CITYWIDE ‚Äî Santa Monica has a reputation for healthy living.
The city promotes bike lanes, has more yoga studios than fast food outlets and is one of the rare locations where it’s easier to buy organic than conventional. So it’s somewhat surprising that it’s also the center of a David and Goliath battle over which companies will survive by catering to sloth.
The area has become a hotbed of home delivery services. Google recently launched a same day delivery service on the Westside, including Santa Monica. Customers can visit www.google.com/express to choose from a curated selection of items from other major retailers such as Target and Costco. Those items can be delivered for a fee of $4.99 per store ordered from but Google is offering to waive delivery fees for the first six months if customers sign up for a delivery account. Amazon already offers same day delivery in Santa Monica on some products.
The Internet giants join a host of local companies that will delivery almost anything to your door and the race for instant delivery has even taken to the skies with DHL launching a helicopter service in Downtown Los Angeles. Robert Mintz with DHL Communications said the company is limiting the service to bank clients who may need to receive documents from international clients without the delays caused by local traffic. A dedicated helicopter will pick up packages from LAX and transport them to a dedicated heliport downtown where couriers will travel the last mile.
Local delivery companies said it’s the final mile that has posed a significant barrier for most online companies.
“This is the nut that people have been trying to crack for a long time, the last mile gap from consumers of brick and mortar and the Internet,” said Noah Arthur Bardach, Founder and CEO of Santa Monica-based Gofer It.¬† “That’s what we’re seeing right now, Google and Amazon are beginning to roll out a plan to eliminate that last mile gap.”
He said instant delivery is going to rapidly become the industry standard as the offerings by huge services like Google will train customers to expect instant gratification.
“It’s going to be a sea change in 2-5 years,” he said. “By the end of it, people will expect to be able to get goods from Internet retailers or stores in their area the same way they get a pizza, on demand and pretty much immediately.”
He said small stores without delivery options are going to have a hard time in the new anything-anywhere marketplace.
“For little retailers, this is going to make it that much more difficult to compete,” he said. “They won’t bother driving to Downtown Santa Monica, dealing with traffic and parking if you can have this on your doorstep by three.”
Yummy.com co-founder and CEO Barnaby Montgomery agreed.
“Online retail is moving to become faster and more similar to a trip to the store,” he said. “Typically old fashioned online fulfillment would be done from a warehouse far from the customer, maybe in San Bernadino, then mailed to you by the post office or UPS. The future of online retail is more analogous to a trip to the store. In the real world, when the customer decides they need a product, they go to the store when it’s convenient for them and that’s often right now.”
Bardach’s company provides independent retailers with a system for same day delivery to local customers.
“We have a way to enable local businesses to provide that same service level if not better, quicker, faster to their customers,” he said. “We will give them some leverage and competitive edge against Google and Amazon. Everyone will be forced to provide delivery to compete in my mind.”
Bardach’s service brokers space on idle delivery trucks. He said he has contracts with established courier services that allow his clients make same day deliveries on an as-needed basis. His contribution to the system is a smooth customer experience and a level of customer service that he said outpaces larger rivals.
He said businesses could contract with him and then advertise the delivery service as part of their offerings or individual customers can utilize his service to pick and choose items from participating retailers. Bardach said he is testing a digital marketplace that will be a one-stop shop for local delivery options.
“Our users don’t have to negotiate and navigate all these different vendors,” he said. “They can just go through us. The technology that we’ve built helps facilitate that and support our customers in real time. I think what we’re doing fundamentally differently is providing an experience that’s second to none. What we’re really leveraging the technology to do is to have flexibility and bandwidth to talk to people as much as they need us to. That touch, where our customers feel they have someone who is collaborating with them to solve problems, is not a feeling big companies are good at.”
Yummy.com is a web-based grocery delivery service that operates several physical stores, including one in Santa Monica. The company offers a same day delivery for a fee or for free if customers spend more than $100. Montgomery said he can delivery groceries in about 30 minutes, far faster than even the same day options of larger companies.
“(Google and Amazon) don’t in fact delivery it now,” he said. “It might be if you order by 1 p.m., you get it by 8, but it’s not in fact, as convenient as a trip to the store yourself or as fast. We’re basically addressing a little bit of a customer need. We’re as close to going to the store yourself as you can get.”
He said the larger retailers would probably settle on catering to customers that want to schedule deliveries for particularly heavy items or large loads but that the average shopper wanted a different kind delivery option.
“We are addressing different customer needs with a different solution. It’s just not the same type of problem that Amazon is solving, if you’re at home and you want to buy $300 worth of groceries or 15 cases of water and it’s really heavy you might say you want it delivered,” he said. “We’re when you are looking to fill in a shopping list, you need 15 items and as an alternative to the store you order online. Because Amazon is focusing on customers who need a delivery we’re focused on customers who value the convenience of our 30 minute delivery.”
Both local businesses said they saw a bright future for fast delivery and both hoped to get a piece of the larger pie by growing their services beyond Santa Monica, even as the big boys move in.
Bardach said his company is already active in other cities including Denver Boston and San Francisco proving that there is a market for the last-mile service.
Montgomery said his company started in groceries because there is some efficiency with grocery shopping, such as the frequency of purchases, but that overall, groceries are a very competitive market. After successfully building his food service, he said he saw no reason why the technology couldn’t be applied to other kinds of stores.
“We have the knowledge to fulfill an online order in about 30 minutes and that can be applied to many retail environments,” said Montgomery.