Same-day delivery: every minute counts

Tiramizoo is one of the pioneers in same-day delivery of products in Germany. We interviewed Michael Löhr, founder and Managing Director, and Philipp Walz, co-founder and Head of Sales & Marketing, who explained what matters in this business.

How do you know what exactly consumers are looking for in same-day delivery solutions?

Michael Löhr: Well, of course we don’t know all of our clients’ consumers. But we learn something new with each new partner, usually through a pilot. We cater to each seller and, on request, can even adapt our routes and times for loading. I’d call us the world champions in piloting solutions.

There is a strong trend toward same-day delivery. The slightly higher cost isn’t a concern for consumers in certain situations, for example if an important electronic component or charger breaks or if they run out of toner or paper. In that case, all that matters is getting a replacement quickly. Often it’s also about convenience for the consumer. These two factors are what same-day delivery combines.

At the same time, consumer behavior is constantly evolving. For example, customers are interested not only in quicker delivery; they also want their delivery to arrive at a specified time, in other words deliveries that are reliable, predictable and easy to integrate into their day. Evenings are becoming a popular delivery time since that’s when customers are usually at home. These are the kinds of trends we need to be able to react to.

And what about collection?

Philipp Walz: Returns are an exciting new segment. We pick up returns for Zalando in 60 minutes or less in Berlin, Stuttgart and Munich. This keeps consumers from having to go to a physical storefront or from having to wait in line. We create a customized returns website for sellers to enable booking, collection and delivery to the fulfillment center or store.

What do dealers want today?

Michael Löhr: Many dealers have realized how necessary digital solutions are for implementing the right omnichannel strategy. We help them make important logistics decisions since same-day delivery is also about the right IT tools and experience.

It makes no difference whether we deliver products from a fulfillment center or a retail store. Everything needs to go smoothly. These days companies have retail outlets in Hamburg and a fulfillment center in Munich, for example. Our network allows us to organize same-day delivery in such a way that the end customer doesn’t know what comes from a retail outlet and what comes from Munich. Our network can reach up to 83% of the population, and that’s huge.

What do the sellers you work for have to do?

Michael Löhr: Very little, in most cases. For deliveries from stores, for example, we only need a click and collect process and a process for pick-up by couriers so that handovers are legally covered. Most processes run automatically over IT interfaces to the dealer’s online shop. The process for returns is even easier. We have firm standard processes so that sellers can minimize their effort and expenses.

We have open source IT tools and API interfaces to be able to integrate into any retail software. The seller just needs to decide during integration what Tiramizoo services it wants and at what point in the process it wants them to come into play.

Everything is synchronized in the background so that our network can react as quickly as possible. Every minute counts in our business.

Some automotive manufacturers are having Tiramizoo deliver spare parts to auto shops. Isn’t that much more lucrative for you?

Philipp Walz: Spare parts logistics varies depending on the city. We work for different auto manufacturers and have customized solutions for each of them that are very appealing. Even car manufacturers are increasingly setting themselves apart from the competition by offering professional services. And I’m not talking about e-commerce processes or prices. Still, we’re unique in this niche B2B field and there is a certain growth curve we always have to follow. But it’s not our core business.

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Who is out in the field working for you? Isn’t it becoming harder and harder to find good couriers?

Michael Löhr: We have up to 3,700 independent couriers at our disposal, but that doesn’t mean that all of them are working for us at the same time. The market has indeed grown, and competition has gotten tougher as a result. What’s more, consignees in Germany can’t really judge delivery by price since delivery is often free. Price and quality continue to be the deciding factors for our same-day services. We have to work with the best drivers available to even be able to offer our services.

What are your feelings about platforms, in other words, having private individuals work as couriers and using their personal car?

Philipp Walz: It’s an interesting concept. Amazon flex is moving in that direction, for example. It’s not an option for our normal operations right now. The volume we transport means greater responsibility and necessary monitoring. But who knows? We may feel differently in a few years.

 

Putting it into perspective

The consultancy McKinsey estimates that the market for same-day delivery will reach some EUR 3 billion in western Europe by 2020 – that’s 15% of standard parcel business. Today less than 1% of parcels are delivered same day. Consumer goods, electronics, fashion, DIY products and jewelry are the main industries that lend themselves to same-day delivery.