Pass the parcel to partners

Rory O’Connor the founder and CEO of Scurri urges postal operators to work with partners to service their burgeoning SME ecommerce customer segment as costs, complexity and service expectations continue to rise.

“National postal operators have been the targets of advice on innovation for more than 20 years, pretty much ever since the writing was on the wall for traditional postal deliveries and since the Internet began to have an impact on retail after its virtual collapse in the early 2000s.

20 years on and it is clear that much of this advice has been both expensive and difficult to implement. Some of it has been plain wrong while some of it has added to the complexity of running a postal operation, where the original intention had been to simplify.

Operators have innovated at very different rates, to the point now where no single piece of advice can possibly apply to all the players, which can make the business of continuous innovation hard to manage. Furthermore, the competition has reached a level of sophistication in its service offerings that the postal operators have had to think again about where they can compete, with sufficient scale to make a decent profit.

What we can say on a positive note is that most have a customer base of SME ecommerce companies who use them for delivery and who will remain loyal as long as the services provided are better than what is available elsewhere. Working with postal operators managing their delivery proposition can help SME ecommerce companies operate effectively in the highly competitive online space. This may seem like stating the obvious, but the SME ecommerce service must be distinctive and work in its own right rather than simply because the postal operator thinks that it is immune to competition because of the other services it provides.

A key part of their digital transformation must therefore be dedicated to serving the ecommerce industry which are relying on postal services to deliver parcels from retailer to consumer but also facilitating international deliveries for final mile.

And now the pressure is on to create services that are superior to what may have been envisaged five or more years ago, specifically the need to match up to companies’ higher expectations on delivery, but also with full sustainability in terms of carbon footprint of vehicles as well as keeping returns volumes low.

It is reasonable of course to ask, why can’t postal operators build their own end-to-end SME ecommerce capability in house, but there is a lot against them, namely that whatever they build is unlikely to be scalable and comes with high maintenance requirements. And in addition, the in-house resources required are usually not available as it is a complex and specialised skill set and the cost of acquiring and managing them simply too great.

The partnership route is the best choice because there are now companies dedicated to this service, operating in a competitive market that keeps prices keen and the service offer broad; for instance, options can be provided at the checkout that suit the needs of each type of customer. These companies have built the software with powerful logic engines that are able to reduce the complexity of delivery management by managing cost and friction. Typically, a partner will be looking to cut delivery costs by as much as 10%. And through the use of dedicated software, postal operators can expect to cut shipment creation times by as much as 50%.

For international deliveries, the partner will have access to the broadest possible carrier network which makes switching carrier easy to ensure service levels always remain high. At the same time, the postal operator retains its brand on all elements of the service all the way through.

Partners can also provide the data needed to monitor progress and agree on areas where improvements are needed. Data reports on volume by carrier, what services and options customers choose, growth markets and individual carrier performance.

Crucially, postal operators using this outsourced model retain full control of the customer relationship whereas if they work with a single 3PL, all of that control is lost.

Partners also have as standard advanced tracking services that help to boost loyalty and reduce WISMO queries using customisable, own-branded tracking emails.  Order anxiety can be reduced by providing estimated delivery date. Meanwhile, this is all building to gain post-purchase insights needed to make further improvement.

Industry trends continue to suggest that ecommerce parcels will remain the top priority for postal operators and the investment in delivery services continues to be justified because this is where they will see the greatest growth. Investment with a partner is also justified due to the fact that end customers have such expectations, and it is partners that have the unique advantage of being able to offer all the related services as part of a single solution – carrier flexibility, options at the checkout, track and trace, returns mitigation, and data insights.”