Last mile delivery: what do consumers really want?
Study after study, the conclusions are always the same: consumers prefer being home delivered (see graphs 1 & 2). It is not new (see graph 3) and in some countries these figures are increasing. “[in 2019] 68% of shoppers in the UK, compared to 63% in 2018, opted for home delivery”*. In addition to that, one can assume that this preference would be higher if consumers would be certain they can receive their packages at home even if they are absent part of the day.
From there, it is quite strange to see carriers and postal operators invest a lot in access points and/or lockers (rolled out in public areas). Their answer is – and I heard that many times from a lot of them – it is about bringing convenience to consumers [that are not home during daytime]. Right, but my point is: if consumers want to receive their packages at home, offering convenience should mean allowing them, even when they are absent, to be home delivered! And not avoiding making home deliveries.
The reason for this misunderstanding is, in reality, simple to understand: carriers try, first, to solve their own problems and, then, they try to convince consumers that this “second best” solution can solve their own problem (not being at home). To shippers (e-merchants) they showcase a portfolio of solutions, consumers’ choice and alternative cheaper solutions.
Why do carriers and postal services love consolidation points (access points and lockers -also called PUDO-)? For carriers, B2C equals low margins and extra costs for every missed delivery attempt. To them, dropping off all packages at a single place would mean all of the packages can be delivered at once and that additional margins coming from productivity gains can be won.
In an ideal world it would work perfectly. In the real world, consumers will continue to select, at first, “home delivery”, encouraged by premium subscriptions and deliveries offered by some shippers. As a result, carriers should perform home deliveries, plus, the deliveries in consolidation points.
In dense urban areas with lots of buildings, such an organisation results in multiplying the stops and accumulating inefficiencies. Let’s consider, for example, a sample of consumers living in a building. Some will choose to be delivered at a consolidation point (because they anticipate not being home), the majority at home, including those who will not be there. In this example, the delivery person who stops at the building might succeed in delivering some of the packages (directly to the consignee or to a neighbor) and will then go back to the truck with some that could not be delivered (despite the time spent trying to get rid of them). Afterwards, the delivery person will go to an access point to drop off the packages of the consumers that have selected this type of delivery but also of those that were not present at the time of the delivery. Some of the last ones will dislike this process and will ask to be delivered home again. The carrier will have to make a new delivery but first to collect the packages dropped off at the consolidation point.
From there, it is clear that it would make more sense to drop off all those packages at the building. One stop would be sufficient to deliver all of the packages at the first attempt and to satisfy consumers. So one may wonder why carriers, instead of trying to avoid home deliveries, do not work to make them successful? In my opinion, in addition to being too focused on solving their own issues, carriers have not found a cost effective solution yet. However, the situation is changing. An increasing number of companies offers residential parcel boxes to drop off all packages at a single place in every building.
I am not saying that consolidation points are not “a” solution. It could be, for example, for non dense areas, rural regions, etc… I mean that it is not “the” solution, because the real solution should be the one that allows the consumer to be home delivered efficiently. Moreover, consumers’ preferences go beyond being home delivered. Indeed, even if such delivery infrastructure is not available yet, many consumers have already requested to receive their parcels in a mailbox/parcel box (see graph 1). And according to graph 4 consumers are also in demand for such convenient solution for returns (see graph. 4).
* KPMG Annual retail survey 2020
Related posts :
Parcel boxes: Is the Mailbox Going the Way of the Rotary Phone?
Parcel boxes: Is the Mailbox Going the Way of the Rotary Phone?
Graph 1. Where European consumers prefer their products to be delivered, Postnord 2019
E-commerce in Europe, Postnort, 2019
DPD, E-shoppers in Europe 2019
Graph 2. Where consumers (global) like their products to be delivered, Metapack 2018
Metapack, State of ecommerce delivery 2018 (Europe, US and Canada).
Graph 3. Where European consumers prefer their products to be delivered, UPS, 2015
UPS pulse of online Shoppers 2015.
Graph 4. How European consumers want their returns to be processed, Pitney Bowes , 2019
