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The recent delivery disruption caused by snow in the UK has
highlighted the importance of reliable fulfilment of online and mail order
purchases with several e-tailers warning customers of potential delays and
stock shortages.
Royal Mail parcels service has played its part in getting goods to
customers whatever the weather, but concerns over last year’s industrial action
have prompted potential competitors to launch new services aimed at the
lucrative logistics of internet shopping.
Home Delivery Network Limited (HDNL) has been snapping at Royal
Mail’s coattails since 2005 and today delivers to all 1,760,000 UK postcodes.
The company claims that two-thirds of the UK population receive at least one
HDNL delivery each year, with over 2 million items delivered in Northern
Ireland.
At the start of 2010, the parent company announced that it has
acquired the UK arm of the DHL Domestic business from Deutsche Post. HDNL
claims that the combined operation will be “capable of withstanding
intensifying competition from a wide range of traditional B2C and B2B carriers,
as well as challenging the Royal Mail more effectively”.
HDNL Chief Executive Brian Gaunt forecasts that the combined
businesses will have annual sales of more than £600 million and will deliver
more than 180 million parcels each year. The acquisition follows the launch
last Autumn of HDN Lite, which is aimed at businesses sending large volumes of
parcels under 2Kg, such as entertainment products and books, and is in head-on
competition with Royal Mail parcels.
PayPoint, the payment collection network that has over 23,000
outlets in retailers across the UK, launched Collect+ (pictured) in September
2009. A joint venture company with HDNL, it uses more than 4,000 convenience
stores and small businesses in the PayPoint network to address the problem of
“failed deliveries”, which Collect+ Head of Corporate Affairs, Peter Brooker,
identifies as a significant obstacle to the growth of online shopping.
“Every year between 10% and 15% of all deliveries from
conventional carriers – that’s 120 million packages – cannot be completed and a
card is pushed through the letterbox,” says Brooker. “The result is a journey
of up to 10 miles to collect the goods from the nearest distribution centre,
leaving the customer unhappy with the entire e-tail shopping experience.”
Collect+ offers a fixed-price service that allows consumers to
collect, return and send internet acquisitions from PayPoint retailers enrolled
in the scheme. Urban customers are usually within a mile of the nearest
collection point, according to Brooker, while rural residents will find a
Collect+ location under five miles from home.
Customers can nominate their most convenient outlet, which could
be close to a station or their place of work, and they are sent a text message
when the goods are ready for collection. “Not only is the service convenient
for buyers, because there is full track and trace, but also the seller can have
complete confidence that the parcel reaches the right person,” said Brooker.
“The service is ideal for high-value deliveries of parcels under 10Kg and it’s
already being used by large and small retailers alike.”
Another recent challenger to Royal Mail parcels is Shutl, which
launched in London in December and has ambitious plans to cover the rest of the
UK within the first quarter of 2010. “Why wait for it? Shutl it!” is the
company’s slogan, backed by a partnership between retail outlets and local
courier services that aims to reduce waiting times for deliveries from days to
hours.
Shutl matches the carrier best suited for each delivery with the
nearest retail stockholder, using its database of local services. Goods ordered
online can be delivered direct to home or office within 90 minutes, or in any
24-hour window after that, according to founder Tom Allason, who secured
£500,000 of VC backing for Shutl at the end of 2009 and anticipates further
funding in the future as the operation expands to the whole of the UK and
beyond.
The shift to online shopping has certainly changed consumer
expectations in a society that more than ever “wants it now!” While the pack of
private operators dogging the heels of Royal Mail parcels grows on an almost
weekly basis, the leader remains profitable and is determined to win new
business in the face of the competition, according to Royal Mail Senior
External Relations Manager James Eadie.
“New products and services give us the very best chance of winning
packets and parcels business in an intensely competitive marketplace,” says
Eadie. “Our network is unrivalled, there are 1,400 delivery offices and a
network of local Post Offices numbering over 11,000. Although the snow and bad
weather affected all delivery services, our postmen and women managed to
deliver to most addresses on time.”
Eadie said that the scale of the Royal Mail operation is often
overlooked with 155 million items delivered for Christmas 2009, an increase of
10% on the year before. While acknowledging that failed deliveries do occur,
Eadie is confident that Royal Mail customers are offered more options to
collect their parcels with free redirection to another address in the same Post
Code area or any local Post Office.
He dismisses reports in some newspapers that businesses and
consumers are dissatisfied. “Last year we announced £120 million investment in
modernisation with 9,000 additional handheld tracking devices to handle the
packets and parcels generated by the increase in internet shopping,” he said.
“Royal Mail operates throughout the UK and inevitably we suffer delays and
hiccups on an average working day but we intend to win and retain business.”
In a fiercely competitive market, Royal Mail is not taking
business for granted despite the competition. Christmas online sales this year
were up by 29%, according to e-tail research group IMRG Director of Operations
David Smith. That’s a big market opportunity for delivery services whatever the
weather.
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