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Snow, and the art of the possible
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Don't let me down
 The rising role of delivery solutions Whether it's drop-off points (there are now thousands of them) or box systems (increasingly smart), a new spirit of confidence is spreading through the world of unattended delivery solutions, says Peter Rowlands in our extended annual review 'How do you cater for customers who may not be able to be at home to receive the delivery?' That precise wording makes up question number six (of sixteen) that retailers must answer satisfactorily if they want to be accredited to the new IDIS Gold standard for home delivery performance (covered extensively elsewhere in this issue of F&E). 
Buried among the other fifteen questions in this fascinating scheme, this one looks relatively innocuous; yet in some ways it hits on the fundamental flaw of most home shopping fulfilment: the risk that consumers won't actually be at home to receive the goods, and possibly won't get them without some significant cost and inconvenience – both to themselves and to the carrier and provider. We don't know yet how well the IDIS Gold Standard will be received by the e-retail world, but the backing of IMRG (the e-retailers' association) seems to guarantee that it will gain at least some traction, and it could become a recognised benchmark for the industry. If it does, that will turn the spotlight squarely on the problems caused by delivery failures, exposing the issues that too many retailers have tried to evade in the past. And if this does happen, inevitably it will focus attention as never before on the various ways in which retailers can combat the delivery problem. Perhaps the greatest challenge in this context is how to tackle failed home deliveries before they happen. Arguably, if the delivery driver is waiting at the doorstep and no one materialises to accept the parcel, it's too late. So what can you do to prevent this happening? Historically, there have been basically two approaches. Consumers can ask the carrier to leave the consignment in a secure box fixed outside their house, or they can ask for the goods to be delivered somewhere else altogether. That second option has many sub-types, of course. The alternative could be a drop-off point at a convenience store, or a bank of locker boxes in a public place, or just a neighbour's house. Or the consumer could ask to collect the goods at the retailer's nearest physical shop. Indeed, 'collect at store' seems to be gaining ground rapidly at the moment, driven by avid supporters such as Argos and Halfords. Argos is reported to have found that 17 per cent of its business is now generated in this way. Whether this option really meets the majority of home shoppers' aspirations is of course debatable, but it certainly creates a new, hybrid form of distance shopping. When it comes to the 'classic' solutions – drop boxes and alternative delivery locations – the news is that both markets are alive and well: in fact they're possibly in better shape than at any time in the past decade.  To take arguably the most impressive recent development, Collect+ (the Home Delivery Network/PayPoint joint venture) now claims to have more than 3,500 delivery locations set up at PayPoint outlets. The company has been able to build up its network quickly through the market presence and financial muscle of its backers. Many developers have aspired to create national drop-off networks in the past, but few have ever achieved this kind of coverage so quickly. Currently the only retailers listed as using Collect+ for outgoing shipments are those in the related Shop Direct group, though we're told that third-party retailers are expected to join them soon. Significantly, it can also handle returns, which are in fact easier to set up, since no integration with the retail process is required. A number of third-party retailers are already said to be using this facility. What Collect+ also offers – and this is a key theme in the market at the moment – is despatch. Users such as eBay power sellers are seen as key targets for this service. Currently deliveries are only provided on a store-to-store basis, but a store-to-home option is expected to be added soon. However, Collect+ is not alone in its market space. Probably its nearest competitor in terms of network coverage is a service formerly known as ParcelPark, which claims to have more than 200 location signed up. Whilst a long way behind Collect+ in coverage, this is a substantial network in absolute terms, and an indicator of the head of steam behind this system.  Parcel PickUp, a newer contender, acquired ParcelPark last year, and will be rebranding the service to its own name over the next few months. Ed Fraser, the man behind it, has some interesting plans up his sleeve, including the idea of profiling individual agents on its web site. This is something we've never encountered previously, and could prove useful in providing added incentive to prospective agents, while simultaneously underpinning their credentials for prospective users. Fraser describes it as 'focusing on enthusing the agents'. A further drop-off network is just getting off the ground – Retriever Logistics. Starting from a modest base in the Yorkshire area, this venture has been running a pilot operation for some months, basing its pickup points at Brantano shoe shops in Hull, Stockton and Sheffield. Whilst Retriever's coverage is limited so far, Joanne Hunter, the head of marketing, says a large-scale pilot with up to 200 locations is due to start in the summer. She is unperturbed by the rapid expansion of the rival Collect+ network. 