61.2 F
Los Angeles
Thursday, Jun 13, 2024

Conjure Inc. Prepares for On-Demand Ice Cream Pilot

On-demand delivery company Conjure has temporarily departed from snack and pharmacy items and is doubling down on ice cream through a store-hailing pilot with Mars brands that will route mobile ice cream stores through Hollywood this spring.

“We’re starting with Hollywood and we’re going to scale across West L.A. before moving to the East Coast,” Conjure Chief Executive Ali Ahmed said, adding that the company intends to eventually move into a driverless-vehicle model.

The company’s business model works like this: Customers use an app created by Conjure to order ice cream that is then delivered by a van equipped with ice cream products kept in a cooler. Think of a traditional ice cream truck that instead of roving, delivers to your door in minutes.

“We work with our brand partners to get ice cream. And at wholesale rates, we get preferential prices, because we work with the brands directly,” Ahmed said. “The pricing of ice cream is significantly cheaper than most convenience stores, about 20% to 30% cheaper.”

Other than a hailing fee that is about $2, there are no additional service fees or tipping features involved due to the automated nature of the transaction.

Competition

Conjure finds itself in a market inhabited by a range of competitors, including brick-and-mortar ice cream shops, grocery stores that offer several ice cream selections and, most notably, on-demand delivery apps such as Uber Eats and Postmates.

When it comes to ice cream, Ahmed believes Conjure has an advantage over standard delivery apps.

“With preorder delivery, you have to first create an order and then that order has to be picked up,” Ahmed said. “There’s a significant time in the order-creation process and the pickup process. We get rid of both of those elements.”

Vehicles in the roving Conjure fleet will be equipped with coolers that keep inventory at an optimum temperature and do not require the company to modify the vehicles. Conjure did not disclose the cost of retrofitting its fleet vehicles but did share it used Mercedes-Benz Metris vans procured through a partnership with fleet management and vehicle leasing company Zeeba. Conjure’s fleet is not run by gig workers. Instead, it is operated by a combination of contractors and workers from third-party agencies, according to Ahmed.

Ahmed said having the inventory already inside a given delivery vehicle enables a vehicle to conduct an average of five orders an hour. During a beta test of the program, Conjure found that orders, from start to finish, clocked in at an average of nine minutes.

Ahmed said that determining a new area in which to do business boils down to population density and distance. Taking these factors into account allows the company to contextualize how fast deliveries can be completed. Conjure likes to keep the edges of such areas no more than a 20-minute drive from one another.

Conjure CEO Ali Ahmed, left, and co-founder Tigran Shahverdyan.

“Our first neighborhood basically encompasses (West Hollywood) and Hollywood as one zone,” Ahmed said. “Our zones average between six to 10 square miles.” The next area the company plans on conducting business in is Santa Monica.

Ahmed considers on-demand delivery as a service that creates a challenge of balancing affordability, profitability and speed, or what he calls a “trilemma.” The chief executive believes that because on-demand food trucks, snack shops and ice cream shops such as Conjure carry all their inventory within the vehicles, they can fulfill all three components.

Market share

One may assume that a new player in the ice cream industry such as Conjure would be another nail in the coffin for traditional ice cream trucks, which have suffered from rising fuel and product costs. That may not be entirely true.

Steve Christensen, the executive director of the North American Ice Cream Association, said that offerings like waffle cones with soft serve, dipped cones and blended ice creams hold their own in terms of demand.

“That’s the service you’re getting in a traditional ice cream van, and to tell you the truth, in some markets, soft serve is making a comeback as a retro, cool way to consume frozen desserts again,” Christensen said. “I don’t think (Conjure) is going to replace (ice cream trucks), although there may be some pressure, but a little competition is good for the industry.”

Christensen is also the headmaster of Scoop School, a digital training and education platform for members of the ice cream and frozen dessert community. He cited some pillars of business taught by the school, adding that face-to-face connections and personality are a large part of what ice cream trucks can offer.

“When you walk into an ice cream shop or up to a truck, there’s an environment and there’s tons of memories, particularly when you’re walking into a store that has the smell of waffle cones and perhaps a scooper in a white shirt welcoming you in,” he said.

The ice cream industry veteran believes that although the business model of Conjure is not the same as traditional ice cream trucks or shops, it could engage customers in ways that develop connections. He pitched the idea of telling customers to keep their eyes on the Conjure app for promotional offers or new products.

Conjure’s experience in the on-demand delivery sector is one that has had years to mature. Prior to a rebrand, the company was known as Robomart. Founded in 2017, the company has experience running betas that featured mobile stores offering essential goods.

Now, nearly six years later, the company is headed by Ahmed and his co-founders Emad Suhail Rahim and Tigran Shahverdyan, whose partnership combines experience in robotics, brand management and startups.

“We initially set out to show a vision of a self-driving store that would come to you on demand, and that’s still part of our future plans,” Ahmed said. “We do intend to move to a fully driverless fleet in the future.”

For now, the founders and the company have their eyes on expanding eastward.

“The East Coast expansion is expected for the end of the year, early next year, and we’ve already mapped out close to 3,000 neighborhoods across the United States that fit the right population density and the right size for our model,” Ahmed said.

Featured Articles

Related Articles

ANTONIO PEQUEÑO IV Author