Localz solves last mile nightmare
Tim Andrew: An Australian platform solving global last mile delivery issues
Australian digital logistics firm Localz will push into the US next year after building a solid offshore market for its products in the UK where the company leveraged a win from an incubator competition into a European channel.
Localz develops platform based software that puts a layer of transparency around logistics operations. Much like Uber shows customers where a hire car is and how long it will take to reach you, Localz’ solutions show where a service technician is and lets you know when he or she will arrive at a job.
On the goods delivery side, Localz apps can check if a customer is home, and reschedule delivery if they aren’t or send texts warning of unexpected delays.
Localz also has click and collect systems for retailers, and counts supermarket giant Woolworths as one of its Australian customers. The Localz solution is one of Australia’s fastest growing tech exports in field services, with British Gas rolling out an ‘on my way’ functionality to all its field service engineers, whilethe global windshield replacement company Belron is rolling out the solution in seven countries, including Australia.
Localz was founded in October 2013 in Melbourne when chief executive Tim Andrew and two co-founders Melvin Artemas and Peter Williams decided to leave careers at NAB to build a company that solved the problem of how to meld together the different types of location technology available.
“It was a quite technical middleware platform initially,” says Mr Andrew. “Basically, it was used to connect the online world to the offline world.”
The company grew rapidly in its first year, and then had a crack at winning the inaugural 2014 JLAB incubator competition run by UK supermarket and department store operator John Lewis Partnership.
“We got invited to pitch for it as one of 500 companies, got through to the top five and ended up winning the thing,” says Mr Andrew.
“That got us into the UK and European market quite quickly and we did that by using our location technology to improve the click and collect retail experience.”
Localz picked up a chunk of seed capital around the time of the JLAB win, and last year landed A-series funding from European VC Notion Capital.
Since late 2013 the company has grown from its three founders to more than 40 people. Software development is handled in-house in Melbourne, with a commercial team based in London.
The next step is to take on the US market and Localz is currently scouting for a location for its US office which it intends to open next year.
“We are trying to work out where we are going to be – east coast, west coast, north or south.” says Mr Andrew
The firm these days sees itself as an enabler on the fulfilment side what Mr Andrew calls the individual economy or “Iconomy”.
Localz sees the Iconomy as a place where customers increasingly get what they want, where they want it and when they want it.
Mr Andrew feels Australia is lagging behind other markets in the where and when department. It is hard to fathom why in 2018 consumer service calls and goods deliveries (other than hot food) are often done with wide and vague turn-up windows of four hours or more.
If you have ever wondered why a telco technician needs a half day window to turn up and fix something, or why a goods order can’t be delivered when it’s convenient for you, then Mr Andrew has the answer.
“The technology stack that has been developed is done very much for the business’s own efficiency, not to meet consumer demand,” he says.
“What happens at the moment is that an order goes into an ERP or CRM platform that works out which part you want, then that goes to the warehouse management system to work out where it is, and put it on a truck through a transport management system from where it goes to a scheduling system then a route optimisation to make the delivery as efficient as possible.”
“Then, since they don’t know what else is going to come in on that day they will give a scheduled delivery slot of 8am to 8pm and hope that’s all right for you – because that’s what’s efficient for their business.“
Localz is in the process of releasing research that shows the curve of consumer demand for delivery over a day.
“It shows the difference between what service delivery companies actually do versus when consumers want it.
This curve of demand from consumers shows a reasonable peak early before work and then a real spike in the evening between five and nine pm when the majority of the working population want delivery of goods and services.”
The problem according to Mr Andrew is a disconnect between legacy B2B delivery systems that assume a formal receiving process that’s online throughout the business day and the rise of consumer ecommerce and its more individual delivery demands.
“The key thing we give those companies as Localz is the ability to give consumers transparency of when something is actually going to turn up,” he says.
“I can watch it come down the road on a map and know whether I can jump in the shower or not.”
Australia is ripe for disruption in this area.
Mr Andrew believes Australia is ahead on certain eCommerce tools – like electronic payments – but behind on logistics and being able to let consumers know when things are going to turn up.
“In the UK click and collect is ubiquitous, as is a one-hour delivery slot.”
As an example, Localz customer UK parcel delivery firm DPD allows customers to pick their own one-hour delivery slot up until midnight on the day before delivery.
If only we could have the same service here.
Mr Andrew says the challenge at the end of the day for customised consumer delivery is not the technology.
“Generally our technology is the easiest part of the solution, it’s the culture change and organisational change required to do it.”
InnovationAus.com partnered with Localz to present an IConomy Roundtable lunch in Melbourne recently titled The irrational, emotional, uneconomic consumer and to present the findings of Localz’ ICurve Research Report.