There’s still plenty of room for a micrologistics app/service, and there is a way to get one up to speed quickly without having to go through the app stores.
I do not consider myself proficient in coming up with business strategy. Nor am I a successful entrepreneur, having a strong preference to put my time and efforts into technologically interesting directions, often disregarding their financial viability. In short, I am better at building stuff, rather than planning on how whatever it is I’ve created is used to generate revenue and turned into a successful enterprise.
With that said, being familiar with the reality of deliveries from the ground up, and having explored the possibilities of the Telegram Bot Platform, I dare say that there is still a problem in this domain that can be solved systematically and fundamentally. Read on to find out how.
My passion for cycling, combined with an urban lifestyle, kept bringing my attention to this field. Back in 2009 I have built greenie.co.il, a naive (& now-defunct) attempt at getting clients, businesses & couriers to independently collaborate over logistics, by enabling discovery (based on geography & time availability) and communication. It did gain some attention, but was too unspecialized to compete with then-established players like 10Bis in the israeli scene. Plus, the world wasn’t ready - smartphones became common only a couple years later. The (now ancient) source code’s still there..
More recently, during the 2020 lockdowns, I kept myself in shape by working as a Wolt partner courier. A year or two prior, Wolt took the Israeli food delivery scene by storm. Working with them, as well as following the news, helped me reach some insights regarding how they pulled it off.
Ever since Wolt took the Israeli stage by storm, I, a Tel-Aviv based customer, have enjoyed a strong decrease in delivery times and a manyfold increase in selection. They’ve really levelled the playing field.
As an occasional courier my experience was also positive. On busy evenings I’d have my orders lined up and their order of execution made logistic sense. The payment was above market average for food deliveries, though that’s just what I hear, no first-hand experience elsewhere to make comparisons.
The businesses. Wolt, having positioned itself as the main go-to channel for eaters to order online, are in a position to pressure businesses into fees that hover around 30% for every order. And the restaurants aren’t happy. Let’s call them providers from hereon.
Customer satisfaction, I am told, is the thing that’s hardest to achieve and sustain in the food business. So, behind Wolt’s promise of 30-40 minute delivery times there is a well-oiled support team that quickly responds to maintain quality of service for customers, resolves edge cases, and takes care of customer compensation, if all else fails.
In essence, Wolt took the biggest market segment (restaurant deliveries), which happens to also be the one with the lowest margins, and having taken over the market, increased those margins to its benefit, at the provider’s expense.
Here’s a bunch of aspects I’ve identified that Wolt doesn’t cover.
Being the order taker for your client is obviously the most straightforward way of enjoying a slice of the pie, but by no means the only.
So long as a standing interest to cooperate exists (the provider, courier want to secure an incoming stream of orders), the facilitator (platform), and any party that willingly participates in achieving this goal will be rewarded.
It’s true that Wolt courier fees depend on the distance for the courier to travel. However, their current policy includes a minimum fee per order, regardless of how short the run is.
Several high-profile neighborhoods in Tel-Aviv have clusters of establishments (providers) whose interest is to build a customer base with an emphasis on the community. Ordering from close-by results in shorter delivery times, increases the volume of orders and can reduce shipping costs. This opportunity is completely missed, as of now.
There is competition springing up for delicatessen and even groceries. But what I think is the biggest issue here is that the identification of such verticals comes not from the interested parties (consumers, providers) but from outside entrepreneurs. It could very well be that much more can be accomplished with a micrologistics infrastructure than it is realized, if only initiative came from those who are closer to the sources of supply & demand.
Wolt currently optimizes by clustering orders whose providers and clients are geographically close and grouping them with a given courier remains within the time constraints of the courier.
However, many more “long tail” scenarios exist, such as next-day deliveries.
That’s the biggest one, and what I believe is the key to creating something fundamentally better. Wolt’s structure considers three roles, while Wolt itself fulfills a fourth. The three roles are customers, couriers and providers (=restaurants, in Wolt’s case). Wolt fulfills a fourth role (let’s call it the operator role), of being the responsibility, payment and logistics guarantor for mutually beneficial cooperation between the first three kinds of parties.
Because Wolt specializes on a particular vertical (food) on a fixed scale (city-wide) it is not geared to expand and act on different kinds of opportunities (such as the several examples provided above).
That’s the most important bit. A partner on the ground will have an intimate knowledge of how to reach his customers, what to offer them, what problems they need to be solving, how to manage pricing competitively.
It’s too hard to develop your own app. Solving micrologistics is hard. Going through app-store reviews is hard.
So, instead of building their own platform, they need to be given an opportunity to use an existing platform as a service.
In order to differentiate their brand, they can still set up their own website/domain, and run a separate communications channel.
The communication channel is possible by building the solution on top of a messaging app such as Telegram, where each partner can register their own Bot.
Thus, they’ll be using an established communications platform with a large existing user base, instead of bootstrapping yet another native app.
As a technology person, I can make rough estimates regarding the costs of infrastructure development.
As for infrastructure & tech stack, I’ve successfully implemented bi-directionally communicating bots with rich programmable menus, push notifications and so on.
I believe all of the above functionality can be reachedon a development budget of USD 100-150K.
The highest anticipated risks being at the following points:
Despite Wolt's market dominance, alternative food couriers remain, both local and on the metropolitan scale, is a strong indicator there's room to act.
The question lies with the cost of creating a new infrastructure and bootstrapping it with providers & couriers and getting the ball rolling on marketing.
I believe that the marketing part can be delegated to businesses themselves, who have an existing client base they can market to, and whose strong economic interest is to undermine their dependence on Wolt.
© 2021 Web GMA R&D Ltd.