Why communications are so vital to the ecommerce returns experience

This article is an excerpt from our guide for ecommerce retailers: eCommerce Returns 101. The guide goes through every stage of the return process from policy to process, as well as how to communicate with customers about their returns, and how to make returns work for you. Download your copy for free here.

To maximise the value of offering returns as an ecommerce retailer, you need to build them into your overall customer lifecycle. One of the most important tools to do just that is returns communications. Consumers engage with returns in a very similar way to deliveries – they want to be updated and informed about the status of their purchase or return, to know when it will arrive/when they will receive a refund, and will actively check this information at a much higher rate than most of your other communications with them.

All of that means that you need to be offering your customers all of the information they want about their returns through your communications channels. It’s not just updates though. Proactive communications can help to recover customers who might otherwise not come back and fix issues that you otherwise might never see. Let’s go through the customer lifecycle and look at the role returns communications can play.

Checking in post-purchase

After a customer completes an order and the delivery is done, are you sending any follow-up communications to check in on their order, their satisfaction and any feedback they have? If not, this can be a really powerful way to get instant feedback and insight into the post-purchase experience, which is crucial because these are the moments where customers decide whether they will be shopping with you again in future.

A simple branded email communication after the purchase has been delivered can ask them for reviews and general feedback, and remind them that you offer exchanges and returns. That might sound like you’re risking a higher return rate., but think of it this way: would you rather a customer was upset with something they bought from you, and that was their main association with your brand, or would you rather that you nudged them to exchange that item, so that they were converted back into a satisfied customer? Sure, you created an extra return – but always think about what that extra return buys you. In some cases, it’s going to be the difference between a customer being a high value, loyal shopper or a stranger who shops with you once, then never again.

Of course, this email isn’t just useful for returns. It also provides you with great insight straight from from your customer about what’s working and what isn’t.

Staying in touch during the return

Once a customer has initiated a return, providing them with clear communications of status updates and tracking data for their return is crucial. Think about how many of your customer service contacts relate to the status of returns and refunds – how many of those could you cut out completely with an automated email?

The challenge for retailers here is that unless you have a digital returns process, you can’t know when a return is happening until it’s arrived at your sorting center. Even here, though, it’s best practice to communicate to your customer that their return is with you now, and give them an estimated date for their refund to be released.

Number one priority: the money

 Unsurprisingly, this is really at the root of most returns-related customer service contacts, and at the root of the customer experience around a return. Making it easy and comprehensible for a customer to get their money back is one of two underlying goals of a good returns process. (The other is getting the returned item processed as effectively as possible.)

So, as with the notifications as a return passes through different key stages, refunds are no different – except perhaps that you need to go above and beyond. When the customer books their return, they should have an idea of when they will be refunded, and at every stage of the process they should be kept up-to-date with any changes to that estimated date.

Closing the loop

Staying on top of your game is important, and doing that means you need to ask for feedback. If you’re using a digital returns platform, you can easily track the impact of making a return on customer loyalty and spend – but even when you’re doing that, you should also be soliciting direct feedback about the return experience. A simple star rating embedded in your returns journey or a quick link in an email to a review form is a great way to capture customer feedback and channel it towards making your returns process as good as it can possibly be.

Once your customer comms are perfectly linked up to your return journey and customers are getting a consistent and convenient experience, it’s time to figure out one of the biggest questions of all. How can we reduce returns without hurting the customer experience?

Download the full copy of eCommerce Returns 101 here.

How to process ecommerce returns

This article is an excerpt from our guide for ecommerce retailers: eCommerce Returns 101. The guide goes through every stage of the return process from policy to process, as well as covering customer experience and return rate reduction. Download your copy for free here.

Processing returns can be a complicated and costly operation, and the challenges of capturing data and efficiently getting items back on sale or into the right waste process are numerous. To get returns processing right, retailers need to map out a clear and positive direction of travel for the customer that is also fast and cost efficient to process.

Digital or physical?

Customers are largely familiar with the use of digital labels like QR codes or barcodes. That means you can reasonably expect them to be able to use those tools in a digital returns process – or leave them to just slap a label onto their parcel. By giving customers the digital option, you’re getting data that tells you why the return is being made in a little bit more detail. In turn, that means you can process it accordingly – why pay express rates to receive a faulty item, for example?

It means you also know exactly when to expect the item back and how quickly it can be ready for re-sale. On the customers’ side, booking their return with a digital platform means they have a clear understanding of when they’ll receive their refund and it allows your customer communications to truly tie into their habits. Every digital interaction you have with your customers adds another new detail to their marketing profile – even returns. Perhaps especially returns!

Keeping returns under lock and key?

