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How Milkman Finds Balance Between Convenience And Cost By Integrating E-Commerce And Logistics

Jared Polites
·4 min read

Founded in Italy in 2015 by Antonio Perini and Tommaso Baù, veterans of vehicle routing optimization and GPS tracking, Milkman Technologies is a last-mile delivery orchestration platform that offers technology for designing optimal delivery experiences to logistics teams and organizations around the world.

Milkman helps retailers carry a promise of exceptional customer experience from purchase to delivery by offering a dynamic set of delivery options and by utilizing tailored service based on customers’ unique preferences and needs. Milkman’s data-driven approach allows for e-commerce and logistics integration at the point-of-sale, enabling choice of convenience and cost.

2019 has seen a global boom in the e-commerce sector, from parcel to groceries, amounting to more than $3.5 trillion worldwide. According to Shopify, the e-commerce sector is expected to nearly double by 2023 to more than $6.5 trillion. Naturally, the logistics sector is at the receiving end of this momentum, with more orders leading to higher expectations of delivery flexibility and customer service.

Antonio Perini, CEO and Co-Founder of Milkman, was recently quoted as saying that the basis of Milkman’s success is the belief that human beings are designed to generally choose the more convenient option when making intuitive decisions. “It’s no surprise to see this lead to a race for more speed and convenience in retail,” he said.

However, there’s a clear downside of a one-directional race towards more speed and convenience. At some point, retailers will not be able to absorb the costs of extremely convenient shipping methods or expect shoppers to pay extra for a shipping method they might not need. That is why it is necessary to understand what is important to the shoppers from a logistical point of view, and for that matter, how much they are willing to pay for it.

Optimal Logistics Is Dependent On A Tailored Approach

Perini emphasized that the optimal point between convenience and price is a personal choice that varies from person to person. “Giving your customers balance points between convenience and price will make them far more likely to do business with you. Creating a mechanism for this requires integrating e-commerce and logistics processes, as well as effective communication from the time of purchase to the point of delivery,” he said.

For Milkman, this approach helped it further establish its footing in the logistics sector and led to various prizes for bringing this vision to the market. In 2017, Milkman won the Netcomm E-commerce Award for Best Innovation and later the Innova Retail Award for Best Startup in 2019.

In May 2020, the Milan-based company raised $29.3 million in its third round of funding, including investors from Poste Italiane (Italy’s National Post, which is also one of Milkman’s most prominent clients), P101 sgr, Italia500, Vertis, and 360 Capital. The deal includes an agreement between Milkman and Poste Italiane to create a new premium service, MLK Deliveries, specifically for Poste Italiane’s customers.

To date, the company has raised a total of $41 million in funding with two other rounds of funding in 2016 and 2018. Besides Milan, it also has operations in Rome and Turin, and an office in the U.S. Among its clients are blue-chip brands such as Amazon, Zara, Nespresso, IKEA, Eataly, and EasyCoop, an online grocery service under COOP, the largest supermarket chain in Italy.

Doubling Down On A Winning Strategy

In a recent conversation with Perini, he revealed that Milkman is using the latest funding to expand their territory and fuel international growth.

As one of the first coronavirus outbreak centers in Europe, stats show the subsequent quarantine in Italy has contributed to the surge in online shopping driven by the grocery sector, which was previously a nascent sector. This trend was noticed in the U.S. and in other areas of the world as well.

These reports emphasize there are reasons to believe that COVID-19 may lead to lasting changes in shopping habits, as restrictions limit consumers’ ability to buy goods in physical shops.

This, in turn, creates a ripple effect for the global logistics sector, which means it will continue to show a promising demand and investment. The fact that Milkman has raised funding despite the coronavirus pandemic is also a further nod to the situation. With its preposition to the industry, Milkman is at a strategic place to usher the e-commerce growth globally.

Disclaimer: the writer does not hold any positions or relationships with Milkman.

 

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