The Rounds, a pioneering sustainable e-commerce service specialising in household restocking, is showcasing how innovative use of technology and AI can make last-mile logistics both efficient and lucrative. Their unique approach has enabled them to achieve profitability not just at the individual unit level, but also in their localised fulfilment centres, which serve as the hubs for dispatching a wide variety of grocery and household items.
CEO Alex Torrey shared that “Achieving profitability is a significant step towards becoming cash flow positive, and we're steadily progressing in that direction."
Established in 2019 in Philadelphia, The Rounds has expanded its presence to D.C., Miami, and Atlanta. Their product catalogue has seen a substantial increase, boasting 650 SKUs today, compared to 150 a year back. This diverse range includes household essentials, personal care items, pantry goods, and special products from local vendors like bakers, coffee roasters, and florists. In Miami, they've also introduced alcohol delivery.
For a subscription fee of $10 a month, customers can replenish their household supplies, while significantly reducing plastic and packaging waste. The Rounds stands out with its sustainable delivery model. Instead of the conventional multiple plastic bags, items are delivered in reusable bags or containers. This initiative ensures that about 70% of the products they sell come in reusable packaging.
Underlining their growth, after securing $38 million in Series A funding, The Rounds has prevented 375,000 pounds of packaging waste. Torrey highlighted their six-fold revenue increase, attributing it to improved service efficiency.
“We now average between 15 and 18 deliveries per hour, comparable to the efficiency of UPS," Torrey remarked. By focusing on specific urban ZIP codes and targeting apartment complexes, they've optimised delivery density.
However, the service isn’t the cheapest option available. Torrey clarified, "We offer premium products at market prices without any markup, and they are delivered in eco-friendly packaging."
The Rounds' long-term vision is to enhance their service with the help of AI. Termed the "psychic home manager" by Torrey, the goal is to precisely predict customer needs, ensuring zero waste. AI is already refining its delivery routes and powering its product recommendation system.
Building the “psychic home manager” using AI has been the guiding vision for The Rounds. Torrey elaborated, “In our early days, we had rudimentary algorithms for predictions. Post our Series A funding, we’ve significantly enhanced our predictive capabilities using advanced algorithms and AI."
Despite their achievements, The Rounds has maintained a lean team, emphasising the importance of a sustainable business model in e-commerce. Torrey concluded, “Traditional e-commerce, despite being a major consumer spend category, hasn't evolved much in terms of last-mile logistics. We aim to revolutionise this with an efficient, eco-friendly model that’s beneficial for both business and the environment."