…try and try again.
The battle for home delivery services, especially grocery and general merchandise, continues to heat up. Word came out last week that Webvan’s founder Louis Border is back in the game, working on a new home delivery start-up called “Home Delivery Service” (the name is tentative while the company remains in stealth mode). Here are some excerpts from the website:
HDS is a dedicated home delivery service. Its patented, automated distribution technology, retailer-friendly business model and complementary supply chain architecture enable smaller distribution centers, lower operating costs and a more environmentally sustainable service than any current retail format. HDS can offer competitive prices, fresher foods and unlimited selection, as well as free delivery.
Consumers experience HDS as a destination site to shop for fresh foods and general merchandise from the world’s leading retail brands. Multi-retailer orders are assembled at our automated distribution centers into reusable totes and delivered quickly and conveniently by HDS couriers in HDS vans.
The field for home delivery is getting more crowded by the day, with heavyweights Amazon, Google, Walmart, and eBay battling it out, along with start-ups such as Instacart and Relay Foods (see video profile below of Instacart).
The main challenge with grocery delivery is the same today as it was when Webvan crashed and burned more than a decade ago: getting enough delivery density to minimize transportation costs, which makes a big difference in a low-margin business like grocery, and providing customers with delivery options at the point of sale that are reasonable, affordable, and reliable.
Of course, technology will be a key enabler of these services, including solutions that offer consumers incentives (e.g., a lower delivery fee) to choose a specific delivery date and time that will result in the most cost-efficient route for the company based on other deliveries it has to make that day. Descartes Systems Group and Roadnet Technologies, for example, both offer solutions in this area (see Descartes’ Reservations application and Roadnet’s NetScheduler solution).
The big question in my mind, however, is how many people (households) will ultimately choose home delivery of groceries versus going to the stores themselves. The reality is that some people love the idea and want this service, while others prefer (or still see the need) to walk the store aisles themselves. Just read the comments people posted on my recent LinkedIn Influencer post about Amazon Dash for a sampling of perspectives on this topic.
Nonetheless, home delivery is stirring up a lot of conversation in transportation and logistics circles, and the race is on to crack the code and leverage it as a competitive differentiator.
Will this latest round of home delivery business models and technology fare better than the last one? Post a comment and share your perspective!
Note: Descartes is a Talking Logistics sponsor.