Shopper demand for faster delivery times only continues to grow, and companies have stepped in to fill the gaps. One such leader is micro fulfillment company Ohi, which partners with retailers including Untuckit, Health-Ade, and SolaWave to achieve same-day and sub-2 hour delivery more sustainably. The company, which recently announced a $19M Series A funding round, currently operates across cities including New York, Chicago, San Francisco, with plans to expand to 25 new cities in 2022.
Founder and CEO Ben Jones spoke with Klarna about his company’s unique fulfillment solution for D2C brands, his advice for retailers looking to offer more efficient and sustainable delivery methods, and where he sees the market moving in the near future.
Tell us about Ohi. What solutions are you offering for brands today?
Ohi is an instant commerce platform, enabling same-day and even sub-2 hour delivery for merchants of all sizes. We leverage our proprietary data analytics to help brands place their inventory more effectively, closer to end consumers, and our network of third-party delivery providers manage the last-mile delivery—primarily via bike couriers and walking.
What pain points are you solving for retailers?
Our core belief is that in the very near future, all commerce will be instant—consumers are going to expect everything they buy online to arrive within a matter of hours. The challenge is this trend is currently driven by large marketplaces like Amazon, Target, and Walmart. For anybody else, including brands selling through their own website or who want to stay independent from a large marketplace, it’s becoming close to impossible to compete. There’s a missing technology infrastructure layer enabling any brand to offer this kind of fast delivery experience—that’s where Ohi comes in.
What type of brands and retailers do you work with?
We’re currently focused on brands ranging from early-stage startups to large enterprises, with the sorts of products you might find within a CVS: beverages, alcohol, snacks and condiments, OTC pharma, sexual health/femme health, pet food, beauty, wellness, and more. Essentially, items people want to purchase and receive quickly and that are also low-SKU, high-repeat-purchase products.
Can you talk about the benefits of using your platform?
We help retailers offer a much better consumer experience, and a significant benefit of the Ohi platform is the ROI coming from repeat purchases. When retailers integrate with Ohi, consumers get a high-touch, super-fast delivery experience—receiving their products within two hours, and receiving updates on delivery status along the way. And the shoppers then come back and buy again and again.
By offering fast, convenient delivery options we help brands increase customer lifetime value (LTV) and make more sales conversions. For brands partnering with us, we’ve seen repeat purchase rates go up anywhere between 10 to over 100%. An example: A brand recently signed on with us and within only 60 days they’d achieved a 120% increase in repeat purchase rate. It’s really meaningful.
How does Ohi help brands build a more sustainable supply chain?
Fast two-day and next-day delivery is generally incredibly environmentally damaging. Products are almost always put on planes, which is extremely bad for the environment. With Ohi, our big difference is inventory is forward-positioned within the network so it’s already super local to the end-consumer. When a person orders something, we use bike couriers, scooters, and people on foot to deliver—which are all less environmentally damaging transportation methods. There is a huge environmental impact of reducing CO2 emissions on every order.
Because we are delivering these items point to point, we’re also able to reduce the amount of cardboard and general wastage that normal e-commerce orders generate, because we aren’t throwing something into the back of a van or airplane. The majority of our orders are done in reusable, branded tote bags. This ensures a more premium experience for the shopper and the brands—while also being more environmentally friendly.
Can you share any proof points around Ohi’s sustainable fulfillment methods?
We did a study with Stanford University that showed, when compared to a next-day air order, we have 22x fewer emissions. So it’s a significant decrease. And even compared to a 3-5 day delivery, we have 5x fewer emissions.
What advice would you give to a retailer looking to achieve same-day delivery and make their supply chain more sustainable?
What’s interesting is how strained supply chains are for brands just generally. And as a consequence of that, sustainability goes out the window for many brands—it’s the smallest concern for them when they are much more concerned about just getting products out to their consumers quickly. So we’ve seen less of a focus on sustainability as a top priority because of these constraints.
Beyond that, any brand relying on a single fulfillment node is behind the times and needs to start looking at what it means to have distributed inventory, and what their needs are. Ask yourself, is two-day delivery ok, or do I need something faster? Consider whether sustainability is an important part of your mission.
It’s important for brands to have distributed inventory to meet customer expectations, and there are various companies doing that within a 2-day time frame. Those guys can all help you get things to customers in two days through their network. Ohi goes one level further. If you fast-forward to the future, two-day is not where it ends. Customers will come to expect sub-hour delivery to keep up with their faster-moving lifestyles.
Are there any supply chain myths you can debunk for brands and retailers?
The biggest myth we are debunking is the idea that how you get your goods to your customer—your post-purchase experience—does not matter. I think traditionally that’s how a lot of brands have thought about it. ‘We just need people to check out, and we’ll get them their order when it comes.’
Increasingly, we are demonstrating how the post-purchase experience really does matter. Early-stage founders, you’re in the operations game—not the marketing game. You need to have your supply chain sorted before you start pouring money into digital marketing because if you don’t, you’re going to be constantly falling over yourself as you try to grow. Brands need to ensure they have really a solid supply chain setup. A brand needs strong operators and operations partners who can help them succeed; in those early stages, what matters, is can I get my goods to my customers when they want them—rather than constantly chasing my tail and trying to get things manufactured.
How do brands get activated with Ohi?
Our platform is designed to be plug-and-play for brands, integrating directly into e-commerce platforms and point-of-sale systems, such as Shopify and BigCommerce. Once integrated, retailers are connected directly to our network of micro-warehouses throughout the U.S.