 2017 Top 1000. Deliv handles deliveries for some 4,000 clients and lists 147 retailers on its website. Enterprise clients, such as Macy’s, typically sign a contract with Deliv, while individuals and small businesses can seek a price quote.
Macys.com will offer same-day delivery in all of Deliv’s 33 markets. Customers can search for items available for same-day delivery or choose the same-day option at checkout if a product qualifies, says Scott Prieto, executive vice president of logistics and operations at Macy’s. Macys.com orders placed by 1 p.m. Monday through Saturday, and by 11 a.m. on Sundays, are delivered later that afternoon or evening and carry an $8 fee, he says.
“We will have picked and prepared the order for Deliv, and they coordinate the delivery zone and get it delivered to our customers,” Prieto says. It’s a fairly seamless process for Macy’s, he says, noting that Deliv’s API (application programming interface) integrates with the retailer’s system that manages in-store fulfillment of online orders. Macy’s has in-store fulfillment capabilities at all of its more than 700 department stores, Prieto says.
Best Buy, in addition to expanding with Deliv to 27 markets, up from 13, plans to be in about 10 more markets that Deliv doesn’t cover before the holiday season, a spokesman says, declining to name the delivery provider at this point. “In areas where the service is available, you’ll be able to place an order online as late as 3 p.m. local time and receive the package by 9 that night. Same-day delivery is available seven days a week—though Sunday deadlines are an hour earlier—and the price per order for the service has dropped to $5.99,” Best Buy states in a blog post.
Deliv is adding new retailer clients as it expands, but Carmeli says she cannot disclose them at this time except to say one is a national bricks-and-mortar grocery chain. She expects retailers of groceries and meal delivery kits to gravitate toward Deliv or other companies as Amazon moves deeper into perishable food sales—online and in stores—with the acquisition of grocery chain Whole Foods Market, its AmazonFresh e-grocery service offered in a dozen U.S. metropolitan areas and its new Amazon Meal Kits offering.
Deliv in May started Deliv Fresh, a same-day delivery service for online grocers and meal subscription services. Clients include FoodKick by FreshDirect, Get Fed, Green Blender, Plated, BloomThat, The Cheese Store of Silver Lake, Plum Market and Eataly Chicago.
“Grocers that sell through Prime Now and compete with Whole Foods, they might not want to be on Amazon. We are complementary to their offerings, not a competitor,” Carmeli says.
Prime Now is Amazon’s free two-hour delivery service on more than 25,000 products in such categories as household goods, groceries, gifts and more. It is available only to Prime customers, who typically pay $99 a year or $10.99 a month for such perks as free two-day shipping, streaming music and streaming video.
“In the early days, 5 ½ years ago, retailers loved the idea of same-day delivery but were hesitant,” Carmeli says. “We had some early takers, like Macy’s and Footlocker. Retailers were worried about foot traffic, but now it’s the battle of the Buy button and it’s about offering consumers choice. Consumers may not use same-day delivery all the time, but Amazon has made it table stakes.”
“Macy’s customers certainly are changing, and we’re responding by providing other platforms,” Pietro says. “We’re expanding same-day delivery in additional markets and we provide buy online, pick up in store if customers need that immediacy and can’t wait until later that day. The marketplace is changing and we want to allow our customer to choose what her best option is.”
Deliv, in announcing its expansion, states, “With Amazon’s Prime Now service setting the standard for shopping convenience, 80% of shoppers want a same-day shipping option.” That 80% statistic comes from the “State of Shipping in Commerce 2016” report by fulfillment software provider Temando. The company surveyed 1,000 U.S. consumers in October 2015.
In its 2017 version of the report, Temando finds that consumer demand is outpacing what online retailers offer. 49% of consumers say they would pay for same-day delivery, yet only 29% of retailers offer the service; 38% of shoppers would pay for the convenience of hyperlocal delivery, which Temando defines as within 1-3 hours, but only 24% of retailers offer it. The 2017 report surveyed 1,292 U.S. consumers about their online shopping preferences and 270 retailers selling online and offline across various product categories.