Some believe that having to contact customer support for a returns authorisation is an effective way to limit return rates, but we would beg to differ. Our research revealed that 36% of customers specifically identified this as a frustration that would lead them to reconsider purchasing from the brand in future. Can you afford to lose that much business?

By setting out the steps in a digital journey, retailers can avoid the need for customers to call customer support for authorisation as well as keep their returns policy in their control. Out-of-policy items won’t even be selectable to return – no customer support contact and authorisation denial required.  Further down the line, the customer won’t need to make more calls to find out the status of refunds – the information is clearly surfaced in the digital returns portal. One thing is certain – the customer support team will absolutely thank you, as they can then get down to the important business of looking after customers, answering their queries and making sales – all the good stuff. Instead, returns will enter into a really efficient automated process based on what you’ve already set out in your returns policy.

Maybe you’ve gone for the Amazon approach and decided that customers can have free return shipping for faulty or late arriving goods only. You may not like the idea of footing the cost of customers changing their mind, or because the item is unsuitable. Like we’ve said before, as long as you’re clear at every stage and the numbers stack up, the decision is ultimately yours.

“Every digital interaction you have with your customers adds another new detail to their marketing profile – even returns.”

The long and winding road (to returns)

Let’s talk about shipping, where unexpected detours and bumps in the road can happen. And if there are a few of you deciding together how this is going to work for your ecommerce business, you may disagree. But never fear, we are here to give you the pros and cons of all the ways and means that your customers might get a return back to you. Ready?

Step 1: Preparing a return

ApproachProCon
“Here’s our address… good luck!”You don’t have to do anything. Just agree it’s ok to send the return and the customer does the rest.The customer won’t be happy to pay return shipping for late/faulty goods, and you might end up with returns sent without authorisation.
Pre-paid label provided in the packagingThe process is entirely in the hands of the customer with zero effort on your part. If the return is chargeable, you just deduct it from the refund.When the process is entirely in the hands of the customer, you don’t know if the goods are coming back or not. Plus, you’re paying the cost of printing labels for every sale, whether it’s returned or not.
Online booking with a labelThe return is authorised online, so you have visibility of what’s coming back and why. You can ‘habit gather’ to understand your customer better and automate the shipping label to match the reason for return.The customer may not have the facilities to print and this extra hassle can discourage them from shopping with you again. You will likely need to spend some time sorting out your digital process and tailoring it to your needs.
Online booking with a codeAll the benefits of above – speed, visibility, the ability to data capture, but without the need to print a label the customer experience is improved and you’re likely to get the goods back faster.Again, you may need to make an initial investment of time to take your returns digital. 

You can see that as we go down the list, the customer does less, but you, the retailer, get more. Now let’s take a look at what the customer does once they’ve got the package re-wrapped and ready to go.

Step 2: Handing it over

 ProCon
Mail itPost offices are abundant so it’s pretty straightforward for a customer to take it there.Unless you pay extra for tracking, once the item is with the postal service, everything goes dark until it arrives at your warehouse.
Arrange a collection  This is just so incredibly convenient for the customer. Especially for heavy or unwieldy items. Expensive/luxury items also benefit from this level of attention and the peace of mind it brings.This is likely to cost you more – unless you’re passing the cost on to the customer, which may upset them.
Use a drop-off point (locker bank, parcel shop or convenience store)This is a great option for round-the-clock convenience that fits in with customer’s lives. It’s also a really ‘green’ way of operating returns, as many parcels are collected and shipped simultaneously.Drop-off just isn’t a viable option for large/bulky/heavy items. Reliant upon the availability of local drop-off points.
Return in-storeIf you have outlets, this is the dream – customers can potentially make exchanges and often browse to buy more when they come to make a return. Returns are dealt with exclusively by you and there are no nasty surprises.Not an option for purely online retailers. Staff require training and systems must be put in place to process returns.

In a nutshell, it’s easy to overlook the hidden of costs of leaving returns in the hands of the customer. Prepaid labels seem like the simplest solution, but over the long-term they stack up to be surprisingly costly. The key takeaway here is that customers want to make returns without hassle, so it’s important to offer them both simplicity and plenty of options. Focusing on a customer journey that is essentially a minute or two to generate a return code, followed by multiple options for locations to drop off their item (or arranging collection for large or luxury items) offers you:

  • Control over and visibility of your shipping costs
  • A big long-term saving in printing costs
  • Swifter returns, which means faster resale
  • Repeat business from happy and loyal customers
  • A great reputation because you’re easy to shop with

“When your customer books a digital return, you might discover some difficult but helpful truths about your website that may reduce your overall returns rate.”

Welcome to the warehouse

This bit is kind of dependent on how big your operation is, but we’re going to assume that you will be working with a sizeable warehouse that ships your products and receives returns. As time goes on, you may need to scale this up and have your returns ship to an entirely different and dedicated location. However, the principles are largely the same, even if the square metres aren’t.

