- On-demand warehousing company Flexe has announced an integration with Google Merchant Center to promote fast and free shipping.
- Karl Siebrecht, Flexe CEO: “Ten to 15 warehouses is just not economically viable for the vast majority of companies on the planet.”
- Flexe revenues more than doubled over last year.
On-demand warehousing company Flexe has announced an integration with a new Google Merchant Center feature to promote fast and free shipping as retailers struggle to reach the high delivery bar set by Amazon (NASDAQ: AMZN).
“The number one reason consumers abandon shopping carts online is dissatisfaction with the delivery promise,” said Flexe CEO Karl Siebrecht. “It either costs too much for shipping or takes too long.”
Amazon has the advantage of being both a shopping portal and a logistics infrastructure, Siebrecht explained, so when you shop for an item, it tells you on a shopping page how much it costs, how long it will take to be delivered and whether shipping is free.
That has not been the case when consumers searched for goods on Google, simply because the search engine had no way of knowing which of its merchants has inventory, or where the customer lives.
Google Merchant Center, behind the scenes
Describing the arcane processes that occur when buyers search for items online, Siebrecht said Google has created an API that outside platforms like Flexe can plug into, so the system knows exactly where physical inventory is at the moment of the search.
“So in the milliseconds that lapse between the time that you type your search for, say, ‘ice cooler,’ in the milliseconds before results are returned to you, that API has enabled a query of the Google customers’ merchants’ inventory through Flexe,” Siebrecht said.
If it turns out that inventory is available within a one-day shipping window, the ad result the buyer sees would include alongside the price and rating a free and fast delivery promise.
Shopper conversion rates with that added feature increase by an average of 9%, according to Siebrecht. “This is a really big deal and a way for companies to compete and drive sales,” he said.
Thriving on volatility
Founded in 2013, Seattle-headquartered Flexe is essentially the Airbnb of warehouse space. Riding a wave of on-demand logistics technology companies, it has created a marketplace of spare storage, and merchants book that space through an easy-to-navigate platform without having to make fixed warehouse investments.
It’s no secret that brands today are juggling an extremely challenging retail environment, in which e-commerce demand is spiking as brick-and-mortar sales languish and the country’s economic path in the fourth quarter of 2020 remains unknown.
But volatility is what Flexe “was built for,” Siebrecht said. “Our whole business model and value proposition is we can leverage Flexe to move very quickly and add new locations, new capacity with no fixed cost.”
Company revenues more than doubled over last year. “We grew even faster than we planned,” he said.
Among the benefits that accrue to Flexe customers as a result of the new Google integration is they now have a better way to compete in today’s ruthless do-or-die, fast-shipping environment.
Amazon Prime’s one-day delivery promise is the standard all other retailers and brands have to compete with. But to get two-day ground delivery in the U.S., according to Siebrecht, a company needs two or three warehouses across the country, according.
For one-day delivery, it needs 10 to 15 warehouses, and “10 to 15 warehouses is just not economically viable for the vast majority of companies on the planet.”
Flexe can provide its customers with additional warehouse locations in order to hit that one-day delivery promise, so “when those Google ads show up, if you have 10 locations with us, 90% of sales can be delivered the next day, whereas competitor ads will probably say three days, or [shipping time] may not even show up.”
“You have an advantage where your competitors don’t,” Siebrecht said.