UK retailer Argos adopts Shutl courier-bidding service for faster, cheaper deliveries

Waiting on deliveries has always been one of the downsides of online shopping. UK retail giant Argos has just added a novel delivery option in the London area via a startup called Shutl. Shutl dynamically matches local, business-to-business courier companies with retailers in order to offer faster and more flexible deliveries.

The Shutl Now service guarantees delivery within 90 minutes. With Shutl Later you choose a one-hour delivery window and both options are offered 7 days a week. Shutl claims to be the first company worldwide implementing such a service. “Online shopping has come a long way in 15 years” says Shutl’s CEO Tom Allason “but delivery has not. We are changing all that”.

Argo is the UK’s biggest online and high street retailer with 700 stores and annual sales of 4.3 billion pounds ($6.8 billion). It sells everything from DVDs to dishwashers, sofas to sports clothing. Argos already offers home delivery, but customers can only reserve a window like 7am-12pm, and delivery in less than 2 days adds an extra 19.99 pounds (almost $32) on top of the normal delivery price of 8.95 pounds ($14.25). Shutl deliveries start at 4.95 pounds ($7.88) for a small item like an iPod and 7.95 ($12.66)  for a large item like a 40 inch TV, but the delivery price depends on both the item and delivery distance.

Delivery couriers are regional businesses that handle deliveries between businesses. They don’t tend to deal directly with consumers or with big retailers, but they can be very cost-effective for short journeys. Large retailers normally use mail or global delivery companies like DHL. Shutl allows a courier company to define when and where it has vehicles available and at what prices.

When a consumer orders a product, the retailer then sends an API call to Shutl that contains the weight and dimensions of the items and the store address. Shutl automatically gathers quotes from the relevant couriers and combines those with rating data (calculated from tracking previous deliveries) to select the quote which offers the best balance between price and quality. Therefore, better-rated couriers can demand higher prices and still have a good chance of being selected. A call is made to the courier’s order-management system. For the courier company, this delivery looks the same as any other. The system also allows couriers to offer discounted deliveries during slack periods or when there is spare capacity.

Shutl does not seem to have any direct competitors using couriers. Tiramizoo, an online platform that finds the ideal courier and delivery service for shopping and other errands, seems to be at a very early stage. Shutl currently only operates in London but plans to expand across the UK this year. The company was established in June 2008, has 20 employees and a 150K investment from Big Bang Ventures as well as funding from various angel investors.

I previously covered Shutl back in April just as the service was leaving beta testing.

.