Reinventing the Delivery Experience for Residential Freight

“In-transit.” (Your item is definitely delayed.)

We are excited to announce NextGen’s investment in Austin-based Convey. Convey is an application software platform simplifying online retail logistics.

The Story

Imagine you went online to Hayneedle.com and ordered an outdoor patio table. After seamlessly completing your purchase online, you then receive your tracking information. Excited to see when your table will arrive, you find that you have been directed to a 3rd party carrier for tracking — not the retailer. After navigating the 3rd party carrier’s site, instead of seeing a detailed timeline showing your table’s journey — you only see “in transit”. Not only are you left in the dark about where the item is, but the delivery estimate is a 12-hour window for which you have to be home to receive the package. After you have turned your schedule upside down to accommodate its arrival, sadly, you find out one of the legs of the table is broken. You then spend hours on the phone with the retailer and the shipping company to schedule a return and start the entire process again.

Most people have probably experienced this before. For the online retailer, this terrible customer experience is disastrous. They know you are likely to never come back — so they are left scrambling to salvage the relationship. Not to mention, all the money, marketing and resources that went in to acquiring you in the first place.

Research shows that 70% of consumers will abandon a retailer following a poor delivery experience. @MetaPack

We as consumers have been conditioned to expect a predictable, convenient and transparent delivery experience whether we are buying a book or a large piece of furniture. If the retailer puts so much time and effort into creating an enjoyable shopping experience, why does the post-purchase experience seem so behind? Let’s dig in.

The History

When you think of today’s online retail delivery, you more than likely think of what is referred to as “parcel” post. Parcel post covers mailed items less than 150 pounds, and this industry has been dominated by FedEx and UPS (though Amazon will catch up soon). FedEx and UPS have built their businesses around residential delivery and have at this point, somewhat perfected the customer experience.

Consumers are now more comfortable ordering larger items online from eCommerce sites such as Hayneedle that exceed the 150-pound limit for parcel deliveries. As a result, eCommerce companies have turned to what is known as less-than-truckload (LTL) that specialize in freight transportation to handle these larger purchases. However, there are hundreds of third-party-logistics (3PL) providers and LTL freight shippers for eCommerce sites to choose from versus two options in the parcel space. As a result, the carrier selection process has become a challenge for retailers to manage.

Unlike parcel, the LTL freight carrier industry is highly fragmented and traditionally delivered to commercial loading docks, not residential areas. Now, there has been a transformational shift in the LTL community from solely delivering shipments from loading dock to loading dock to carrying the burden of residential freight deliveries.

WSJ Graphics

This shift has created several issues for LTL carriers. Because they have historically been focused on business-to-business deliveries, they are not consumer-facing organizations and thus consumer friendly technology has lagged. Compounding these challenges is the fact that they are now forced to transport irregularly shaped items that require extra space or special handling. Unfortunately for the carriers, consumers have been trained to expect a flawless at-home delivery experience with digital notifications along the way, irrespective of package size. It’s a recipe for complete disaster.

The Solution

Convey is the software layer that connects all constituents in the residential delivery process — the retailer, carrier, consumer and in many cases, the drop-shipper. These connections and Convey’s data transformation work unlock a host of capabilities. These capabilities result in higher purchase conversions, transportation cost reductions for the retailer, performance data and accountability metrics for the carrier, and a vastly improved experience for the consumer.

With Convey, retailers can expose in-cart options and pricing for service level (curbside vs. white glove), delivery appointment setting, and SMS communication opt-in. Convey is also simplifying the carrier selection process and shipment tracking tools for retailers like Build.com and Jet.com. In addition, retailers can easily flag when a shipment is delayed or damaged and quickly communicate those exceptions to shoppers. This then allows the shopper to complete returns through a simpler, carrier-optimized process.

We also could not be happier with the founder, Rob Taylor, who has extensive industry expertise in online retail. Rob previously played a major role in the growth of BlackLocus (Acquired by Home Depot in 2012), a pricing and assortment intelligence platform for online retailers. In addition, he led product development and customer acquisition as the COO of the now publicly traded TrueCar (NASDAQ: TRUE). We are thrilled to be teaming up with Rob, and we look forward to seeing the transformative shift in online retail logistics and the pivotal role Convey will play. Also, Convey is hiring!

Special thanks to all who helped with this, especially Matt Bernstein and Lisa Cuesta.