Segmentation

When goods come back to the warehouse, they need to be immediately separated into ‘re-saleable’, ‘broken’ and ‘faulty’, so you have immediate access to products that can be resold.

Traffic

By integrating your digital returns into your internal systems, you are already aware of what’s coming back to your warehouse, so you’ll be able to take receipt of re-saleable items, quickly separate them from the others, and repackage them for the next shipping. Hopefully the item will then head back out to the next shopper quickly and seamlessly. The remaining items then receive their own treatment, as set out below.

Update

As goods come in, your inventory management system needs to be updated, either by manual data entry or code scanning. That lets your system know what’s in stock and what condition all of your stock is in. This can also be used to trigger the process of refunding your customer.

The other thing that might need to be updated is your website. With a paper slip and a sticky label, it’s really hard to immediately identify issues of presentation, customer perception, fit, colour and more. When your customer books a digital return, they can give a little more detail about their reasons and you might discover some difficult but helpful truths about your site that may reduce your overall returns rate.

Dispose

Irreparably damaged goods need to be addressed in the least wasteful and most sustainable way possible. As a responsible retailer, landfill or incineration are the last resorts for products that can demonstrably be recycled. Perhaps you have an arrangement with a fabric recycling organisation? Or can partner with a business that can introduce your products into the circular economy? Either way, you’ll be looking to ship these out quickly and cheaply.

Investigate

The fact your items have been sent via a digital returns portal also means you can also quickly spot what hasn’t arrived – meaning you can investigate and make claims for any losses.

Digital returns make it easier to look into problems with faulty goods too, as it can flag recurring issues. A consistent problem may mean that this product requires removing from inventory. If it’s key to your ranges, then you can start to understand how to change its design, if you own the product IP, or work with the manufacturer to fix it.

Stay connected

You’ll notice that there’s a lot of emphasis here on the information that your customer can share with you, that can ultimately improve the way you operate. This is no accident. Staying connected with the customer, learning from them and making sure they are well-informed are absolutely key to maintaining their loyalty. Let’s move on to the communications around returns.

Download the full copy of eCommerce Returns 101 here.

How to write a great ecommerce returns policy

This blog article is an excerpt from our latest guide, eCommerce Returns 101, which covers the entire process of writing and implementing a great returns policy that converts more customers and keeps them coming back, without breaking the bank. Download your copy for free here.

Writing an ecommerce returns policy that helps you to stand out, converts browsers to customers and still sits within the goals of your company can feel like a daunting task, but it really needn’t be. We’ll take you though some of the basics of drafting an effective returns policy show you why focusing on great returns is an investment in the future. At this stage, it’s probably worth familiarising yourself with a few of your competitors’ policies. So, grab a coffee, have a quick Google and then we’ll dive in…

A clear returns policy reassures and converts

Today’s shoppers are looking for more than just the right product at the right price before they commit to spending their money. Don’t be alarmed, we’re not talking complimentary fruit baskets and foot rubs – they just want to be reassured that your brand values their custom. Achieving this isn’t as cryptic as it might sound. They are simply looking for great service, both at the time of sale and delivery and in the event that they need to make a return. In fact, according to our recent research with YouGov, returns are every bit as important to shoppers as payment and delivery.

So, when a new customer discovers your brand, whether by accident or design, a clear indication of your returns policy may well provide the comfort they need to explore further. Take, for example, a simple Google search for men’s shirts. British menswear brand, T.M. Lewin answer the big questions immediately by addressing price, delivery terms, product guarantee and their generous returns window. They mirror this approach in email campaigns and home page.

It’s a smart move, given that 80% of shoppers check returns policies before making a purchase. And a poor or unclear policy will actively discourage over 50% of shoppers, according to Pitney Bowes.

To free, or not to free?

That is the question. By now you’ve probably noticed that there’s no such thing as a ‘standard’ returns policy and probably the thorniest question to tackle is that of whether to offer free returns. After all, the costs add up and can have a significant impact on your business, and much is made in the media about fraudulent returns and ‘wardrobing’. This being the case, you might wonder why the huge online retailers (such as Amazon) continue to offer no-questions-asked returns? A quick dive into the detail shows that the actual number of fraudulent returns is surprisingly small. Therefore, it makes better financial sense to absorb the cost than to increase vigilance across all customers. That said, they are also incredibly good at managing data, tracking behaviour and blacklisting repeat offenders.

