Newsletter 37

An imaginative new last-mile delivery solution called Parcel Country is being developed by two former John Lewis executives, Robert McCarthy (former managing director of John Lewis Direct) and John Walker (former head of John Lewis strategy).

Their idea is to promote the development of "community recipients", who will take in parcels destined for people within their immediate locale, and will hold them for collection at a time that suits the customer. They might be small businesses such as convenience stores, but equally could be private individuals. The aim is to appoint a thousand by launch time this autumn, and up to 30,000 within five years.

These recipients will be able to sign up online to offer the service, and will be accepted subject to checks on their address and credentials. Users will pay online; a fee of under £2 has been mentioned, of which "most" will go to the recipients, the company says. A modest handling charge will be retained by the company itself.

Parcel Country will insure consignments to avert fears of fraud, and the company's web site will include a consumer rating system to give other would-be users a sense of each recipient's reliability and performance.

 

According to John Walker: "We're turning the established last-mile solution on its head. Instead of saying 'You can have a drop-off point within three miles of your home' or whatever, we're saying you can have as many as you want. The market decides."

The kind of private individuals who would make suitable recipients might be home workers, people staying at home to look after children, or retired people. "They could be people you've bumped into in the street." There is in fact no reason why shoppers should know the recipients personally prior to using them, though Walker does see an element of social networking emerging in the system. "It's partly about people connecting with each other," he told F&E.

The initial recipients are likely to include a high proportion of small businesses, since they will be easier to identify and sign up than individuals; but Walker says he is hoping word of mouth will help to promote the system to individuals later, and will encourage new recipients to put themselves forward. He sees this as a "virtuous cycle". There will in addition be a degree of promotional "pump priming" to kick-start the project.

Recipients can choose their own hours and days of operation, which will be listed on the Parcel Country web site to help consumers chose the best option for them. Recipients are required to check a box on the site when goods arrive, triggering an automatic email alert to the recipient.

Underlying the concept is research indicating that shoppers are resistant to making long journeys to collect home shopping, and unwilling to pay much (if anything) for having goods left at an alternative delivery location.

"It was clear to us that people won't travel far to pick up goods, and don't want to pay," Walker says. "There's a tension between convenience and time, and we needed to find a solution that offered the optimum balance between the two."

In the first phase there will be no integration with retailers, simplifying and speeding up the roll-out. "At some point in the future we'll look at retail integration," Walker told F&E, "but that's what has dragged down many previous attempts to develop viable delivery solutions. We wanted to set something up in a very tight time frame, and you simply couldn't do that if you made integration a pre-requisite."

The initial system will therefore operate on what he calls "the shopper-managed approach", which means users will pay online by credit card on the Parcel Country site. "We realise it's an extra transaction, but we will keep it extremely simple and basic," Walker says.

If the system gathers momentum, retailers will be encouraged to integrate the system in their own web sites, and users will then be able to select their drop-off location and pay during the checkout process.

Parallels with some aspects of the eBay network inevitably spring to mind, though Walker and McCarthy are keen to avoid drawing any direct analogy. However, they do admit that while the modest payment rates would be unlikely to offer anyone a living in their own right, becoming a recipient could provide a core income that some people could extend by offering other services.

Already their plan includes provision for recipients to make deliveries in their own cars, rather like the lifestyle couriers employed by some delivery networks. "For instance, they might hold a few parcels for shoppers and deliver them on a Saturday morning," McCarthy says. There will be a formal price structure for this – provisionally set at under £3.

F&E asked John Walker if he saw initiatives such as ByBox's phone-box drop-point scheme as a serious challenge to the Parcel Country system. "Not really," he said. "They're offering more of a premium service, and addressing a different market from us. We think there's plenty of scope for both types of solution."

If Parcel Country really does create a network of 30,000 recipients by 2013, Walker says this will mean there's a recipient within five minutes of 95 per cent of the UK population. That really would be a high-density system.