Australia to see a significant increase in out-of-home deliveries
The growth of e-commerce is fast changing Australia’s traditional retail landscape – for instance, online retail sales in Australia have grown by 14 % annually over the past three years.
Speaking at the Hubbed ‘Future of PUDO Conference’ in Sydney last week, Marek Rozycki, Managing Partner at Last Mile Experts, a consultancy group based in Europe focusing on all aspects of e-commerce and last-mile logistics, and former Vice President of Amazon Logistics Europe forecasted that out-of-home deliveries will solve important logistical problems for retailers, carriers, and consumers alike.
As a result, out-of-home deliveries will very soon make up a significant component of the last-mile market. Hubbed is a Australian parcel collection point network of more than 2000 retail locations used by Australia’s major carriers.
In his presentation, Marek explained that the cost of the last-mile accounts for approximately 41 % of supply chain costs. With many consumers already feeling that home delivery methods are outdated, parcel collection point networks such as Hubbed are growing because they guarantee successful first-time deliveries and increase delivery density to collection points – both reducing costs for carriers.
Marek said: “Out-of-home delivery is becoming crucial for the delivery sector because it offers a virtually guaranteed first-time delivery solution. It is also increasingly important to the overall consumer experience because is it currently the only way to manage massive volume growth without excessive service failures and costs.”
Marek outlined how the increasing failure by legacy players to address problems with the last mile has led newcomers to disrupt the market, both domestically and internationally. He anticipates the three areas of out-of-home deliveries that will grow in Australia will be lockers, collection point networks, and click and collect services.
With regards to lockers, some experts are already pointing to the IT and physical security issues – such as power outages, and their vulnerability to hackings, intrusion, vandalism and robbery. Some overseas industries are already addressing physical security issues with innovative technologies such as video cameras, movement and vibration sensors.
Collection point networks, with their proximity to consumers, familiarity and simplicity of use, will see significant growth. For example, Hubbed, after launching in Australia in 2014, has grown to 2000 locations around the country within five years, has recently launched in NZ and is set to launch in several Asian markets this year. Marek says that a significant part of Hubbed’s success is its carrier agnostic approach and easy-to-use network processes, systems and tools for consumers and retail operators.
Marek believes in-store click and collect offerings also have plenty of space to grow, especially as consumers become increasingly environmentally driven in their choices and embrace greater control and convenience. By giving customers what they want, e-tailers can also build loyalty and drive income. In fact, the research shows that almost two-thirds of customers spend more when they use click and collect.
David McLean, Founder and CEO of Hubbed, commented: “The customer expects higher levels of service and choice when it comes to e-commerce. They are demanding more control post the purchase experience and this obviously includes delivery and collection. This, coupled with the demand for more environmentally friendly options, means that sustainable shopping now extends to sustainable shipping. Pick-up drop-off (PUDO) and collection points, such as Hubbed, which has more than 2000 locations nationally, support this process from the get-go.”