The rise of e-commerce has been one of the most simple yet profound technology innovations of recent decades. In the US, at least $800 billion of GMV will be transacted online in 2021, and this number will continue to compound well into the trillions of dollars for years to come. To state the obvious, the pandemic further fueled this trend as consumers turned to online channels for everything from groceries to flowers to cars and beyond.
The best e-commerce brands have figured out how to spoil their consumers with consistent simplicity and convenience. As a consumer, you can discover a product you like on a webpage, click a few buttons and enter some transactional details, and then that product suddenly appears on your doorstep sometime in the near future. When e-commerce works as described, the experience can be quite magical.
That being said, the backend logistics powering those e-commerce experiences are anything but magical. Anyone who has ever ordered anything online has likely also experienced the dreaded feeling where things don’t go as promised. Having minimal visibility into an unexpected shipping delay for that key item you’ve been waiting on for days can be infuriating. Unfortunately, this has been especially common during the pandemic as the sudden acceleration of e-commerce demand has led to supply chain struggles around the globe, leading to painful customer experiences. While poor delivery experiences can be attributed to a wide variety of factors across the logistics network, the part closest to the consumer experience known as the Last Mile is widely agreed to be the most difficult to execute.
The Status Quo
The existing Third-Party Logistics (3PL) delivery experience is failing both e-commerce brands and their consumers.
In the ever competitive e-commerce landscape, merchants fight fiercely to acquire customers and then meticulously and gently nurture consumers down their conversion funnels, only to put the customer experience in the hands of a 3PL once the transaction is booked. Incumbent 3PLs typically are challenged in building seamless, intuitive consumer-facing experiences to meet modern day customer expectations, still leveraging 18 (!) digit tracking codes and “Sorry We Missed You” notes instead.
Additionally, 3PLs such as UPS (founded in 1907) and Fedex (1971) are not architected to handle sudden fluctuations in demand as their delivery capacity — measured by drivers, trucks, and fulfillment — is quite rigid. This issue has been exacerbated during the pandemic, as the massive increase in package volume combined with labor shortages have highlighted the bottlenecks in incumbent delivery networks in the face of volatility.
All this culminates in a consumer shipping experience that lacks the visibility, consistency, and support we’ve come to expect from modern logistics companies like Uber, DoorDash, or Amazon.
Today, we’re thrilled to announce our partnership with Veho, a logistics technology company reimagining modern day package delivery.
Back in 2016, Veho Co-Founder / CEO Ita Zur was studying at Harvard Business School and decided he wanted to try out one of the new burgeoning D2C meal-kit services. His shipment was delayed with minimal visibility from both the 3PL carrier or merchant, and ultimately never arrived, ruining his experience with the service and causing him to cancel his subscription before even trying the product. He realized that despite the brand’s years worth of investment in designing their service and acquiring him as a customer, his perception of the brand was ruined because of a delivery experience of which the brand had no direct control over. From there, he set off to reimagine the package delivery experience and the concept of Veho was born.
Veho’s proprietary technology platform enables e-commerce brands to offer reliable and transparent delivery experiences that meet modern day consumer expectations.
On the backend, Veho is a marketplace for local driver networks who serve as couriers in their local neighborhoods. This driver network can be spun up and down flexibly to react to sudden spikes in demand. Drivers are given access to the Veho mobile app which serves as an all-in-one platform to assist with delivery routes, maintain a digital system-of-record, and communicate with the package recipient.
For many of these drivers, Veho represents a steadier, more predictable source of income vs. an alternative like ride-share. The night before delivery days, drivers are offered a menu of routes to choose from on the Veho platform. Drivers can choose routes with their preferred lengths, start times, end locations, and expected earnings – a level of choice that is uncommon in on-demand platforms. Driving for Veho also minimizes physical interaction with other humans, which many may find preferable in this post-covid world.
On the consumer side, Veho uses SMS to facilitate real time updates and communication with each courier to bespokely meet delivery expectations (e.g., “ring the doorbell” or “leave on front porch”) and seamlessly collect valuable feedback.
As evidenced by their 99.9% delivery success rate, the end result is a seamless, tech-enabled delivery experience that case studies have shown can materially improve customer satisfaction, increase LTV, and provide competitive differentiation for merchants.
Leading Veho’s Series A
The current package experiences offered by incumbent 3PLs need to dramatically and rapidly improve to meet expectations of e-commerce brands and consumers. In the future, the leading e-commerce brands will view best-in-class delivery and returns experiences as competitive differentiators rather than commoditized, outsourced afterthoughts. They will leverage seamless, intuitive, and transparent technology to extend customer delight into both the last-mile delivery and first-mile return experiences, and give consumers real-time control and visibility into the status of their beloved packages.
In about 18 months of operations, the Veho team has delivered packages for numerous category defining e-commerce brands, launched over a dozen geographic markets, and have shown they have what it takes to scale into a trailblazing logistics technology company for decades to come.
We’re honored to welcome Veho Co-Founders Ita Zur, Fred Cook, and the rest of their team into the GC family by leading their Series A alongside our friends at Construct Capital and Bling Capital among others.
Ita and Fred, thanks for letting us partner with you on your journey to reimagine modern-day package delivery.