Monday, November 25, 2013

In War for Same-Day Delivery, Racing Madly to Go Last Mile

As the holiday shopping season gets underway, same-day delivery has become a new battleground for e-commerce.

For all the sophisticated algorithms and proprietary logistics software involved, many services come down to someone like Fermin Andujar, who finds himself racing to a store, scanning the aisles for the requested items, buying them and rushing them to the customer.

According to eBay’s job description, he is a “valet,” dispatched on Manhattan streets as a personal shopper on a bicycle or in other cities in a car.

The app for eBay Now, the company’s local shopping service, promises that valets will complete a shop-and-drop-off not just in the same day but “in about an hour,” a timetable crucial to the company’s intensifying efforts to one-up Amazon in the delivery game.

It wasn’t so long ago that overnight delivery seemed amazing enough. Then Amazon started building huge warehouses — what it calls “fulfillment centers” — near major cities to be, in a spokeswoman’s words, “as close to customers as possible.” With 40 such centers in the United States encompassing more than 80 million square feet of storage space and employing 20,000 full-time workers, Amazon offers same-day delivery in 11 cities.

EBay, which last month announced plans to expand eBay Now to 25 cities, and other businesses, including Google’s nascent shopping service and start-ups like Deliv, have a different model: Use existing stores or “retail partners” as distribution centers and beat Amazon in the race against the clock.

Which brings us back to Mr. Andujar. A lean, imperturbable 19-year-old, he has dealt with a lot. Weather. Traffic. Bulky seasonal purchases like air-conditioners or humidifiers and space heaters that require subways, cabs or even the help of another valet. He has delivered to customers in strange places, like bars.

He has had to call customers middelivery, as he did from Target the other day to report that the boots she had ordered did not come in tan in size 7 1/2. (She agreed to black instead.)

That personal, labor-intensive approach doesn’t translate easily into profit. “You just can’t get any hourly worker at Popeyes to do this — you need someone with a work ethic and a sense of urgency and a willingness to go out of the standard operating procedure to delight the customer,” said Sucharita Mulpuru, a retail analyst at Forrester Research. “It is an H.R. issue, not a tech issue. Many of these companies are coming at it from a tech standpoint.”

On a recent afternoon, Mr. Andujar was waiting in eBay’s “valet lounge,” when his iPhone emitted a hornlike blast. A three-item order had come in for Babies “R” Us, listed on his screen in daunting specificity:

1 Philips Avent nine-ounce BPA-free natural polypropylene bottles, pink, three-pack.

1 Huggies Little Snugglers jumbo — Size 1 — 40 count.

1 Carter’s super soft dot changing pad cover — ecru.

The store was downtown. The customer was uptown.

Mr. Andujar strapped on a giant backpack and sped off on his single-speed bicycle through city traffic. Five minutes later, he locked his bike to a bus stop sign. (In most other cities, the valets drive cars.)

With an assurance atypical of a 19-year-old man in a baby supply store, he strode straight to the baby bottle aisle and located the requisite Avent three-pack. Next stop, the diaper aisle. A few minutes later, the Huggies and changing pad cover were in his hands.

Adjusting the teetering stack of merchandise in his arms, he headed to the next stage of his mission: standing in line.

Six customers were ahead of him. He waited calmly, paid quickly with a company credit card (total $64.53), placed the goods in his backpack, and started pedaling uptown.

With about 10 minutes to spare, Mr. Andujar arrived at his destination, where the customer, Karen Horowitz, was waiting in her ninth-floor apartment while her 5-week-old baby napped.

Ms. Horowitz said she had decided to try eBay Now, which costs $5 a delivery and requires a minimum order of $25, after friends recommended it. She loved a feature on the app that let her track the valet. “I was watching her on the monitor,” she said of her sleeping daughter, “and him en route. I was really surprised how fast he was.”

While it seemed unlikely that eBay could make money on orders like this one, Ms. Mulpuru said a longer-range goal would be “locking in” that customer, and indeed, Ms. Horowitz said she would order again.

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