'There's an advantage in having more than one network,' she says, and points out that Retriever's system will be carrier-neutral, whereas Collect+ is linked to Home Delivery Network. At least one other drop-off contender is waiting in the wings. Kiala, a major contender in France and several other continental countries, ran UK trials with returns handling in Britain's North West a couple of years ago, and we are told it still has ambitions here. Discussions with potential UK partners are said to be at an advanced stage, though there is nothing concrete to report on yet. Kiala's business model includes links with carriers for handling consolidation and collection/delivery operations – an approach that puts it closer in concept to Collect+ than Parcel PickUp or Retriever. This makes the operation more complex to set up, but could also imply greater investment and marketing muscle as and when it materialises. Price has yet to be tested Not all recent drop-off initiatives have survived. MyParcel, which used self-storage locations as drop-off points, has been discontinued since last year by entrepreneur Hugo Rose, who told F&E: 'We were thwarted by the challenge in finding a suitable network – sufficiently skilled but sufficiently inexpensive.' He says this remains the chief obstacle to success in this field for entrepreneurs. He adds: 'I remain convinced that demand for the service exists, but the price the customer, end user or retailer is prepared to pay has yet to be fully tested.' There is of course another contender in this market in the form of Royal Mail's Post Office drop-off network, which dwarfs all rivals in sheer network size. Its Local Collect service can be used either as an option when a delivery fails, or more recently also as a first choice for customers. It can't necessarily offer the late opening hours of convenience stores, but it does have the benefits of its broad coverage and consumer acceptance. Local Collect itself is available only to Royal Mail and Parcelforce customers, which does limit it slightly. However, for the past couple of years third-party carriers have been entitled to use post offices as drop-off points – a right granted under 'downstream access' legislation. It sounds appealing, but any thoughts that this new freedom would see enthusiastic take-up have not materialised so far – possibly because the deal is expensive for carriers to set up. DX was an early user, but has not so far been followed by others. Determined to use box banks  Alongside drop-off points, a related solution is box banks, which in the consumer market means ByBox. Having built up an extensive network of intelligent locker boxes for delivering equipment to field engineers and the like, ByBox is still determined to harness them for the consumer market. The big news a year ago year was that the company was going to install locker banks on public phone box sites and at railway stations – ideal for consumers picking up shopping on their way home. ByBox founder Stuart Miller says this is still its strategy, but security and planning issues have meant progress has been slower than hoped. Installation in railway stations has started. The box bank at Victoria station has been in place for over a year, and Miller says boxes at other mainline stations will be appearing in the coming months. Arguably the one at Victoria needs more prominent branding, but an equal issue is general lack of public awareness that the ByBox solution is out there. Miller recognises this, and in fact says the company has now changed its strategy. 'Originally we thought our target customers were the carriers,' he says, 'but nobody has made a success of tying in this kind of solution with carriers anywhere in the world.' Later the focus shifted to the retailers as prime customers, but Miller says they were deterred by lack of network coverage. 'They always tell us that when the market reaches critical mass they will come on board with us, but it's a chicken-and-egg situation.' So ByBox finally embraced the idea that it had to sell to consumers. 'The realisation was simultaneously liberating and terrifying,' Miller says. Nevertheless, it has already made strides into the consumer market by setting up its MyByBox registration system, under which consumers can name the ByBox hub as their delivery point for home shopping and have the goods sent from there to the box bank of their choice. Whilst maintaining this consumer focus, ByBox has now gone a stage further, reverting to a retailer focus, but in a highly novel way. In a nutshell, as outlined in a separate news item in this issue, the company is offering to form exclusive relationships with selected retailers in specific market sectors, providing them with unlimited free use of its system. 'It will become a USP for those retailers,' Miller hopes, 'and rivals will eventually realise they need to offer the same service for the normal fee.' It's a bold move – but one that ByBox should be able to handle on the margin. It could just be the catalyst that the market needs. If ByBox does succeed, it may not be alone. DX continues to foster consumer market ambitions for its very similar ParcelXchange box bank network. Contrary to press reports in recent months, the company tells us it has not advanced its proposition significantly since we asked about it a year ago, but confirms that a consumer service is still part of its strategic plan. In the course of ByBox's ongoing market analysis, something rather fundamental emerged. 'You don't have to be mesmerised by the desire to have a comprehensive national consumer network,' Stuart Miller says. 'The trick is to work out how to make a single site profitable.' Ed Fraser of Bristol-based Parcel PickUp takes a similar view. 'It takes time to recruit agents and train them in the system,' he says, 'so we're not going for national awareness yet.' Because the company is targeting consumers initially, he says coverage is not an issue. It can focus its energies in areas where it is well represented – which it is doing with email and other marketing campaigns. Retailer integration For many would-be suppliers in the unattended delivery market, a long-cherished ambition has been to see their service listed as a delivery option on consumer web sites. But given the swing among suppliers to a consumer perspective, has integration at web site level ceased to be a key plank in the platform of unattended delivery solution providers? By no means. ByBox is looking for retail integration as part of its free offer concept, while Parcel PickUp is developing an API (application programming interface) that will enable retailers to plant links to its service in their web stores relatively easily. And Retriever Logistics is another contender that has developed its own integration software. What is less clear is how willing retailers will be to pursue the integration route. Stuart Miller now admits it is a hard sell, though Joanne Hunter of Retriever Logistics takes an upbeat view. 'Retailers are interested in integrating with alternative delivery solutions,' she says. 