Delivering customer satisfaction

Tom Allason, founder of Shutl, tells Edwin Smith how he sees the future of the delivery business


For Tom Allason, founder of the super-fast delivery service Shutl, it all started with an argument. After being disappointed by the courier company that he had used to deliver something to a friend, he called the outfit in question and spoke to its boss. Tempers flared, and Tom ended up telling the chief executive, in no uncertain terms, that he could do a better job himself.

But it wasn’t a throwaway remark. Tom went on to start eCourier – the business-to-business company still exists, although he no longer has a stake in it – before acting on the intuition that the greater opportunity lay in delivering to consumers.

This led to the birth of Shutl in 2008, and a way to efficiently and intelligently connect online retailers with local courier companies, providing customers of Argos and other Shutl partners with high-speed, same-day delivery.

Shutl’s fastest recorded delivery time is 13 minutes, but Tom says most deliveries that are requested for as soon as possible arrive in about an hour. Consumers also have the option to select a one-hour window at some point in the next day or so for the same price, which is comparable to the cost of the standard delivery offered by most online retailers.

The business did sufficiently well to attract the attention – and cheque book – of eBay, which acquired it for an undisclosed sum in 2013. Tom, who was educated at Eton, came on board too and, although he still heads up Shutl, he is now also “global head of local” at eBay. “It’s a pretty oxymoronic job title,” he admits.

One of his chief responsibilities is to oversee eBay Now, the delivery option that uses Shutl’s algorithms and method of grouping deliveries to give eBay customers in the United States and elsewhere a Shutl-like experience. In tech takeover lingo, eBay Now is “powered by Shutl”.

SINGLE GREATEST INHIBITOR

But why did eBay go to all that trouble to bring a Brit out to San Francisco? And is it really that important for the delivery link in the supply chain to be harder, better, faster and stronger than ever before? For one thing, Tom says: “Delivery is still the single greatest inhibitor to conversion at a retailer’s checkout. It’s the number-one reason given for not purchasing, beyond price. So solve that and in the short-term you have a competitive advantage. Everyone measures their last purchase experience against the best one they’ve had. So you have to aim for that.”

At an event staged by WIRED magazine, Tom once illustrated this point quite elegantly by screening a clip of the curmudgeonly cult comedian Louis CK who talks about being amazed when he had high-speed internet access on a flight for the first time. But then, a little later into the flight, the internet cuts out. Straightaway, the guy next to him curses with frustration. CK observes: “How quickly the world owes him something that he knew existed only ten seconds ago.”

Delivery may not be the easiest to do, but it’s the one that’s going to have the most impact

“Consumers’ expectations only move in one direction,” Tom says. “Today, 0.1 per cent of consumers have had a same-day delivery, so they’re not expecting it and not demanding it. But with the likes of Amazon, Google, eBay and all the biggest retailers in the space making this a priority, you can bet that a lot of consumers are going to experience it – and then expect it. To me, it seems inevitable.”

And it’s not just the big, established players that are changing the way people think about delivery. Startups, such as Jinn, Postmates, Tok Tok Tok, Instacart and WunWun, offer to deliver items almost immediately to consumers who order through their apps. It’s not a new idea; Kozmo, Urbanfetch and Webvan all offered a similar proposition, only to become cautionary tales of the dotcom bubble back in the early-noughties.

CONCENTRATED DEMAND

The reason those businesses failed, Tom says, is they never reached the scale required to become sufficiently cost effective. Back then the problem was a lack of internet users, which, today, isn’t an issue, but the old hurdle remains – you need to have high, geographically-concentrated demand. Without that it doesn’t make economic sense.

Tom also talks about click-and-collect, and low-cost services that are designed to allow commuters to pick up items at transport hubs while on their way home from work. “They certainly impact the cost side of things,” he says. “But they don’t really solve the problem of delivery – that I can’t get what I want, where I want it, at a time that makes sense for me.”

The good news – for the consumer at least – is that more effort than ever is being made to find a solution. “We’ve been solving every other part of the e-commerce funnel over the last ten years,” says Tom, adding that the logical approach so far has been to tackle these elements in an order which has been determined by two main criteria: how important they are and how easy they are to fix. “It’s finally got to the point where delivery may not be the easiest to do, but it’s the one that’s going to have the most impact.”

Further into the future, Tom says that drones and driverless cars may well come into play, but another answer might come in the form of 3D printing. If that technology becomes widely available, moving objects around could be more trouble than making them on demand and where they’re need. “The question is what kind of timeframe is that going to happen over? In a way it’s a race between technologies.”

Tom says his approach to business is dictated by his determination to look at things from the consumer’s perspective. And that’s something that, left to their own devices, the individual courier companies fail to do. They choose to concentrate on the businesses whose parcels they distribute, rather than their recipients. “That prevents the consumer from having control,” he says. “So there’s still a long way to go.”