Shutl, the super-fast online delivery startup, has signed a deal with retailer Argos, allowing customers to get their goods delivered as soon as 90 minutes after ordering.
The six-month trial with Argos started last week and only covers 12 central London stores for now. Customers ordering from argos.co.uk can have their orders delivered within 90 minutes or within a one-hour delivery window between 9am and 9pm, seven days a week.
Argos recently revealed that 22 per cent of its total sales in FY 2009/10 were customers using the online “Check & Reserve” service, with this channel growing by 36 per cent for a second year in a row. For Shutl, this means the new Argos contract could be very lucrative, especially when it gets rolled out to other UK cities later this year.
One of the biggest downsides of shopping online has been waiting for delivery, and this is where Tom Allason spotted an opportunity. “Online shopping has come a long way in 15 years,” says Tom Allason, “but delivery has not. We’re changing all that.”
When a customer orders a product, the store sends a message to Shutl containing the weight and dimensions of the goods plus the store address.
Shutl then automatically gathers quotes from relevant local couriers and combines these with rating data (based on tracking previous deliveries) to select the quote that offers the best balance between price and quality. This ensures that better-rated couriers can ask for higher prices and still have a good chance of being selected.
Shutl’s system also allows couriers to offer discounted deliveries during slack periods or when there is spare capacity. A call is then made to the courier’s order-management system, just like any other order.
Finally, a GPS tracking facility in partnership with Bing Maps allows shoppers to track their deliveries in real-time via the Shutl website.
Shutl’s delivery service is also very competitive. Prices start at £4.95 (£1 cheaper than Argos’s existing three-day delivery service, and much cheaper than Amazon’s £14.99 evening delivery service).
“Argos are doing millions of transactions a year,” Tom Allason tells the Telegraph. “Getting a small volume of that would be sizeable. If we make this work for them, that’s the best marketing that we can do. We want consumers to rave about this and start to expect it.”
Allason adds that the vast majority of the £4.95 delivery fee will got to the courier companies. “We’re a high volume, low margin business. We have no moving parts. It’s in our interests to get the costs as low as possible because the consumer is more likely to convert.”
We picked Tom Allason, the 29-year-old founder and CEO of Shutl, as one of our 30:30 Vision winners earlier this year, singling out Shutl, his e-commerce delivery service, for potentially “hitting the jackpot”. Previously Tom Allason founded and ran the £7.5m eCourier.co.uk.
London-based Shutl secured £500,000 of seed finance from a group of investors that includes Bebo founder Paul Birch, LoveFilm investor Simon Murdoch and Big Bang Ventures last year. Allason expects to raise more finance soon, and is likely to do a VC round in the first quarter of 2011.