Best Buy adds 11 cities to same-day delivery network

Electronics retailer Best Buy Co. Inc. will step up its competition with Amazon.com Inc. by adding 11 U.S. markets to its same-day delivery partnership with Deliv, a firm that uses an assortment of drivers to provide last-mile deliveries.

Last November, Best Buy launched a pilot plan in San Francisco with Deliv, based in Menlo Park, Calif. New York was added soon thereafter. The new cities, announced last week, are Atlanta, Boston, Chicago, Dallas, Houston, Las Vegas, Los Angeles, Miami, Philadelphia, Seattle, and Washington, D.C.

Online shoppers who order from Amazon have begun to expect fast delivery, and the move allows Best Buy to compete with the e-commerce giant for items from printer ink cartridges to large-screen TVs, Deliv CEO Daphne Carmeli said in an interview.

When customers in participating markets order an item from the Best Buy website, they will now see an option to pick "expedited shipping" for an additional cost of $10 to $20 per order, Best Buy said.

Instead of picking the item from a warehouse, Best Buy fulfills the orders from the nearest of its 165 retail stores in the Deliv coverage area. In response, Deliv notifies its fleet of part-time citizen drivers and guarantees direct delivery within a 15-mile radius of the Best Buy store for orders placed by 3 p.m.

"Our on-demand economy has been raising expectations that same-day delivery is standard," Carmeli said. "If you're selling physical goods, that has become table stakes; to get the package to the customer in a quick and predictable manner."

Delivery predictability is more important than sheer speed because customers want to be at their location when the package arrives. "The worst-case scenario is getting home and seeing that dreaded yellow sticky note that means you've missed the delivery," said Carmeli.

Deliv meets those time frames by using its proprietary routing optimization software to rank the order of pickups and deliveries and then sending those instructions to an app on each driver's smartphone, Carmeli said.

Deliv has been expanding its network quickly since acquiring New York-based same-day delivery firm Zipments in November 2015 and winning a $28 million investment round in February from a group of firms led by Atlanta-based transport and logistics giant UPS Inc.

Amazon, for its part, said last week it was expanding its "Prime" same-day delivery network to 11 markets and adding coverage in Los Angeles, San Diego, Dallas-Fort Worth, and central New Jersey. The same-day service, which is free on all orders of more than $35, now serves 27 U.S. metro areas representing more than 1,000 cities and towns, Seattle-based Amazon said.