Why Top-Notch Delivery Service Is A Key Driver Of Retail Success
Solution provider AxleHire tells PSFK why delivery is one of the few areas where retailers can truly differentiate—and how his end-to-end platform helps enable last-mile service to drive clients' success
- Daniel Sokolovsky began his career with a food delivery company in Berkley. Now he is the CEO of delivery solution service AxleHire, which helps the likes of Pet Food Express, Blue Apron, IKEA and more execute top last-mile deliveries that keep them leaders of their space.
- Consumers increasingly desire control over their package arrival, says Sokolovsky—and this customization is one of the key points that retailers can leverage to differentiate themselves as the industry enters an era of hyper-personalized service.
- Sokolovsky sat down with PSFK to discuss what consumers really want from their delivery service, why scheduled is more important than on-demand, and how increasingly popular product drops factor into the picture.
PSFK: Could you tell us about your delivery experience and how it led you to start AxleHire?
Daniel: My parents had a courier company. They did low‑volume but high‑margin. Fast-forward a few years, I ended up going to college in Berkeley, and I had a food‑delivery company. I ran it for a year and was exhausted. Every time that the customers would want a refund because their burrito was too cold, I would think, “I want to work with some engineers. I want to be able to create a better distribution system for last-mile delivery.” What we built is an end‑to‑end platform that completely powers next‑day and same‑day shipping. It has the component of routing. It does all of the verification.
In an ideal situation, as long as a driver is on time, we were able to deliver the package safely. 100% of the delivery process, the payment, the invoicing and everything else, is fully automatic, at this point. The only thing that we do from a team perspective is keep everything running smoothly.
How does this service help retailers elevate their service on the consumer side?
Because all of the decision‑making and logistics is digitized, for them, the benefit that they get is we make the shipping better, faster and cheaper.
Our technology enables transparency, track-ability and real‑time updates. This really gives them and their customers greater success and confidence with package delivery.
You as a consumer would see, “Oh, my package is almost there. It's arriving in 18 minutes. If a customer has further question and they call customer service, they check on their dashboard and can see, “Oh, it looks like it's coming between 5:00 and 6:00.” Perfect. It creates a much better customer experience all the time.
It's a lot more updates. It's a lot more transparency. They're able to make edits in real time too. A customer says, “Oh, man, I have this package on the way, but I'm running late to his office. Can I get it delivered to my house instead?” They're able to make those kinds of changes.
You recently acquired a company called Covet and launched services in New York. Can you talk a little bit about the reasoning behind expanding to other markets?
We're right now everywhere on the West Coast. We're in Seattle, Portland, the greater Bay Area, Los Angeles and Phoenix. We felt that New York was the next large step for us to take. We recently raised a round of funding. We've been figuring out how to better service our customers.
When we approached the clients we have on board right now, New York was the main market that they were talking about. It was kind of already on our radar, and then we just had an opportunity to acquire the team at Covet.
How have you seen consumer demands change over the last few years when it comes to delivery and fulfillment?
When we were just starting out AxleHire, people were getting really into on‑demand delivery—I order right now, I get it in 45 minutes or fewer. That was a big push for a lot of companies. There were a lot of deliveries that were going more and more into on‑demand, but it was expensive, and difficult to do with all inventory.
Now what we're seeing, actually, is a lot more consumers are concerned about predictability rather than on‑demand service. We're seeing a lot more people who are choosing delivery windows over not choosing them, so they can know when it's coming and fit it into their schedule.
It relieves a lot of that anxiety that people have, too. I think the good thing about scheduled delivery is that it allows everybody time to prepare. We have enough time to get a driver on the road, to get all the logistics issues figured out, and then the customer's happy, because they now know exactly what time they're getting their package, and they chose it, too. The cost for that is actually lower, around 30%, than an on‑demand delivery.
Product drops are increasing in popularity. Could you speak about any aspects that brands or retailers need to take into account in order to execute drops smoothly?
Every few months, clients contact us to do these drops for them. We did one for Alaska Airlines. We did one for an ice cream company. We always do them for AMC—movies posters that we deliver.
From a retail perspective, drops allow you to do really cool things. You can have a drop at 10 o'clock in the morning, and then customers can have the product before the end of the day. It's exclusive. That's what they made these drops to do.
What are some of the challenges of executing drops seamlessly from a delivery perspective?
I think the number-one challenge is inventory: With these drops, you have a very sudden spike in demand. You need to have a good sense of where your inventory is—how much you have on hand, and also any kind of buffer, for instance, against store theft or retail theft. Having better dynamic control over inventory is the most important thing—and also the hardest part.
What elements should brands and retailers consider when it comes to their logistics?
I was at a conference last week. A company approached me to say, “Oh, we surveyed our customers. We have a very low percentage of customers who are actually interested in faster shipping.” I told him, “You're absolutely right. The reason why you're right is that all the customers who were interested in faster shipping from you guys are already ordering on Amazon and they're no longer your customers.”
A lot of these traditional retailers really need to figure out what the right way is for them to communicate with their customers. I think right now shipping needs to be the number‑one priority for them—because at this point, everyone has the same products. Everyone has the same price point. Everyone has the same warehouse. Everyone has the same everything. The only thing that you can really compete on right now is shipping, whether that's faster, whether that's scheduled.