Parcel delivery: should the customer be in charge?

Con­sumer choic­es have become increas­ing­ly impor­tant in logis­tics, a mar­ket more used to cater­ing to the busi­ness sec­tor, with the range of deliv­ery options and qual­i­ty of ser­vice now core to the offer­ing. But has the bal­ance of pow­er shift­ed so far in favour of con­sumers that it is the cus­tomer who will soon dic­tate the deliv­ery com­pa­ny, rather than the retail­er? That’s what some par­cel deliv­ery com­pa­nies believe and they are posi­tion­ing them­selves ready for that switch.

The future of logis­tics and the crit­i­cal last mile is being qui­et­ly fought with tech­no­log­i­cal wiz­ardry. Who­ev­er is the best at accom­mo­dat­ing the all-pow­er­ful con­sumer with the most indi­vid­u­al­is­tic and per­son­alised deliv­ery jour­ney will ulti­mate­ly be the win­ner. And there’s a lot to fight for.

There’s a world­wide trend for indi­vid­u­al­i­ty and per­son­al­i­sa­tion, so we have to offer cus­tomers the right deliv­ery solu­tions to meet their needs

Parcel delivery companies in the UK fighting for top slot

Last year, the UK par­cel deliv­ery mar­ket was worth near­ly £10 bil­lion, a rise of 5 per cent on the pre­vi­ous year, accord­ing to analy­sis from the Office of Com­mu­ni­ca­tions, Ofcom, pub­lished last Novem­ber.

Con­sid­er­ing recent growth in online spend­ing in the retail sec­tor, the poten­tial is mas­sive. Lat­est analy­sis shows UK online sales made up 18.8 per cent of all retail spend­ing in Jan­u­ary 2019, while the val­ue of online retail­ing rose by 11 per cent in Sep­tem­ber 2018 com­pared with the pre­vi­ous year, accord­ing to offi­cial fig­ures.

The chang­ing nature of the future of logis­tics is not going unno­ticed by the main play­ers in the UK – Roy­al Mail, Her­mes and Yodel – espe­cial­ly with the entrance into the mar­ket­place of Ama­zon Logis­tics.

In recent years, par­cel deliv­ery com­pa­nies have been step­ping up their con­sumer soft­ware devel­op­ment, improv­ing apps and beef­ing up their web­sites. As well as pro­vid­ing the now expect­ed “in-flight” deliv­ery options of home, neigh­bour, safe place, com­pa­nies such as DPP, Her­mes and Yodel are offer­ing an even greater range of choic­es and one-hour time slots, as well as dri­ver track­ing in real time.

But many of these devel­op­ments offer lit­tle vari­a­tion for the cus­tomer. It is becom­ing trick­i­er for par­cel deliv­ery com­pa­nies to dif­fer­en­ti­ate them­selves. And with the pace of com­pe­ti­tion hot­ting up, with Ama­zon Logis­tics at the fore­front of deliv­ery tech­nolo­gies, the race is on.

What parcel delivery companies are doing to stand out

Since 2016, Ama­zon has been tri­alling autonomous drone deliv­er­ies, which can car­ry pack­ages up to five pounds in weight and deliv­er with­in 30 min­utes. And in Jan­u­ary, it unveiled a new, ful­ly elec­tric deliv­ery robot called Ama­zon Scout. Clear­ly, these kinds of tech­nolo­gies are where the future of logis­tics lies, but autonomous ground vehi­cles and drones aside, how can par­cel deliv­ery com­pa­nies dif­fer­en­ti­ate them­selves fur­ther?

Richard Blown, head of inno­va­tion at Her­mes, thinks he has the answer. He believes that UK con­sumers will soon be giv­en the option to choose the par­cel deliv­ery com­pa­ny when buy­ing online and he is there­fore try­ing to make his com­pa­ny stand out from its com­peti­tors. “It’s about giv­ing cus­tomers more assur­ance and con­trol,” Mr Blown says.

With that in mind, he is posi­tion­ing Her­mes to be the com­pa­ny that brings car-boot deliv­er­ies to the UK. Car-boot deliv­ery is already quite pop­u­lar in Ger­many and Scan­di­navia, and Mr Blown is work­ing on intro­duc­ing it to the UK. The option will work by allow­ing the deliv­ery dri­ver time-sen­si­tive access to a customer’s car boot through a Her­mes app using cloud-based soft­ware.

“It’s anoth­er option for the con­sumer. We hope it’ll hap­pen this year. It depends on the car man­u­fac­tur­ers,” Mr Blown says.

He is also focus­ing his efforts on greater per­son­al­i­sa­tion at Her­mes, which is due to unveil a new prod­uct called Her­mes Play. The ser­vice enables cus­tomers to record a video mes­sage to attach to a par­cel. Using aug­ment­ed real­i­ty, the recip­i­ent can then view the video by hov­er­ing the Her­mes app over the parcel’s bar­code. Mr Blown sug­gests it might be some­thing of inter­est to retail­ers too.

Not everyone believes the choice will be given to consumers

Click-and-col­lect options are also gain­ing trac­tion among par­cel deliv­ery com­pa­nies. Her­mes recent­ly announced a part­ner­ship with InPost, a par­cel lock­er net­work, pro­vid­ing it with a click-and-col­lect ser­vice for cus­tomers to pick up their goods on their way home from work if they don’t want them left with a neigh­bour. Roy­al Mail has also been con­duct­ing tri­als of par­cel post box­es, a new street-lev­el infra­struc­ture pro­vid­ing access to its deliv­ery net­work.

Deliv­ery com­pa­nies may soon have yet anoth­er option avail­able to them. London’s largest bus oper­a­tor Go-Ahead is con­sid­er­ing open­ing up depots as par­cel deliv­ery hubs and pos­si­bly using its bus­es to deliv­er goods around the cap­i­tal to tack­le con­ges­tion.

But not all logis­tics experts agree that the choice of car­ri­er will be in the hands of the con­sumer any time soon. Tim Jones, mar­ket­ing direc­tor at DPD, does not fore­see the choice of com­pa­ny shift­ing to the con­sumer soon in the UK.

Mr Jones says: “It’s true that in the US that’s the norm. But in the UK, the retail­ers want con­trol of deliv­ery due to the cost and ser­vice lev­els. So they might offer pre­mi­um ser­vices, but they won’t nec­es­sar­i­ly list the car­ri­er.”

Neil Ash­worth, chief exec­u­tive of Col­lect­Plus and chief com­mer­cial offi­cer of Yodel, thinks that for now the sta­tus quo won’t change. “Car­ri­ers have to ensure that the cus­tomer under­stands their propo­si­tion and the way they oper­ate,” he says. “It’s very impor­tant to pro­vide choice. There’s a world­wide trend for indi­vid­u­al­i­ty and per­son­al­i­sa­tion, so we have to offer cus­tomers the right deliv­ery solu­tions to meet their needs.”

Parcel delivery companies in the UK fighting for top slot

What parcel delivery companies are doing to stand out

Not everyone believes the choice will be given to consumers