It’s an exciting time in the parcel delivery business with new solutions and business models popping up by the minute, it seems. What will parcel delivery look like in the future? Will delivery be made by drones? Autonomous robots or vehicles? Into Smart Lockers? Using crowd-sourced solutions? Same-day or same-hour delivery? Something we’ve not even seen yet?
My prediction is… all of the above! We’re already seeing a phenomenal and diverse set of delivery solutions and new business models being born, but in my mind, most of them have a key thing in common. They are designed to satisfy the needs of consumers, each of whom basically wants delivery “my way!”
We Want It… Where?
There are many aspects of delivery that consumers would like to control in the “my way” model, the first being where the parcel is delivered. Traditionally, that meant to the consumer’s home, but nowadays the list of location types is steadily growing because consumers want delivery where it best meets their needs. That may be where they live, where they work, where they are traveling, or any point in between.
Most of us in the parcel delivery ecosystem are familiar with the more traditional “where” solutions, but the innovation being seen today goes way beyond the traditional.
For example, a pilot program between Audi, DHL, and Amazon gives DHL drivers the ability to access customer car trunks to securely deliver packages to the consumer’s home (where the car would be parked). It may be a natural extension of this concept to include anywhere the car is parked, such as at a work or travel location. In some ways, this concept is similar to those testing parcel delivery to secure parcel lockers, but by using the existing consumer car trunk as the secure parcel delivery receptacle, the cost of installing a new parcel locker is avoided. Entrepreneur CarDrops uses a similar concept of delivery to car trunks but is more carrier-agnostic.
Looking more at the “en route” options, we are seeing rapid growth and expansion of self-service parcel lockers (GoPost from USPS, Access Point from UPS, Amazon Lockers, FedEx Ship-and-Get Lockers, etc.), as well as new entrants in the market, such as postal equipment manufacturers like Bell and Howell, who are developing “smart” parcel locker solutions (CleverBox and PackRobot) to be placed at centralized delivery points.
Innovation around parcel lockers continues to grow, for example, with recent market entrees like CA-based SwapBox which provides secure two-way use lockers for consumers to deposit goods to be shipped (and does the packing for outgoing shipments) and also to receive parcels.
At the residence itself, innovation is also afoot, focused on the consumer need for security and convenience. There are businesses developing carrier-agnostic secure parcel delivery receptacles, like ParcelHome in the UK, and the “Jeffrie” being tested in the US. And it doesn’t stop with single family home residences; multi-dwelling buildings are perfect for centralized and secure parcel delivery receptacles.
A recent survey of apartment renters (2016 MFE Concept Community Survey) asked 84,000 renters whether they would pay for access to a 24/7 package locker as a residence amenity, and “more than 30% of all renters are explicitly willing to pay extra to live in a community that offers package lockers.” Secure parcel locker solutions are growing as apartment and multi-residence building dwellers demand better secure parcel delivery solutions. Parcel Pending offers parcel locker solution where online orders are delivered to a parcel locker location, the recipient receives an email or text message alert when it arrives, with a code they use to open the parcel locker and retrieve their items. Businesses such as Package Concierge and Luxer One also offer secure parcel lockers that can be accessed by a variety of carriers, with property management and resident controls in place.
With the innovation focus largely addressing the unarguably more profitable urban residential delivery, what about those living in spread out rural locations? There are other countries, which also have geographically spread-out populations, that are looking at other ways to deliver parcels beyond the traditional means. In China, e-commerce retailers are testing drone delivery to remote areas, and the Fetchrapp uses a mobile phone’s GPS location as the delivery address for countries where the lack of a good address system is a challenge. But rural locations are definitely more challenging, and most of the solutions we are seeing focus on delivery to centralized locations where the rural population may work or shop.
We Want It… When?
Another key consumer desire when it comes to delivery is to control the when. Traditional models where a “notice” is left in lieu of a parcel because a customer is not home to receive the item are fast being replaced with services that allow the consumer to better control when the delivery is made. The big carriers all have put some level of consumer controls in place to help them schedule package delivery, and there are also new apps and services being developed just so consumers can dictate the when of delivery.