However, some retailers continue to offer free returns only if items are defective or incorrect and charge a shipping fee for those that are unsuitable or unwanted. There’s a phrase that’s sometimes applied to these kinds of returns: ‘buyer’s remorse’ and we find this somewhat unfair to the customer. It cultivates a blame mindset, when shoppers are absolutely entitled to have a change of heart, whatever the reason. There are any number of reasons a customer may wish to make a return and… wait for it… some of them may even be an issue on the part of the retailer. Inherent flaws, inaccurate colour depiction and variable sizing are just a few reasons that a customer might have a very legitimate reason for dissatisfaction. It’s up to you, as a retailer, to harness this information at the point of return. A little food for thought, there.

On brighter matters, there are two very good reasons for offering free returns:

It creates new customers

As we’ve said previously, consider your returns policy as part of your customer acquisition toolkit. It creates a sense of assurance where human-to-human contact doesn’t readily exist. When shoppers see that they have the safety net of being able to return goods for free, as part of a clear returns policy that inspires confidence, they are more likely to reach the checkout.

…and gives them a reason to return

Our research with YouGov also highlighted that 65% of shoppers would reconsider purchasing with a retailer that charged for returns. It not only creates a financial barrier, but a psychological one, as customers factor in the potential cost of returning the item into their spend. If they can potentially save that cost elsewhere, they will. Offering free and easy returns is probably the quietest way into a customer’s heart.

Create the balance that’s right for your business

Begin by having a clear understanding of what value free returns can have to your business. If you’re a young business, scaling up, then it makes a lot of sense to broadcast ‘free returns’ as a way to drive acquisition and nurture retention. However, you might find it prudent to give customers a limited ‘window’ within which returns are free and after which they incur a charge. This means that returns get to you faster and supports swift resale.

When charging for returns, it’s really important to be sensitive to customer perception. Are you asking them to pay for return shipping or return shipping and restocking fees? If your customers get the slightest impression that they’re being charged more than they consider fair, they won’t come back.

Of course, having a clear view of the returns process gives more power to your arm. Digital returns can play an important role when testing strategies and show you precisely what value defined customer segments bring to your business. It can show you which customers should qualify for free returns and even support changes to the way you operate based on seasonal trends and reasons for returns.

How big is your window?

We’ve come to acknowledge that a minimum returns window for unwanted goods is 30 days, with conditions attached, but that’s certainly not the case for all retailers. 60 and even 90 days cause no audible gasps and when the pandemic hit, the rulebook was well and truly shredded. There are, however, some retailers who consistently find themselves given props for their generous returns policies. IKEA’s ‘365 days to change your mind’ is a staple of their brand and sustainable fashion brand Patagonia has received plenty of column inches for having no time limit on returns at all, simply asking that “returns for fit or colour be made in a timely manner and that items be kept in new condition with tags attached”.

One might be forgiven for assuming that a longer returns window will naturally increase the rate of returns by a significant volume, but actually this doesn’t really seem to be the case – after all, if a customer hasn’t made their return within a month, they’re hardly likely to do it after six. While you might see a slight uplift in overall returns and potentially a marginal increase in the age of returned goods, it’s likely to be of negligible concern when compared with the benefits. Overall, a lengthier returns window may actually be a relatively low-impact way to inspire shopper confidence.

Trial and track

Your returns policy isn’t carved into stone and it’s entirely possible, within reason, to trial different approaches, based on what you see your competitors doing and your current conversion and return rates. You might discover that longer returns are more suited to particular kinds of products and price points. The decision is truly in the data, so set your test parameters and determine a returns window that suits both you and your customers. 

The devil is in the detail

A wise person once said, “without clarity, there is chaos” and this is something to keep at front of mind when drafting your returns policy – deciding clearly and precisely what does and does not qualify as an acceptable return (for non-faulty items) and why. Many retailers take the approach that simplicity is best and capture the basics in one statement:

For an exchange or refund, please return your item, unused and undamaged, within 30 days. Please see our list of terms and conditions for items which can only be returned if defective.

These ‘exclusions’ or products unsuitable for return are usually items which are intangible (such as a service, subscription or gift vouchers), personalised, of an intimate/healthcare nature, received in sealed boxes for copyright purposes or likely to deteriorate rapidly (such as fresh foodstuffs). However, all businesses and customers are different, and there are ways to operate returns with this individuality in mind.

A good example of this in action is Amazon, who give certain autonomy and decision-making freedoms to those with customer-facing responsibility. Their automated returns process is incredibly straightforward, but if a customer needs to speak to a representative, they are well-trained and capable of making swift judgement calls around refunds and exchanges on a case-by-case basis. Amazon has taken the stance here that it’s important to prioritise customer experience, as it is likely to pay for itself in ongoing brand loyalty.

