Temando boss talks Australia’s delivery advantage
Is one-hour delivery doable in Australia?
“Absolutely,” says Temando CEO, Carl Hartmann.
Internet Retailing spoke with the now San Francisco-based Hartmann when he was in Sydney earlier this month about delivery trends, drones and partnering with Australia Post.
While Australian cities lack the density of San Francisco, New York or London, 60-minute delivery is possible if Aussie retailers capitalise on their store network, Hartmann said.
“If retailers can harness their stores, that is how one-hour delivery is possible,” Hartmann said.
Hartmann predicts the nature of stores will change, becoming smaller format locations to create an emotional connection and build a brand experience. They are also a useful way to shorten the distance between inventory and people.
“This is obviously where data integration becomes a huge part of executing these models because if you don’t have visibility to the inventory in the store you can’t actually do the model in the first place,” Hartmann said.
Hartmann said that Australian retailers are among the best in the world at executing strategies for integrating their stores into their fulfilment system.
“Many of our [Australian] customers have been doing ship from store for many years now. Whereas if I compare our activity in the US, every US retailer wants to talk about doing it, but there’s only a handful that are doing it and the ones that are doing it are only doing it from a very small number of stores.”
The Amazon effect
Hartmann recently attended a dinner in San Francisco of tier one retailers and leading venture capitalists. All the attendees had to go around the table and name the last thing they bought online and who they bought it from.
“The answer in 100 per cent of cases was Amazon.”
“The reason in 100 per cent of cases was fulfilment,” Hartmann said.
Now based in the US, Hartmann said it didn’t take long for his default programming as a consumer to shift and to always shop with Amazon first.
Temando is pitching its product development at providing retailers with the level of control around the delivery provided by Amazon which ultimately translates to better customer experience in the last mile.
“I think it’s important for continued growth in the short-term but in the long-term, it’s helping make them [retailers] defensible against foreign competitors.
“Unless a foreign competitor is prepared to come in and open lots of stores, it’s difficult for them to cut their grass.”
Having recently signed a deal with Australia Post to ‘formalise its friendship’, Temando’s shipping and fulfilment software platform is integrated with Australia Post to streamline access to its premium delivery services and provide intelligent, cost-effective shipping solutions to retailers.
As part of the new partnership, Temando connects with any online store to allow retailers to easily access Australia Post and StarTrack services within their chosen e-commerce platforms.
With reports emerging in late October that Walmart was testing drone delivery, the unmanned aircrafts are back in the spotlight.
Hartman said he sees the long-term potential for drones and the first commercial application for drones is most likely to be delivery of medicine from hospitals to remote areas. As the technology matures, Hartmann expects use cases to be more niche than on a mass scale.
“There is definitely use cases where that makes sense. If you are asking will drones replace couriers? The answer is — on a large scale — no. Because if you literally do the math on how many drones you would need, it would literally be such a noisey future that no one would want to live in it.”
‘The Google of Brisbane’
The Australian company is proud of its Brisbane roots and has no plans to relocate its operations overseas, despite expanding its international operations.
Temando’s product team, who are all based in Brisbane, has increased in number and in two weeks will move into a new office.
“We built a good culture up there [in Brisbane]. I think we have very much evolved into the ‘Google of Brisbane’ as being the employer of choice. We’ve got a brand new Google-esque office that opens in a couple of weeks.
“We’re really proud of the team we could both find and hire and all the jobs we can create in Australia.”
Hartmann said Temando has used the $50 million it raised back in April, in part, to invest heavily in boots on the ground in London, Paris, San Francisco and New York. However, commercial realities make Australia an attractive place to call home. Hartmann said he also regularly encourages American companies to consider Australia as a base.
“A programmer in San Fransisco can be hundreds of thousands of dollars, whereas it might be a fraction of that for Australia and they are just as good, if not better, and they are certainly more loyal.”