The Last Half-Mile

One evening last week, I came home to find two separate deliveries waiting on my doorstep. Both had been delivered in error. The first was a bunch of flowers, but the named recipient, the street address and the suburb were all incorrect – it was for someone else in another postcode. The second was a packet of coffee beans (part of my monthly subscription), but I had already received the same delivery the day before – so this was clearly a duplicate. Welcome to the perennial logistics challenge of the “last half-mile”.

Delivery-on-Demand: 5 years ago, Auspost was experimenting with drone deliveries (image sourced from IT News)

It seems that despite the increased demand for on-line shopping and home deliveries during lock-down, supply chain logistics are still struggling to find a consistent and reliable solution. Coincidentally, in recent weeks I have been pitched two different start-up ideas that aim to address the last half-mile challenge for e-commerce. Although they are each taking slightly different approaches, both start-ups are trying to address the “recipient not at home” dilemma – what to do with parcels and deliveries when there is no-one at home? Their respective solutions revolve around a “localised point of collection/delivery” – either using a more convenient network of click & collect facilities, or a network of trusted neighbours to receive deliveries on your behalf. I have previously covered another Melbourne start-up called Passel based on a network of trusted local couriers – but it doesn’t seem to have progressed very far.*

So if this is a recurring theme, why can’t it be fixed – or are the solutions out of step with the actual problem? Or is the problem not that big of an issue to warrant over-engineered answers? In attempting to provide constructive feedback to both the recent pitches, I gave similar responses in each case, which can be summarised as follows:

Using a proxy recipient still does not solve the problem of items being delivered to the wrong address (or wrong items delivered to the correct address). In particular, it doesn’t address the issue of Australia Post personnel carding an item as “not at home” when in fact they simply can’t be bothered to attempt delivery and prefer drop it off at the local Post Office for collection – believe me, I have had more than my fair share of those.

Localised click & collect services already exist – usually in convenient locations, and often accessible outside Australia Post’s normal hours. Plus more parcel locker and similar services are appearing – so is the demand really there for another delivery solution?

Who is responsible for insurance claims on lost or damaged packages, where the named recipient (who has the sales contract with the seller) does not match some of the relevant transaction details associated with the proxy recipient?

Likewise, if you are using proxy delivery or collection services, who is responsible for managing returns and/or unclaimed items? Some retailers will take items back and offer refunds as a matter of policy – but others won’t or can’t process returned stock, and end up re-selling into secondary supply chains at a discount.

How do you recruit and screen proxy recipients and deliverers, and build trust into the network? How do you avoid an under/over-supply of proxy providers – too few and the system gets choked; too many and it’s not worth their time and effort to sign up.

How do you recruit and service multiple retailers and/or their point of sale and fulfillment providers to make it a viable service for customers who wish to shop from multiple shops and brands?

Who (and how) do you charge for the additional convenience you are trying to offer – retailer, customer, or both? Suggested options include a per transaction fee and/or an annual subscription fee, or a check-out fee which can be rebated based on loyalty or other frequent buyer rewards. But the “convenience premium” cannot be disproportionate to the value of the transaction.

Even with more customised delivery options such as trusted neighbours, the issue of having to be at home during quite wide delivery hours (e..g, 8am to 1pm, or 9am to 5pm) still applies.

Confirming proof of delivery is still a pre-requisite – even more so if using proxy delivery addresses – and potentially adds another layer of complexity.

Finally, the need for immediate “Delivery-on-demand” may be overstated, at least on non-perishable goods, so a constant stream of delivery drones down every suburban street is probably some way off….. but maybe don’t rule it out if we have further pandemic-related lock-downs or continuing challenges in the COVID vaccine rollout.

* Similarly, I also blogged about other customer experience with the final step in fulfillment across a number of sectors, including e-commerce.

Next week: Notes from Blockchain Week

Gaming/VR/AR pitch night at Startup Victoria

Building on the successful format that has been the mainstay of Startup Vic‘s regular meetups for the past few years, February’s pitch night kicked off a scheduled programme of thematic events for 2017. First up was Gaming, VR and AR.

Photo by Daniel C, sourced from the Startup Victoria Meetup page

Hosted as usual by inspire9, the event drew a packed crowd, no doubt helped by the impressive panel of judges assembled by the organisers:

Dr Anna Newberry, responsible for driver-assistance technologies at Ford Australia; Stefani Adams, Innovation Partner at the Australia Post Accelerator; Tim Ruse, CEO of Zero Latency; Rupert Deans, Founder and CEO of Plattar; Samantha Hurley, Co-Founder and Director of Marketing Entourage; Gerry Sakkas, CEO of PlaySide Studios; and Joe Barber, a Commercialisation Advisor to the Department of Industry and Science, a Mentor at the Melbourne Accelerator Program (MAP), and angel investor.