This is just one way that you can find an opportunity for a PR win in your humble returns policy. Another example comes from John Lewis in the UK, who include an assurance that they will refund the standard delivery charge if the full order is returned within 14 days. How unexpected! And how welcome! This goes above and beyond the statutory consumer expectations and sits well with the perception of trustworthiness and reliability that the brand enjoys. It’s clear that returns are more than just a physical act, there is also valuable psychology at play. In short, clarity is, of course, really important, but knowing when to flex the rules can be even more so.

Encourage exchanges for maximum value

Wouldn’t it be lovely if every time you issued a refund, the customer simply used it to buy something else from your store? And thus, the idea of ‘store credit’ was born. But unfortunately, it’s not proved particularly popular with shoppers, who dislike the idea of having their cash ‘shackled’ to one place. So, what’s the alternative? Customers feel perfectly happy making exchanges in-store, but the lack of immediacy means that they are often less popular online.

Fashion retailers have long been familiar with the concept of ‘power shoppers’, loyal to the store and with higher long-terms spend, they will shop and exchange frequently in order to get exactly what they want. They’re a valuable customer base, both in terms of financial value, but also brand ambassadorship, sharing their experiences widely among peers and on social media. A slick exchange mechanism is exactly the kind of service that will keep them spending and enabling easy exchanges online is not outside of the realms of possibility. After all, they keep customers’ money within your business, while at the same time creating a positive and shareable shopping experience. It’s worth scrutinising your processes to create a more streamlined way to get exchanges to customers.

And this is where strong data management comes in. A digital returns platform can help you to flag these ‘power shoppers’ quickly and segment them by their value to your business over time. It’s then entirely possible to expedite exchanges exclusively to these customers (that is, send replacements before you’ve even received the initial goods) based on trust, creating an exchange cycle of less than 24 hours.

To sum up, then: your returns process doesn’t have to be hyper-generous, but there’s very few ways to upset your customers quicker than by making them feel punished for returns through extra charges. Free returns are an amazing acquisition and loyalty tool, but they do have a cost, and you should tune your returns proposition accordingly. Above all, having a clear returns policy that’s easy to access and good enough to advertise is crucial for ecommerce success.

Once you’ve written that policy and returns start to come in, the next step is processing.

Download the full copy of eCommerce Returns 101 here.

The 3 Biggest Myths About eCommerce Returns

This blog is an excerpt from our new retailer guide: eCommerce Returns 101. It covers everything ecommerce retailers should know when it comes to returns, from mythbusting to practical advice on returns policies and guidance on how to structure returns communications. You can download the whole guide for free here.

eCommerce businesses tend to have a very negative view on returns. That’s pretty reasonable really, considering they can be costly and are effectively a customer rejecting your product – nobody likes being turned down, and paying for someone to turn you down is even worse! Much of this guide is about how to make that cost smaller and reduce the chances of the return happening. However, it’s also crucial that online retailers don’t get caught up in the idea that returns are inherently negative – they’re a normal part of doing business, and getting the process right can supercharge your growth and drive value right across the business.

With that in mind, we thought it would be good to challenge a few of the bigger myths that often come up when discussing returns.

Myth 1: Lots of ecommerce returns are fraudulent

The data can seem scary. Retailers lose approximately $18 billion annually to returns fraud per a 2019 report, which is a lot of money – but at the same time, that’s just 0.3% of the value of goods sold in 2019. Of course it would be better if that number was lower, but remember that the more you target and penalise the 0.3%, the greater the risk to the rest of your sales. As a customer, it’s easy to feel like you’re being punished for wanting to return something. That’s a dangerous lasting impression to leave!

There are good ways to tackle returns fraud, though. Working with a fashion retailer (& Other Stories), Doddle helped to simplify their returns policy and improve policy adherence by digitising their returns process. If you’re just providing a return label in the parcel when you ship an order, how can you stop a customer returning items which are outside of policy, or after the policy is supposed to lapse?

With a digital journey, the customer is given the option to return orders received within the policy window. That provides a barrier to fraudulent returns, as well as giving the retailer better data about incoming returns, and clearer insights from the returns they do receive.

Myth 2: Making returns harder saves money, because you get fewer returns

Some retailers acknowledge (not publicly, mind you) that part of their returns strategy is to discourage returns by putting hurdles in place for the consumer before allowing them to return. That helps them to reduce the rate of returns, and fewer returns means a healthier bottom line, right?

That’s absolutely true, and this method is effective. Guide over! Just kidding. This method works – in the short term. YouGov research commissioned by Doddle found that shoppers who have experienced frustrations in the returns process are significantly less likely to do business with that retailer again. The top frustration is having to pay for returns, which would make 58% reconsider future purchases. Having to find a location to take the return back to frustrates 36% of consumers, and 33% say that having to obtain an authorisation from customer support puts them off from shopping again in future with the same retailer.

