How a Berlin start-up is challenging Amazon in the lockdown
Logistics software firm Banbutsu boosts local traders by enabling same-day delivery.
Berlin-One of the biggest challenges of e-commerce is logistics. When, for example, a customer in Friedrichshain makes an online purchase from a toy shop in Mitte, the package is first brought to a distribution centre outside of Berlin. The parcel will sit there for a while and then be passed on to a delivery driver who then drives it back into the city and delivers it to the customer.
"This often results in long, unnecessary delivery routes that eat up valuable time and resources," says Michael Wolters, managing director of the software company Banbutsu.
The worrying ecological footprint of such long transport routes is what sparked Wolters to found the company, which hopes to boost local retail while having a positive environmental impact.
This is especially important now during the corona crisis, says Wolters. He says Banbutsu can deliver goods for almost every shop in Berlin at least as fast as any parcel service. To be able to do so, the start-up has developed a technology that optimises retailers' e-commerce logistics. Wolters promises that anyone who orders online by 4pm from a shop that uses Banbutsu will receive the wares the same evening.
To make this work, Banbutsu cooperates with courier firm Packator. Depending on the order, the drivers pick up the goods directly from the shop by van, cargo bike or car and deliver them directly to customers – without any detours. The software calculates which driver is best able to take which goods where, ensuring the fastest and most efficient route.
How can retailers use Banbutsu?
"We cooperate with the Shopify platform, which offers online shops for retailers," says Wolters. Over 600 stores in Berlin have created their online shops with Shopify. "These are boutiques, toy stores or bicycle shops. From now on, they can all use Banbutsu."
At the moment, retailers have to write to Banbutsu to manually activitate the service. In the future, set-up can take place via Shopify.
Cosmetics retailer Purish first to use the software
As soon as a shop has integrated the service on their website, customers can select between parcel services like DHL and UPS and "same day delivery" by Banbutsu. Retailers don't have to use Shopify to use Banbutsu.
"In principle, every shop in Berlin with an online presence can activate same-day delivery," assures Wolters.
The first Berlin e-retailer to use the service is Purish, which sells cosmetics over its Shopify store.
"We've been using Banbutsu for a month now. The concept has been received well. Some customers have already chosen the new delivery option," says managing director Lucas Fischer. Banbutsu is free of charge for Purish except for the cost of the courier, he adds. Depending on the value of the shopping basket, the shipping costs could also be reduced for customers in the future.
"We've definitely noticed that customers are willing to pay more money if they need their order promptly for certain occasions," Fischer says.
He believes that Banbutsu can boost small shops.
"If local shops can offer fast shipping, we can hold our own against the big corporations," says Fischer. "Thanks to the short delivery distances, Banbutsu also scores points in terms of sustainability. This is becoming increasingly important to a lot of customers."
Banbutsu also offers its platform in Munich, where the company cooperates with DIY stores.
"We want to work with even more retailers in different cities," says Wolters who adds that "real-time" delivery will be offered in future. "We developed the software to create a holistic solution for the retail shopping experience."
A long-term strategy, he said, is to connect different sectors with the software. In the travel industry, for example, this could mean that a hotel stay could be linked up with a car-sharing service.
"We still have plenty of ideas," says Wolters.
But for now, it's all about retail. December is usually one of the strongest months of the year but the hard lockdwon put an abrupt end to Christmas trade. Shopping is now done online. Giants like Amazon appear to benefit the most, attracting customers with a wide range of products and fast shipping. But will the package arrive on time? The big suppliers are currently under pressure, and Amazon is regularly hit by strikes.
Many smaller shops are fighting for their lives. The German Retail Association (Handelsverband Deutschland, HDE) predicts that retailers will lose about €6bn this year compared to 2019 thanks to the hard lockdown, so any idea to improve the balance sheet is welcome.