With online shopping in the U.S. expected to hit $54 billion during the holiday season this year, it comes as no surprise that companies that promise to deliver online purchases within minutes or a selected one hour window would want to get in on the action. UK-based Shutl raised $3.2 million in equity investment recently, led by the UPS Strategic Enterprise Fund, to launch its service in North America by early 2013. The expansion will roll out in two phases, with an initial launch in New York City and San Francisco and later in 10 additional cities. Since launching in 2010, Shutl has grown by 50 percent month-on-month and to date covers over 50 cities and in the UK.
Founder and CEO Tom Allason previously founded eCourier.co.uk, which he sold in 2008, and he saw the opportunity to aggregate same-day courier companies into a network. “Shutl gives multichannel retailers [retailers with stores who sell online] a sustainable competitive advantage over their pure play competitors, enabling them to leverage stock located in local stores to provide the shopper with a delivery proposition compelling enough to help them attract and retain customers,” Allason said in an interview.
The company’s platform brings together a network of local same-day courier companies, and matches each delivery in real-time to the appropriate company by weighing factors like performance history, price, and customer ratings. Merchants and retailers can integrate with Shutl’s API, which then offers the service as a delivery option during the checkout process. Once a consumer selects Shutl, they are presented with two options, to have the package delivered immediately within a 90 minute window, or they can select a one hour delivery window on the same day or whatever day that suits them. The company claims its quickest delivery to date was under 15 minutes from the time a customer placed an order online.
The SaaS company charges a commission on every transaction that is included in the price it quotes retailers. Merchants can choose whether they prefer to pass the cost off directly to the shopper to make the service cost neutral for them, or subsidize the service as a means to drive sales.
The company also provides insurance on its deliveries but no guarantees. “Shutl’s brand is on the line for each delivery. It is in our interests to provide the best possible experience since we are motivated by the shopper’s life time value, not maximizing profit on a single transaction,” Allason added.
Startups are increasingly looking to leverage technology to decrease both the inconvenience and wait time for consumers shopping online. Recently, BetaKit covered the launch of BufferBox in Toronto, which provides a secure parcel box in partnership with the city’s public transportation system that allows consumers to access their deliveries on their route to and from work. Another startup Postmates also launched their ‘Get it Now’ service earlier in the year to let consumers use its mobile app and purchase goods from local merchants and have them delivered in under an hour.
However, if Shutl establishes and scales the model to include the same level of courier network partners in the U.S., it could become the preferred method for online shoppers looking to purchase items from bigger retail chains. Although the company’s services won’t be available for shoppers in North America in time for the holidays, the company is poised to shake up ecommerce deliveries both in the UK and abroad.
