The “Amazon effect” on logistics is undeniable, as it has brought about a major shift in how supply chains work and in the mindset of consumers who are increasingly accustomed to buying online. This situation has divided the market into two – companies like Amazon and Alibaba that are omnipresent across verticals with deep pockets to draw from, and mid-tier companies that work on specific niches and are generally cash-strapped.
A peek into data would explain the chasm that exists in the market. In the $5 trillion retail industry in the U.S., the ecommerce vertical takes up nearly 10 percent of the market, of which close to 49 percent of it is scooped up by Amazon. In essence, for every $2 that Americans spend on e-commerce, roughly $1 goes to Amazon, with the number growing every year.
“That’s a major threat to brands, as each time someone buys from Amazon, he does not buy from the brand, but from the retailer. And it is not just retail – we are even talking about restaurant chains that face competition from delivery companies like UberEats and Deliveroo,” said Guy Bloch, CEO at Bringg, a leading delivery logistics platform for enterprises. “Be it e-commerce, healthcare services, or logistics, everyone is threatened by the change of customer behavior. Customers seem to want more, and the introduction of companies like Amazon and Uber has raised the bar.”
Consumers look to have transparency into their supply chains and gain control over every nodal point that their package moves through. They also want convenience in choosing delivery time windows, locations and the way they want products to be delivered. Consumer retention and loyalty have much to do with the way last-mile delivery is done, and businesses now face a situation where ticking off these boxes is crucial to their survival.
“Businesses need a variety of options to cover geography and peak coverage. And they need to optimize operations as this is expensive. They need to do all this in real-time as the interaction with the customer is in real-time,” said Bloch. “If you look at the statistics, 97 percent of retailers say that last-mile is critical for them to drive revenue, but they understand that the current last- mile models are not sustainable and don’t scale. It is a big challenge, as according to research, 65 percent of retailers say that in 2019, they will offer same-day delivery.”
This is a difficult problem to tackle as apart from the technological and logistical complexities, seamless supply chain movement would need shippers, warehouses, dispatchers, drivers and customers all to be on the same page.
Bloch explained that the idea here is to level the playing field – clone what Amazon has done over the years, build an orchestration layer that connects all the stakeholders in the same place, collect data and use it to create a data analytics algorithm that can help automate operations. “At Bringg, we are building an enterprise delivery orchestration platform and bring everything together,” said Bloch.
Bringg does not consider logistics giants like UPS, FedEx and DHL as the competition; instead it looks at them as partners to work with in ushering better technology and customer experience for businesses. “We integrate with logistics players and also with the brands, bring them together on an open platform where they can leverage the network and be able to serve their customers in the most optimal way,” said Bloch.
Bringg boasts of a high-profile clientele like Panera Bread, Walmart, McDonald’s, and Coca- Cola. Bloch insisted that every company was unique as their needs were different and needed individual tailoring.
“One of the challenges that these companies have is that they don’t know how to approach the problem. We help them with solving that. Bringg is an out-of-the-box SaaS product, but everyone wants to deliver differently,” he said. “To cater to our customers, we developed a methodology called ‘from prescale to scale.’ It is about us taking a couple of locations and helping our customers to deliver in there, instead of doing it nationwide. Once prescale delivery is successful, we expand into new markets after which the scale is rapid.”
This month, Bringg announced an investment of $25 million in its Series C round following strong market traction in 2018. “The fundraising is about three things. One is the expansion part, where we want to accelerate our growth globally. The next is customer success, where we work to bridge the gap for our clients and drive them from prescale to scale. The last focus area is about our orchestration platform,” said Bloch.
“Think about the amount of data we have across every step, every order, and every inventory. We can integrate with the ERP to see everything – who is the closest driver, where’s the nearest inventory, what would be the cheapest way to deliver – all in one place. It is about the data algorithms and machine learning systems. In essence, we would like to bring more innovation to our customers.”