Maintaining the tradition of this blog, I will comment on each startup pitch in the order in which they presented.

Metavents

This niche business offers an event planning app for festivals. At its heart is a tool that allows users to build a 3-D simulation of proposed events, combined with an AI capability to simulate risk management, logistics and team communications, plus a digital time capsule where event attendees can upload photos and other content.

Once licensed to event planners and organisers, the platform charges clients $1 per ticket sale, plus a 2.5% fee on donations and fees for other content and services such as the digital time capsule. In addition, Metavents is building strategic partnerships, and announced a relationship with the Vihara Foundation and its Rock Against Poverty programme from 2018.

All good so far. Then, things got a bit confusing. For example, in addition to festival and event logistics, Metavents claims to offer humanitarian support services in response to natural disasters, and emergency management capabilities for smart cities. There was also talk of a global network (linked to the UN?), and an impact investment fund.

I’m sure I wasn’t alone in thinking that the pitch was a bit disjointed and suffered from a lack of focus. But the pitch did reveal something of the founders’ core passion, and incorporated some impressive graphics – it just felt like a case of form over substance.

Second Sight

Second Sight is a game analytics service that “unlocks the secrets in player data”, by enriching existing big data sources with social media interactions. It does this by profiling players based on their behaviours, and providing this feedback and insights to game developers and product managers. Focusing on the mobile game market, Second Sight is initially targeting independent developers, and will then move on to corporate game businesses.

Second Sight’s own development path is to build automation tools first, then create a library of tasks and insights. With an estimated 1 million users (based on game statistics), 3 paying clients and another 27 beta clients, this startup is showing some promising market traction. However, there are a number of established competitors, including Omniata (which is more of a general user analytics engine, like Mixpanel or Flurry), GameAnalytics, deltaDNA and Xsolla, some of which offer free user services.

In response to the “ask”, ($500k in seed funding in return for 20% equity), the judges suggested that Second Sight might want to address the needs of a specific game sector.

Dark Shadow Studio

This presentation featured an application called Drone Legion, that merges drone experience with VR. Part simulation game, part training software, it was nice to see a demo of the app running in the background, without detracting from the pitch itself.

A key point made by the presentation is that the Civil Aviation Safety Authority (CASA), which is responsible for regulating drones in Australia, is in danger of falling behind other countries. For example, Drone Legion could be adapted to provide user training, testing and licensing before a customer buys a physical drone.

Although there are drone simulators available via Steam, they are not aimed at the general public. Drone Legion is also compatible with a range of gaming consoles.

The judges suggested that this pitch was more an individual game, rather than a business, so it was suggested that the founders should try to get funding from HTC or Oculus to build their first game. And given that one of the judges works for Australia Post (ostensibly a logistics company with a growing interest in drone technology….), there was the offer of a personal introduction.

Phoria

Phoria describes itself as an “immersive media business”, offering rapid 3-D visualisation (especially for the property development sector and the built environment),  and other services such as digital preservation.

But tonight, the pitch was about a plan to use “VR for social good”. Under the moniker “Dreamed”, Phoria is developing a niche health care solution, designing “patient experiences” to help them get out of their current care or treatment environment.

Predicated on an immersive therapy platform, Dreamed will offer a distribution service for cloud-based content, designed to be used alongside other, related assisted therapies that feature Animals, Nature and Music as stimulants for patient engagement and therapeutic outcomes. While not exactly a MedTech solution, Phoria’s “IP special sauce” is the use of VR as a constant dynamic feedback loop, which presumably learns from and adapts to user interaction and monitoring of appropriate patient diagnostics.

So, who pays for the service? Hopefully, hospitals will, especially if they can demonstrate reduced therapy costs and patient treatment times. (Maybe there will also be a consumer market alongside existing meditation apps?) But with some early-stage and potentially high-profile research underway via the Murdoch Childrens Research Institute, Phoria and Dreamed look to be making steady progress, notwithstanding the normally slow pace of medical research. Key to the research outcomes will be user acceptance and ease of service and content delivery, although a large number of unknowns remain in the context of the medical benefits. Meanwhile, Phoria continues to serve its core property market.

Finally, something which I found somewhat surprising, according to the presentation, there is no VR content licensing model currently available. Sounds like a job for a decentralized digital asset management and licensing registry (such as MyBit?).

On the night, and based on the judges’ votes, Phoria took out first place honours.

Next week: The Future of Work = Creativity + Autonomy