November 14, 2019
What is PUDO and what does it mean for retailers, shoppers and carriers?
What is PUDO?
PUDO, or pick-up and drop-off, refers to any kind of designated area for consumers to receive and leave parcels, typically picking up ecommerce orders and dropping off returns. Broadly, PUDO locations are either staffed counters opened in existing businesses, or unstaffed lockers which can be located anywhere.
How does PUDO work?
A postal carrier or logistics firm delivers in bulk to a PUDO location and the parcels are stored. Each shopper is notified when their item is available to collect. When they arrive at the location, they may use a code to open a locker, or ask a store employee for their parcel, depending on the nature of the PUDO location.
If a customer needs to return something, they book the return using the retailer or carrier’s digital interface, which generates a code for them to enter in the locker interface, opening a locker door for them to leave their parcel, which is then collected with others. For staffed PUDO locations, customers may not need to prebook their return, as a return label can be scanned by store employees at the counter.
Where are they located?
Self-service PUDO lockers can be anywhere – from supermarket car parks to gym receptions. The key is to make them easily accessible by a large number of people. For this reason, PUDO is popular in urban centres. This is also exacerbated by the increased proportion of people in cities who are not at home during the day to receive deliveries at home.
Major examples of PUDO networks in the UK include Collect+, which has several thousand locations dispersed primarily in convenience stores, Asda’s ToYou service and Doddle, which offers pickup and drop off counters in Morrisons throughout the country.
What are the benefits of PUDO?
Pickup and dropoff locations offer benefits to the shoppers who use them, the carriers who set them up and the businesses they are located within.
For the consumer, PUDO networks offer a local, convenient and secure way to collect a delivery without needing to wait at home. The added security is particularly significant around the holiday season, when purchases are more likely to be gifts and have an extra emotional importance to consumers. At Doddle we see our collection volumes increase disproportionately to the number of orders – indicating that shoppers are more likely to use click and collect or PUDO options when they’re buying important items.
Shoppers also benefit from being able to work their collection or return into their daily schedule, such as while they’re doing a weekly shop or during their commute.
The businesses which host PUDO counters or lockers benefit from the increase in footfall from shoppers coming to collect and return their parcels. Many of these shoppers go on to make purchases within the store, with 70% reporting that they do so regularly. Adding more functionality to the store estate is an important goal for retailers at a time when the High Street is under pressure and they face stiff competition to attract customers. Typically these hosts do not need to pay any fee or license, and so the cost of the extra footfall can be as little as the cost of the square footage for a locker or the employee time spent scanning a parcel.
Carriers and postal services that set up PUDO locations typically do so because they want to capture additional volume from retailers, offer more convenient services to shoppers, reduce costs by consolidation and become more sustainable.
Home delivery is very inefficient compared to delivering to a PUDO location. The deliverability is better to PUDOs as they are more reliably open and available, and hundreds of packages can be delivered at once. By contrast, home deliveries require much more journey time and each package needs to be delivered to a different place. This adds costs through fuel and additional driver time, as well as leading to increased congestion, noise pollution, air pollution and greenhouse gas emissions.
Thanks to all the benefits to consumers and retailers we talked through above, having an extensive PUDO network makes a carrier a much more attractive option in negotiations with its retailer customers, who want to be able to deliver great customer experience and convenience, without sacrificing on sustainability or price. PUDO allows carriers to meet those lofty goals.