All of the returns prevented by frustration turn into frustrated shoppers. Frustrating customers is bad for loyalty! 85% of shoppers say that returns are important to their perception of a retailer, and deliberately making that experience worse is bad news for customer retention and lifetime value.

Myth 3: Super-long policies are the future

This is sort of the flipside of myth #2. The idea is that if you’re not doing a Zappos-style 365-day policy, you’re falling behind, and longer and longer policies are the way forward for retail.

The truth is that yes, having a returns policy that is too short will frustrate 39% of shoppers (according to the research we referenced above). However, just 28% say that they would prefer retailers to offer returns periods of longer than 30 days! For reference, nearly twice as many shoppers (53%) said that they would want retailers to offer better communications and visibility during the returns process, for example including tracking details, confirmation of receipt and better refund information. Half of shoppers said they want more convenient locations to return items to, like local grocery stores and post offices.

The data show that while the length of the return window does matter to some customers, more customers care about how easy and convenient the process is than how long they have to return something. While longer policies can be a useful tool (as we’ll cover later), it’s not essential that your policy is 100+ days for it to be highly effective. Instead, it’s more impactful to focus on how you actually implement the returns process.

So now you’re clued up on the biggest myths in ecommerce returns, what should your returns policy actually look like?

Download the full copy of eCommerce Returns 101 here.

HiveBox Case Study: How lockers became essential to Chinese ecommerce

The numbers tell their own story. Founded in 2015, HiveBox has received over a billion dollars of investment and is valued at over $3 billion USD. The initial funding ($78 million) came from 5 of China’s biggest logistics businesses: SF Express, UDA Express, STO Express, ZTO Express and GLP (Global Logistic Properties.) In and of itself this list of founders is remarkable. To translate this into UK terms, it would be like DPD, Royal Mail, Amazon and Hermes joining forces to create a parcel locker brand – in other words, almost unthinkable. Interestingly, the collaboration didn’t last. All of the carrier shareholders other than SF Express divested their shares in 2018, leaving just SF Express as the primary shareholder. The others joined Cainiao – the logistics network of Alibaba.

Since its founding, HiveBox has swiftly grown both organically and through acquisition. In 2017, HiveBox acquired a business called CIMC E-Commerce & Logistics Technology for $123 million, adding 14,000 additional lockers (and an estimated 800,000 parcels daily) to their network, which at the time was around 60,000 locker banks.

By 2020, the network was up to 170,000 banks of lockers, making it the biggest player in China’s parcel locker market, which in total ran to 400,000 lockers. In May of that year, HiveBox announced that it was acquiring its biggest competitor in the space: state-owned China Post’s own locker system, which represented nearly 25% of the market with 94,000 locker installations. That put HiveBox’s market share up to 65%. In January 2021, HiveBox completed another round of financing, receiving $400 million USD in funding. Today HiveBox is by some distance the biggest parcel locker operator in the world – but its business is more than just the hardware.

HiveBox offers several types of locker installation, catering to different requirements, and not all are for parcel delivery. They also offer lockers which are designed to provide secure storage for sensitive files to businesses, for example. Also interesting are the marketing and advertisement services which HiveBox has built into its business.

Parcel services

HiveBox’s bread and butter is the parcel delivery service. Its 170,000-strong locker network processes over 9 million daily parcels. These parcels are either chosen to be delivered to lockers by consumers at the checkout online, or they are dropped into lockers when couriers aren’t able to facilitate home delivery, although this can be controversial, as we will see later.

Pickups are straightforward: shoppers receive a QR code to scan at the locker, which automatically opens the right door with their parcel inside. This is the same system that has become popular for parcel lockers right across the world.

HiveBox also offers consumers a membership program. Membership costs ¥5 for a month, or ¥12 for three months. The dollar value of those prices seems crazy – just 76 cents per month – but the comparison is not particularly apt, as prices and general cost of living are significantly lower across the board in China compared to the US.

As the diagram of parcel services shows, membership to HiveBox allows consumers to leave parcels in the locker for up to 7 days free of charge. Non-members have 18 hours to collect their parcel. After this cut off, they pay ¥0.5 every 12 hours the parcel is uncollected, up to ¥3. There are also members discounts for delivery to HiveBox locations, and access to promotional offers from retailers.

On the courier side, a courier registers with HiveBox and then pays a small fee per parcel left in the locker, which is charged depending on the size of the box.   Shoppers can also order items for delivery directly from HiveBox’s WeChat account. Here, HiveBox posts daily offers from retailers to its followers.

Advertisement services

HiveBox lockers are designed to be used almost like billboards, with advertising appearing on the lockers themselves, as well as on the smart locker screen and throughout HiveBox’s WeChat account. Membership data and social account data is available to advertising partners to target particular demographics and customer segments, and they can offer deals to HiveBox members.

