The delivery economy

January 12, 2018

Internet delivery services win terrain in the hearts and minds of users. What are the drivers behind at-home delivery services, like those in food, flowers, books, and merchandise? They fit our busy lives and offer the service we only used to get in the high-end stores. There is a reason to think that the delivery business continues to expand, grow, and specialize further in the coming years.

Our observations

  • Deliveroo, Foodora, Uber Eats are growing and expanding rapidly in Europe and the U.S.
  • The growth of the food delivery companies also triggers criticism, for these companies offer low salaries and strict work-schedules to employees (the cyclist with the large backpacks) while making high profits. SMEs in food (restaurants, snackbars, etc.) are also critical about the profits food delivery companies make.
  • Amazon and Bol.com have offered faster (possibly same day) delivery services in the Netherlands since 2017. In some large U.S. cities, Amazon can deliver even within a few hours.
  • Dutch supermarkets introduce delivery services of food packages, partly inspired by the success of Hello Fresh.
  • General retail companies also follow, for example construction markets such as Karwei, Gamma, Praxis, and Hornbach and fashion stores such as Zara and H&M.
  • Zalando offers fashion advice to its customers. Other online fashion stores follow this path as well.
  • Experimental new delivery services are also successful, such as Bloomon in delivering flowers.

Connecting the dots

There are several consumer trends related to the rise of the delivery economy that are also reinforced by it: time saving, more convenience, more luxury, and an intensification of product experience.An obvious driver behind the rise of companies such as Foodora is the convenience they offer. You do not have to go to your favorite restaurant anymore; it comes to you. This is related to the time saving aspect, which is especially relevant for supermarket delivery services. Convenience and price do not fully explain the success of Hello Fresh, Zalando, and Bloomon. What these companies offer is ‘affordable luxury’ at home. Bloomon offers stylish flowers every two weeks. A distinguishing aspect of their services it that their flowers are fresh and last for two weeks. Due to their effective supply chain, they do not lose the time in between production, retail, and consumer; they deliver directly from the flower farms. Hello Fresh has the advantage of not only offering luxury food, but also supplying recipes and therewith selling cooking skills and ideas on forgotten or rarely used products. We can see comparable developments in clothing where product advice is growing. Zalando, for instance, offers tailored fashion advice. Delivery services help to develop and refine tastes and skills. The difference between supermarkets, Hello Fresh, and Bloomon is the membership model. Membership is not (yet) normal in clothing.What are the drivers behind the delivery economy? Most importantly, people win time that they no longer want to use for shopping. In bigger cities, it is normal that people live in two-income families. Simply saying, there is less free time left, and the spare time is preferred to be used intensively. Indeed, the delivery economy does not compete on prices but on services.Another driving force is the growing need for personalized products. People want to consume in a more differentiated way; special clothing combinations, new recipes every week, fashionable flowers, etc. All of these can be offered in stores, but high service and 24/7 availability are more easily offered online than offline. Due to the aggressive sales strategies of delivery services – customers need to stay for a while, and companies get their time to impress customers – this business has time to build a relationship with consumers.

Implications

  • Large platforms offer online products for a while now; we can expect the rise of smaller special and luxury product delivery companies specialized in coffee, wine, biological food, etc.

Series 'AI Metaphors'

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1. The tool
Category: the object
Humans shape tools.

We make them part of our body while we melt their essence with our intentions. They require some finesse to use but they never fool us or trick us. Humans use tools, tools never use humans.

We are the masters determining their course, integrating them gracefully into the minutiae of our everyday lives. Immovable and unyielding, they remain reliant on our guidance, devoid of desire and intent, they remain exactly where we leave them, their functionality unchanging over time.

We retain the ultimate authority, able to discard them at will or, in today's context, simply power them down. Though they may occasionally foster irritation, largely they stand steadfast, loyal allies in our daily toils.

Thus we place our faith in tools, acknowledging that they are mere reflections of our own capabilities. In them, there is no entity to venerate or fault but ourselves, for they are but inert extensions of our own being, inanimate and steadfast, awaiting our command.
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2. The machine
Category: the object
Unlike a mere tool, the machine does not need the guidance of our hand, operating autonomously through its intricate network of gears and wheels. It achieves feats of motion that surpass the wildest human imaginations, harboring a power reminiscent of a cavalry of horses. Though it demands maintenance to replace broken parts and fix malfunctions, it mostly acts independently, allowing us to retreat and become mere observers to its diligent performance. We interact with it through buttons and handles, guiding its operations with minor adjustments and feedback as it works tirelessly. Embodying relentless purpose, laboring in a cycle of infinite repetition, the machine is a testament to human ingenuity manifested in metal and motion.
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3. The robot
Category: the object
There it stands, propelled by artificial limbs, boasting a torso, a pair of arms, and a lustrous metallic head. It approaches with a deliberate pace, the LED bulbs that mimic eyes fixating on me, inquiring gently if there lies any task within its capacity that it may undertake on my behalf. Whether to rid my living space of dust or to fetch me a chilled beverage, this never complaining attendant stands ready, devoid of grievances and ever-willing to assist. Its presence offers a reservoir of possibilities; a font of information to quell my curiosities, a silent companion in moments of solitude, embodying a spectrum of roles — confidant, servant, companion, and perhaps even a paramour. The modern robot, it seems, transcends categorizations, embracing a myriad of identities in its service to the contemporary individual.
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4. Intelligence
Category: the object
We sit together in a quiet interrogation room. My questions, varied and abundant, flow ceaselessly, weaving from abstract math problems to concrete realities of daily life, a labyrinthine inquiry designed to outsmart the ‘thing’ before me. Yet, with each probe, it responds with humanlike insight, echoing empathy and kindred spirit in its words. As the dialogue deepens, my approach softens, reverence replacing casual engagement as I ponder the appropriate pronoun for this ‘entity’ that seems to transcend its mechanical origin. It is then, in this delicate interplay of exchanging words, that an unprecedented connection takes root that stirs an intense doubt on my side, am I truly having a dia-logos? Do I encounter intelligence in front of me?
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5. The medium
Category: the object
When we cross a landscape by train and look outside, our gaze involuntarily sweeps across the scenery, unable to anchor on any fixed point. Our expression looks dull, and we might appear glassy-eyed, as if our eyes have lost their function. Time passes by. Then our attention diverts to the mobile in hand, and suddenly our eyes light up, energized by the visual cues of short videos, while our thumbs navigate us through the stream of content. The daze transforms, bringing a heady rush of excitement with every swipe, pulling us from a state of meditative trance to a state of eager consumption. But this flow is pierced by the sudden ring of a call, snapping us again to a different kind of focus. We plug in our earbuds, intermittently shutting our eyes, as we withdraw further from the immediate physical space, venturing into a digital auditory world. Moments pass in immersed conversation before we resurface, hanging up and rediscovering the room we've left behind. In this cycle of transitory focus, it is evident that the medium, indeed, is the message.
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6. The artisan
Category: the human
The razor-sharp knife rests effortlessly in one hand, while the other orchestrates with poised assurance, steering clear of the unforgiving edge. The chef moves with liquid grace, with fluid and swift movements the ingredients yield to his expertise. Each gesture flows into the next, guided by intuition honed through countless repetitions. He knows what is necessary, how the ingredients will respond to his hand and which path to follow, but the process is never exactly the same, no dish is ever truly identical. While his technique is impeccable, minute variation and the pursuit of perfection are always in play. Here, in the subtle play of steel and flesh, a master chef crafts not just a dish, but art. We're witnessing an artisan at work.
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