Flexe, the Airbnb of Warehouses, a threat to Amazon?

 Source: Flexe

Source: Flexe

Flexe, the Airbnb for warehouse space, announced a new next-day delivery service, which the company said would give brands the ability to reach 98 percent of U.S. customers faster than Amazon Prime two-day shipping. This was a natural next step for Flexe as they began offering fulfilment services last year.

As eCommerce evolves, customer expectations are trending towards delivery on-demand, faster, flexible, and predictable. If your inventory is not close to the consumer, you are not going to be able to tick any of those boxes, which means you won't be able to compete. Flexe gives retailers a path forward to competing in modern retail with behemoths like Amazon.

Flexe co-founder Karl Siebrecht via Bloomberg:

You can get goods to your customers as fast or faster than you can through Amazon Prime at a competitive price and it’ll show up in your own branded box rather than an Amazon box, that is very important for companies looking to build brands.

The Flexe platform allows brands to focus on their core competencies without building out a logistics network required to meet the needs of increasingly demanding customers. Importantly, Flexe can be considered a completely neutral platform where brands are in control of their brand and user data. This is not the case for brands in the Fulfillment by Amazon network.

According to the Bloomberg article, Flexe already has 25 million square feet of storage, about 25% of Amazon’s capacity. It will be interesting to see if Flexe expands their storage capacity to very localised storage space, which could include non-traditional warehouses. Through artificial intelligence and machine learning, in the not too distant future, retailers will be able to accurately predict demand down to the day. This will create opportunities for retailers to position inventory close to demand and Flexe could be well-positioned to benefit from this trend. Because of this, one could argue that Flexe poses a far greater threat to Amazon’s business than any retailer. As a result, it would not be all that surprising if Amazon or another large retailer invested or acquired Flexe.