HiveBox lockers, screens, app and WeChat account are all used for advertising.

Meeting consumer demand

The graph shows the steady growth of ecommerce revenue, parcel volume and parcel locker installations (called intelligent cabinets in China.) As ecommerce parcel volumes have grown, so too have the challenges associated with delivery in China – failed deliveries, and consumer concerns with home delivery. Here in the UK, we don’t think twice about the fact that our delivery driver has our full name and home address, and will know if we’re not at home. In other places in the world, consumer confidence in the process is not at the same level as it is here, and so there’s a greater appreciation for the security of a locker solution.

In addition to what the consumer wants, it’s also obvious that carriers have every incentive to deliver as many parcels to lockers as possible. Consolidating their deliveries like this helps them to deal with the ridiculous volumes – expected to total 74 billion for 2020 – in a profitable and efficient way.

New shoppers coming online

The Chinese ecommerce market is increasingly driven by shoppers in so-called lower-tier cities, outside of their provincial capitals. Parcels delivered outside of the 31 provincial capital cities accounted for just under two thirds of the total volume in 2020, a significant increase from 50.8% in 2015. In the cities where these parcels are being delivered, last-mile infrastructure is typically less advanced than in the major cities. These cities are therefore a strategic priority for HiveBox’s future development. Currently, HiveBox is operating in 100 cities across China.

Government support

HiveBox was a beneficiary of the social distancing measures and behaviour changes brought about by COVID-19, with government departments emphasizing lockers as a way to reduce contact between delivery drivers and customers. The State Post Office said in a February 2020 press conference that it would seek to “actively promote [parcel lockers]” as a delivery option, which has helped drive increased consumer adoption of parcel lockers.

Margin struggles

China’s parcel delivery industry remains intensely competitive, and while volumes have grown rapidly, competition on price between delivery companies has shrunk profit margins. COVID-19 also resulted in fewer delivery personnel being available, which has intensified the pressure on carriers to find ways of consolidating deliveries to maximise the efficiency of their available workforce.

HiveBox has also had challenges with profitability, posting losses of $120 million (USD) in 2019 and further losing nearly $130 million in the first 3 quarters of 2020. Historically its revenue has been driven by the advertising noted above and the small fee couriers pay to use the locker. It has also been somewhat controversial in attempting to make up losses in May 2020 by initiating the model of charging for parcels left in the lockers. Initially this came without a grace period (the 18-hour parcel dwell time limit now in place) and users took to social media to display their anger – with some going as far as cutting power supplies to locker banks in their area.

Part of the frustration was that carriers would frequently drop parcels into lockers without the previous consent of the shopper – to then be charged on top of this was unsurprisingly unpopular with Chinese consumers. So what do consumers make of HiveBox?

Consumer opinion

In a survey of 38,550 Chinese ecommerce shoppers from May 2020, over 40% said they needed the service of HiveBox a lot, and just 18% said they had no need of it. These respondents tended to be single white-collar workers, living alone in economically developed provinces and cities. Over 90% of respondents reported shopping online more than once per month, 67.6% said they shopped online more than 5 times per month.

For this demographic, HiveBox is vitally useful, because they are more likely to not be at home during the day, which makes receiving home deliveries difficult. However, this also can limit the times at which they are able or willing to pick up a parcel. This insight was the impetus behind HiveBox extending the 12 hour grace period for which parcels can be left in the lockers without charge, from 12 hours to 18 hours.

Carrier practices

Part of the concern Chinese consumers have exhibited around lockers is that they aren’t always in control of their use, with couriers dropping parcels into lockers without being asked to and despite the recipient being at home. The rule is that a courier should call before diverting a parcel to a locker, but the efficiency of the locker and the massive volumes of parcels to be delivered incentivizes couriers to override the consumer’s wishes. This leaves them open to be reported, or for consumers to request re-delivery.

However, given the rate at which these reports actually get made and fines are issued, it’s still economical for couriers to default to parcel lockers – perhaps while noting which addresses are liable to report them for doing so, and ensuring parcels for these addresses are delivered to home.

Conclusion

In sum, HiveBox is a key part of the delivery ecosystem in China, with nearly 70% of the parcel locker market in its grasp and encouragement from government departments. It’s enthusiastically adopted by parcel carriers – perhaps overly enthusiastically – and many consumers appreciate the convenience of a locker delivery, although they’re largely unwilling to pay extra to use a locker. It is worth mentioning that while the locker network receives a great deal of interest, lockers deliver a smaller proportion of out-of-home deliveries in China than classic PUDO operations being run out of convenience stores and post offices. Equally important is that there remains a tension between consumers wanting home delivery and couriers who are willing to outright skip the home delivery attempt in favour of using lockers as a first resort. This might end up with new regulation or increased enforcement with tougher penalties for carriers, or carriers may increase the price of home delivery in order to make it economically viable for them to actually attempt all of these deliveries.

