A lot has been written on the impact the sharing economy has had and will have on the logistics and transportation sector. Some have even moved so far as to predict that the sharing economy and the new opportunities it represents will destruct the traditional industry eventually (The New Economy). Others are less extreme in their predictions and talk more about the rise of new complementary business models and opportunities to collaborate (The International Transport Forum; Mckinsey; PWC).
In my view, the transportation sector is well established. Decades of investments, that easily accumulate trillion of dollars globally, are not easily replaced. Most businesses based on the sharing economy (i.e. Zipcar, AirBnB, Yerdle) also exist because they find ways to capitalize on these previous and continuous investments made by the existing industry or private individuals. Hence there should be synergies to be explored between the existing industry and the sharing economy. Let me ask a hypothetical question: What would have happened if Uber and the taxi industry had partnered in the early days. If we assume the taxi industry would have been receptive to new innovations and business models, perhaps both parties would have benefited rather than ending up as rivals. Uber could have saved billions of dollars on driver acquisitions; and expensive head on head marketing campaigns would have been obsolete. However, I did not raise this hypothetical question to encourage further speculation into what-if-scenarios.
I am the founder of Transfervans, which is best described as an Uber style delivery service for over-sized items. The idea came when I bought a new couch from a retailer on a Saturday but was told that they only deliver to my area between 8am – 5pm on Wednesday. Since I am working full-time it meant I would have to be at home the whole day to wait for the delivery. I tried to find an alternative delivery service but did not succeed. Given that everyone we spoke to had had a similar experience, we decided to build a business to solve this problem. Essentially, Transfervans is an online platform that connects customers in need of a delivery with van or truck owners. We solely focus on last-mile-deliveries, which amounts up to 28% of the total transportation cost of goods (Wikipedia). The last-mile-delivery network is also considered the least efficient part of the existing transportation network. Since our launch in June 2016, the market response has been well beyond our expectations.
Businesses such as ours that understand the sharing economy and possess the technical know-how to build popular platforms can create new opportunities that would not be accessible to the existing industry. But the existing industry also possesses capabilities and assets (i.e. optimisation, scale and fleet) that would help newcomers to expand faster and create additional value to be shared.
I foresee the sharing economy to become more embedded into the transportation industry in the future. How soon? That depends on the willingness among both the existing industries as well as so called ‘disruptive startups’ to listen rather than ignore each other. I see real opportunities for us, as well as for the existing industry, to focus on creating synergies and opportunities for collaboration rather than trying to compete or destruct what already exist.
The retail industry has changed dramatically over the past few years with increasing focus on multi-channel point of sales strategies to reach customers. The growth in multi-channel has been driven by advancements in tech and an increasingly diverse customer base with some still preferring brick-and-mortar shops and speaking to a real person while others are relying on online and contactless shopping. In July 2016, BNZ reported that online transactions were up 13% from the same month last year. A strong indication that online sales is happening on the expense of more traditional shopping methods. How do the multi-channel point of sales strategies affect customers’ expectations to delivery options?
From product and price to service and delivery
The introduction of multi-channel retail strategies is well aligned with the shift from product to customer-focused strategies. Subsequently customer preferences are shifting from focusing on product and price to service and delivery. Customers are increasingly taking convenience and overall experience into consideration when deciding on where to spend their money. ChainLink Research recommends retailers to rethink the whole consumer buying process from the first point of contact to the delivery and end of sales process; focus should not only be on the point of sale. In a survey of US consumers, Pitney Bowes found that shipping is an important factor when buying online for 93% of the respondents. While price of the delivery is the most important factor, speed and reliability also have significant impact on customers’ buying decision. It is stressed, however, that customers are no longer homogeneous, but have different needs:
“Bottom line. Consumers are unpredictable… Therefore, you need a continuous and dynamic approach to scheduling home delivery. Otherwise home delivery becomes a money losing game”
Current delivery options incomplete
Most retailers only offer one type of delivery options for their customers. Often this option is very inflexible for the customer in the sense that the customers have no or very limited choice of delivery day/time. This is not very practical for customers who are working full-time during the week. In fact: (1) most customers would prefer to have it delivered either during the weekends or late afternoons to avoid having to take time off work, (2) Some customers also prefer to have it delivered on the same day of the purchase and (3) Others live outside the shops service area and are not presented with alternative delivery options; just to mention a few customer segments that are not currently serviced well with existing delivery options.
Partner with Transfervans to meet the demand of your customers
Transfervans is specialised in providing more flexible delivery options in partnership with retailers. We already work with 10+ retailers who have benefited from being able to offer their customers’ more freedom in terms of how they want their newly purchased furniture delivered.
“I would highly recommend using transfervans service as I was able to purchase the lounge suite from ifurniture and was able to get it delivered the same day as probably wouldn’t have purchased the lounge suite if this service wasn’t available..”
Ruth, 25/03/2016, Manurewa, Auckland
“The service was fantastic – being able to have our furniture delivered straight away instead of hanging around waiting for a delivery was so convenient. Efficient, hassle free and well worth the fee.”
Yvette, 18/04/2016, Milford, Auckland
We are able to deliver anytime and anywhere at affordable prices. Our service can be integrated with the retail store, so customers can make an informed choice of delivery options based on their preferences. Transfervans booking system is online and fits well with retailers who aim at increasing their online sales or simply are targeting more younger professionals or full-time working customers.
How the Idea Came About?
It all started when our Founder, Brian, in the midst of a buying outdoor furniture during the weekend found himself left with very poor delivery options. The retail store only delivered during the weekdays and could not confirm an exact time. Not ideal when working full-time. Finding an alternative delivery company, who was affordable and available in the weekends, was ‘Mission Impossible’. End of story, you end up paying $100 for a delivery which are completely on the terms of the delivery company. Surely there must be a better solution to this problem!
Talking and listening to other people only confirmed our experience. Everyone had their own ‘horror stories of deliveries-gone-wrong’ to share, i.e. from deliveries of the wrong items to deliveries to the wrong location. In the early days of 2016 we decided to try to come up with a solution to take the hassle out of moving furniture as well as make it more affordable. We went into the ‘battle field’ with pen and paper to gather a better understanding of what customers really wanted. Already from day one we had customers asking us if we could deliver their newly purchased furniture on the same day or whenever they wanted it delivered. We allied ourselves with a few truck owners and it did not take long before our first delivery was completed. The feedback we received was awesome, as examplified by one of our early customers:
“The Transfervan service was great. We ordered a new bed and an hour later it was being carried up our stairs by the very helpful driver. Very impressive service!” Le Hang, 28/03/2016
These kind of endorsements really motivated us to push forward with the idea. Soon after we started to get inquiries from customers who had just won an auction on Trademe, were about to move to a new apartment or simply just wanted to move something from home to another location. We thought, perhaps we should develop a proper website.
Status September 2016
In just a few months, Transfervans has grown into a ‘real business’ with revenue growing at a very fast pace. We have more and more drivers joining our network as they are looking at making some extra income or simply just want to utilise excess capacity. Transfervans remains an independent platform that simply connects customers in need of facilitating a delivery with one of our verified but independent vehicle owners. The solution is embedded in the sharing economy and is aligned with the principles of 2-sided marketplaces and on-demand models, which have fostered so many successful business in recent time, i.e. AirbnB, Uber and Postmates. Our approach to starting up this business have been inspired by fast-fail, lean startup and agile development.
Our business philosophy is to Empower people in Travel and Transportation. We are committed to make this happening.