Wednesday, July 30, 2014
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Delivery: Not just for pizza anymore

 Shopping, delivery apps let students use phones to bring the goods

It is Friday and you have just returned from a grueling day of work. The refrigerator in your apartment is completely devoid of food, except for that leftover Chinese takeout from the week before. You are hosting a party in a few hours and need to serve food and alcohol to a large guest list.

Most individuals are subject to budget and time constraints and can only manage to accomplish so many tasks. Enter real-time delivery services. Real-time delivery services have expanded in popularity in major metropolitan areas such as Boston and have increased efficiency for many.

The dreaded weekly grocery trip may no longer be part of your routine, thanks to Instacart. The hassle of placing a restaurant order via phone may be solved with Foodler. The burden of hauling cases of wine to your apartment may be alleviated by using Drizly or DrinkIn. These companies are innovating in the space ecommerce behemoths such as Amazon have not yet touched.

Instacart is a service that allows users to order groceries from local retailers using their computer or smartphone. Its services were made available to Boston residents since December, according to Heather Wake, general manager of Instacart.

“We are a same-day grocery delivery service,” Wake said. “We are the only service that can deliver groceries from multiple stores to customers within an hour, two hours, same day or future days, so customers in Boston can choose and mix items from multiple stores in one order.”

Working with local retailers, Instacart provides customers with personal shoppers to fulfill their needs, Wake said.

“Currently we are delivering from Shaw’s, Market Basket, Costco and Whole Foods in Boston so customers can order from any one of those stores all in one order,” she said. “And really, what we are offering to customers is the ability to have the convenience of ordering groceries online and getting it delivered to them by one of our personal shoppers. That’s really what we’re doing for customers, really make their experience in grocery shopping different.”

Using Instacart to place an order is a streamlined process. Customers simply access Instacart online or through a mobile app and they have the ability to choose and mix items from stores in one order, said Wake.

“So once the customer places an order on either their app or website, we have a smartphone app for our personal shoppers, so once the customer places an order the personal shopper gets a notification that there’s an order available for them,” Wake said. “The notification tells them what stores to go to. Once they’re in the store, the app will tell them which aisle and shelf each item is located. Sometimes shoppers will work on several orders at once, usually two. The shopper is fulfilling the customer’s order in the store. They’re going through the store, picking items that the customer has chosen and get the delivery to them in the allotted time frame. So the app the personal shopper is using is what is guiding them through the store and they also get suggestions to deliver it to their customers.”

Orders of 15 items or less are eligible for a one-hour delivery for a fee of $14.99. Should the customer want his or her groceries at a later time, the delivery fee is $3.99. Instacart also mandates a minimum $10 order, according to Wake. Though the experience is efficient, it also manages to be personalized.

“Sometimes they may want to add an additional item to their order,” Wake said. “So if they want to add an additional item after they have placed their order, they can actually simply go back online to our website or app and add items to their order through that before the shopper has started to shop. And once the shopper is in the store shopping for items, they may find items that are out of stock, or not good quality so they are reaching out to customers and asking the customer and giving suggestions for replacements and making sure the customer is OK with it. The customer also has the opportunity to talk to the shopper about any other concerns they may have,”

Like Instacart, Foodler is a service that enables users to order to their home online or via a mobile app. Launched 10 years ago, Foodler currently services 500,000 users in the United States and Canada, said John Jannotti, cofounder of Foodler.

“We have a strong presence in cities, so large metropolitan areas, probably a total of maybe 400 to 500 cities if you were to count Somerville and Cambridge and different cities in Boston,” Jannotti said. “So there’s hundreds of cities. We’re strongest in the eastern half of the country, eastern half of the U.S. And most large metropolitan areas, we have 100 to 200 restaurants, at least.”

Coordinating deliveries for approximately 600 restaurants in Boston with the help of services such as Dash, Foodler has an especially strong presence with college students, who comprise half of the Foodler-using population, said Jannotti.

Foodler is a very different company today than it was in 2004, when it launched. Jannotti said that he initially founded Foodler with the intention of simply replacing a traditional menu.

“Early on, at first, we wanted to replace a paper menu. So instead of a paper menu, you go to Foodler and see what’s available. But over time, we realized that the nice thing about online service or electronic service is that you can actually build something that’s better than a paper menu,” Jannotti said. “For example, you can keep track of what you ordered before. We can suggest foods that you might like because of the things you have ordered before. We can show you what the most popular items are. We can keep track of ratings. I think the main thing is that we constantly try to figure out ways to make the experience better.

“So over time, that’s what we try to figure out. Which restaurants you see on the screen on Foodler, that’s based on all sorts of criteria like how far away they are from you, what the rating is, what cuisine, so doing that kind of stuff is the biggest difference, the realization that we can do better than a paper menu rather than just replacing one.”

If you need a drink to go with all of that food, Drizly and DrinkIn aim to provide a user-friendly experience for ordering alcohol.

Drizly, a mobile app that launched in winter 2013, recently received $2.25 million in seed funding and is growing at a rate of 30 to 50 percent every month and offers services in Boston and New York City, said Nick Rellas, cofounder of Drizly.

Like Instacart and Foodler, users can receive their delivery in less than an hour. But unlike Foodler, Drizly’s main customer segment is not college students, Rellas said.

“What you will see on the app is that it’s skewed toward a higher-end clientele, and so you won’t find Natty Light on the app,” he said. “The average user is 29, 29 to 31 years old. It’s split 50-50 male to female and on average, orders over $60 worth of alcohol. It’s pretty evenly split for us, 40 percent liquor, 30 percent beer and 30 percent wine.”

Rellas emphasized the importance of being compliant in a highly regulated industry.

“We set up a system to help you get your alcohol and then of course, while I can’t speak exactly to what’s going on in other places, Drizly has a compliant model. That’s a huge value added. When you’re ordering, you know it’s happening legally,” Rellas said.

“We don’t touch the three tiers of alcohol, the brand, the distributor, the retailer. We are going to provide value for everybody. Especially as a young entrepreneur, it’s important to understand that these are sophisticated business owners. They are savvy with what they do. Bringing in technology to this highly regulated industry, we needed to do that in a way that made everybody comfortable — regulators comfortable, stores comfortable. We have taken a thoughtful approach. It’s not shoot first, questions later.”

Another entrepreneur seeking to innovate in the alcohol industry is Pablo Bello, founder of DrinkIn.

“I was passing by a liquor store and thought, ‘liquor really has not changed,’” Bello said. “So looking back, it’s been the same. Now, after I left Rest Devices, my first startup, I thought that it could be a space where there could be a lot of disruption, more so than a simple ecommerce site.”

DrinkIn launched its beta in October to test the market and see if bike delivered booze was something Boston wanted.

“We partnered with a store in Cambridge, in Central Square, and told them that we were almost a gateway … Drizly’s model is more about working with liquor stores — they’re doing the delivery. That’s sort of what we wanted to do but we’re doing the deliveries. We wanted to see what it was like; it was a bit of learning. We just did beta real quick. We completely bootstrapped all the way till now, and we didn’t feel that was disruptive enough,” Bello said.

Though DrinkIn received 250 users within the span of three or four days, Bello said he closed the beta at the end of December, halting DrinkIn’s alcohol delivery services with bikes.

“That was for us to do a test and earn from the space and work with liquor stores and see what users care about, we talked a lot to users,” he said. “Really what we felt was that we weren’t being disruptive enough. We didn’t want to work with liquor stores to have them do the delivery or even us. So, for us, it’s to get our own license and control our own inventory and really try to innovate in the logistics side and create the best website and app for that so the focus right now is on our website.”

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