Businesses like Doorman offer consumers delivery windows that in some cases go beyond what traditional carriers may offer (e.g., delivery up until midnight). And of course delivery to innovative receptacles we’ve discussed (e.g., car trunk, parcel lockers, smart box at house) generally offer 24/7 access so the consumer can access the delivery when it is convenient for them.
We Want It… How?
While consumer desires for convenience and schedule flexibility are driving innovation around the where and when of delivery, business’ needs to control costs and provide consumers with low-cost delivery options are driving innovation around the how of delivery.
For the most part, consumers may be agnostic about who the carrier is and how they deliver the parcel, but they still have a set of needs that carriers must meet, which include reasonable cost, security, and convenience. Innovations are focusing on each of these aspects of parcel delivery, particularly ways to drive down costs. Lower cost is one of the key drivers behind forays into delivery by drone (Matternet, Flirtey, etc.), autonomous vehicles (like Starship Technologies, or some combination thereof (Workhorse combines electric vehicles and drone delivery). All of these solutions promise lower cost delivery in certain business models.
SwissPost, SingPost, Australia Post, and other posts actively have begun testing drone delivery of parcels. Amazon last year received FAA approval to start testing drone delivery of parcels in the US and just this month was granted a patent on a drone delivery docking station system.
Then there is also the “sharing economy” movement, bringing us new crowdsourced business “P2P” delivery models ranging from regional entrepreneurs too numerous to list, to business giants (Amazon with its Flex service, DHL’s aptly-named “MyWays” app, and others), to those in between, such as Deliv or Silicon-Valley upstart Postmates, which may be known for delivering Starbucks, McDonalds, Apple, and Walgreens purchases using its mobile app, but now is eyeing local retail delivery opportunities in the broader e-commerce market.
There are models that tap into driving travelers willing to make deliveries en route, such as PiggyBee, Hitch, RideShip, or Roadie. And the sharing economy model extends internationally as well, with businesses such as Shipizy, Jib.li, and Packmule— which differs in that users post items locally once they arrive in the destination country vs. a face-to-face delivery — and many others. Within individual countries there are many of these types of services, apps, and platforms cropping up.
These types of services are shaking up the traditional parcel delivery business model and making us look at delivery in a whole new way.
We Want Control!
The bottom line when it comes to keeping consumers happy is giving them control over the aspects of delivery that are important to them. And despite all the delivery choice features being added by the big three carriers (UPS, FedEx, and USPS), there are still gaps that open the door for entrepreneurs and innovators.
Here’s a case in point — my own recent experience in ordering a new HTC Vive Virtual Reality set for my husband’s “special decade” birthday. I live in a residential neighborhood just outside Washington, DC, and parcel delivery for us means leaving it on the doorstep, sometimes with a text alert or email noting delivery, sometimes with a knock on the door. It’s a relatively easy delivery environment on our end, except for times when “controls” are not available.
In this instance (I won’t name the carrier), I had a call telling me the scheduled delivery day, and noting that I could go on the website and take advantage of delivery choice features. Since this package required a signature and I would not be home on the scheduled delivery day, I immediately went to the website to see what I could do to have the delivery meet my needs. Although the carrier apparently offers a tighter window of delivery choices, “signing” online to avoid having to be there to sign for the item, and a host of other options — none of these were available to me for this item, for some unexplained reason.
So in this wonderful age of technology and innovation striving to meet consumer choice… I was left with no option but to hope I was home when the delivery arrived or deal with the consequences of having to collect my item or schedule re-delivery.
Consumers want to be able to control the when, where, and sometimes how of their delivery, and they like having options to do that. Not having the ability to control delivery leaves a gap in the marketplace… and there are entrepreneurs more than ready to step into gaps left by the big carriers.
Business NOT as Usual…
One thing is for sure: the future of delivery is “business NOT as usual,” so it will be key to keep a sharp eye on these developments and new business models. Luckily, that theme will be the centerpiece of PostalVision’s March 2017 event, to be held March 21-22, 2017, at the Ritz Carlton Pentagon City (just outside Washington, DC). Those who have attended previous PostalVision events know that it is a great place to discuss and learn about new business models and see innovations in the postal/parcel delivery sector.