'Nothing worth having is easy, but this seems to be an avenue worth pursuing.' Incidentally, MyParcel went to considerable lengths to develop an integration system of its own, and Hugo Rose says that having suspended the service, he is now willing to offer the software for sale, with or without the intellectual property in the business as a whole. Box systems  Purists in the home shopping market continue to argue that only delivery to the shopper's home meets the full expectations of customers. This is where delivery boxes come into their own, and several familiar favourites remain available, including the Parcel Safe and the more substantial Hippo Box, alongside newcomers such as Parcel Pod, which takes up the legacy of the discontinued Parcel Eater, allowing multiple deliveries in one day. However, Charles Gallichan, the man behind the Hippo Box, feels there is still some way to go before the box concept gains general acceptance. 'Marketing the concept is still very much an uphill battle,' he says. 'Retailers generally haven't recognised its value, partly because the people in marketing don't really understand the scale of delivery problems.' He also confirms what ByBox's Stuart Miller says about parcels companies. 'It's remarkable how little interest couriers have shown in box systems,' he says. 'The consumer is the driver in this market. As people buy more online, delivery boxes becomes easier to justify.'  Among box systems, another new kid on the block, again covered in our News Update section, is ParcelPal, which has developed a very clever hybrid communications/box system. The delivery driver presses what looks like an entry phone button at the householder's front door, but in reality this initiates a phone call (via the door unit) to the recipient, who could be elsewhere. If the recipient is happy to accept the delivery, he or she presses a key combination on their phone, which unlocks a secure box mounted next to the front door to enable the driver to make the delivery. The proposition has changed in some respects since it was announced last year. The product is available only on lease rather than as a straight purchase (director Steve Bungard says the purchase cost would be too high), and it uses an integral mobile phone SIM card for communications, rather than linking up to the householder's land line as planned. 'Regulatory constraints have ruled out a land line connection for the time being,' Bungard told us, 'but in any case the SIM card approach is more flexible.' He has struck a deal with a mobile network provider in which ParcelPal is paid most of the SIM contract rental fee, while the network retains the call charges. At around £6 a week it's not cheap, but it is very clever, and some regular home shoppers will no doubt be happy to pay for the novelty and convenience. Meanwhile, ParcelPal is also cultivating use of the system for parcel collections – ideal for regular eBay sellers who still have a day job and can't always be at home to despatch their consignments. He has already signed up one carrier, Sussex Couriers, to use the system in this way, and says he is in talks with others, including a national parcels network.  Another box system offering a lot of promise is the 24-7box, which includes a very clever electronic quasi-POD system and a transparent inner lid. The idea is that the recipient can inspect a delivery without actually taking possession of the item, and leave it in situ in the event of dispute, pending resolution. Arguably the great strength of this system is the way it addresses the problem of capturing PODs from consignees in their absence. In some ways the technology and the intellectual property seem as appealing as the system as a whole, and we suspect that it could have significant message for the market about the way PODs are and should be dealt with. Lack of active promotion Standing back from specific systems, what still seems to be missing in the market is active promotion of delivery solutions to consumers, either by retailers or by carriers. Here at F&E we are eternally baffled as to why more e-retailers don't advertise box systems or other solutions on their web sites, and why more carriers don't mention the idea in their delivery documentation. Whilst these companies might feel this would be giving free advertising to the suppliers, arguably they would be missing the point. In practice, they would be offering recipients a way to avoid future failed deliveries – and saving themselves untold potential cost and hassle almost every time someone adopted the solutions they described. If this became common practice, delivery solutions could become a fact of e-commerce life almost overnight, changing the eÐfulfilment landscape once and for all. When will it happen? Timed deliveries and texting: can they solve the delivery problem? Retailers using DPD or Interlink Express (both GeoPost subsidiaries) to deliver their goods can have an email or text message sent to the recipient on the morning of the delivery, telling them within an hour when to expect their goods.  It's a radical first for the market – and all the more remarkable, given that it has become part of the company's standard delivery offer, with no premium charge. It's no wonder, perhaps, that more than 1,900 customers are said to have opted for it already. Virtually all the group's UK home delivery customers are expected to introduce it within 18 months. So is this the ultimate cure for delivery failures? DPD chief executive Dwain McDonald avoids making that claim, but does see it as a major stride forward. Users seem to agree; for instance, Sony found that its failed missed-call rate fell from one in 38 to 1 in 52 after introducing it. How did DPD do it? 'It was the most complicated project we have ever undertaken,' McDonald says. It apparently relies on a combination of clever route-planning and details such as profiling each individual driver's performance levels. Allied with the time prediction is the ability to text the details to the consumer – though McDonald accepts that only about 25 per cent of consumers are currently willing to providing a mobile phone number for this purpose. That means email addresses – reportedly less difficult to obtain – remains the primary target for communication. Either way, the consumer is not only told when to expect the goods, but also permitted to switch the delivery up to three days ahead without penalty. DPD is not the only company to offer text and email alerts, of course. Others have done so for some years, one of the latest being Skillweb, which has integrated texting into its delivery solution set. If not a complete solution, altering certainly looks an increasingly useful piece in the jigsaw puzzle of delivery success.
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