Whichever way that tension resolves, China is going to be the first country in the world where more than half of retail happens online by the end of 2021, and that maturity and market size makes it a vital source of data for the future of ecommerce globally. The fact that around 40% of Chinese ecommerce deliveries are out-of-home deliveries illustrates the importance of consolidation in the last mile as markets mature – a lesson that many other carriers around the world are learning quickly today.

InPost’s expansion plan doubles down on lockers. Will it work?

It’s been a big month for InPost. Off the back of their €9bn IPO earlier this year, they’ve been grabbing headlines throughout March for several big developments. QR code-driven ‘Instant Returns’ in a partnership with Missguided, plus a deal with Transport for London to launch sixty lockers across London’s tube and train stations both drew attention in the media. However, the crown jewel of their PR dominance was the news of their intention to buy Mondial Relay, who operate almost 16,000 PUDO locations across France. This acquisition was firmly hinted at in their IPO Prospectus, which also highlighted that “[InPost] expects to pursue selective acquisitions of out-of-home delivery networks and automating them through the development of a dense APM network,” – saying, in other words, that it would be sticking lockers into these parcel shops in place of the over-the-counter model they currently operate..

So that begs the question – with the world’s second biggest consumer-facing locker provider aiming to convert existing parcel shops into APMs, does that mean lockers are the ultimate out of home option? With some posts and carriers shifting focus and moving towards lockers too, should we take this news as a symbol of the viability and scalability of lockers compared to other out-of-home delivery formats?

The context of InPost

The dominance of InPost in Poland is nothing short of remarkable, where they’ve rolled out over 10,000 lockers and have helped shape the market towards out of home (30-40% of all ecommerce parcels are delivered OOH). Against a competitive landscape including DPD, UPS, FedEx and Poczta Polska’s network of post offices, they’ve earned a 45% market share through aggressive rollouts, strong retailer partnerships and changing the consumer mindset with delivery price discounts. Poland is well ahead of many European markets on incentivising OOH delivery in this way. Home delivery is priced at around €4.00 while InPost’s PUDO locations are about €2.50 – and once consumers began to understand and use lockers, they never looked back.

So why are InPost looking to acquire PUDO businesses for their expansion? Well, InPost need scale, and right now they’re the only locker business of any real scale in Europe (although SwipBox are giving it a go in the Nordics) so the only buying choices were PUDO networks. But that partly dodges the question – why acquire at all?  Why not build out lockers themselves instead of trying to replace existing options, where consumers have made their choice to use a PUDO rather than a locker?

InPost’s biggest concern has got to be that consumers are choosing parcel shops and find them easy to use. Parcel shop behaviour is extremely well established in large markets like the UK, France and the Nordics. They’re taking a gamble – buying existing (and working) options and trying to change the status quo of a consumer base who have already made their choice over alternative locker options, like La Poste’s ‘Pick Up’ lockers, and Amazon’s imaginatively named “Amazon Locker” lockers, both of which are already available throughout much of France.

The Amazon precedent

Ten years ago, Amazon launched the ‘Amazon Locker’ brand in the UK and US, before rolling out into five other markets: Italy, France, Australia, Canada and Spain. Since then, they’ve diversified their OOH proposition, now offering over-the-counter options (as seen in thousands of UK convenience stores through a partnership with PayPoint) named ‘Amazon Counter,’ with both Counter and Locker tied together under the wider ‘Amazon Hub’ brand. It’s hard to find clear data on this, but in the UK it appears that Amazon has slowed down the deployment of new lockers in favour of spinning up thousands of PUDO locations.

The problem is that to turn on PUDO in a convenience store requires a handheld device and some shelf space. Deploying a locker bank involves finding a place for it to sit, potentially renting that space, and paying for power and internet connection. PUDOs are therefore far, far cheaper to scale. It took Amazon around nine years to reach 4-5,000 lockers in the UK, but within the last two years the same business has reached almost 10,000 PUDO locations. It’s not hard to see why Amazon changed their last-mile strategy; in markets with lower OOH delivery adoption in general, it makes much less economic sense to splash on massive locker rollouts, or, in the case of InPost’s European expansion, replace the existing norm.

More channels makes OOH more effective

The other reason Amazon have sought to diversify is that one channel is inherently limiting when it comes to building an OOH network – no one wants all of their eggs in one basket. Different consumers prefer different options, and choice is king. We know that for a fact: whenever we run consumer research (in the UK or overseas) there’s no overwhelming majority on PUDO preference. Some people prefer lockers, some prefer post offices and some prefer third-party locations like supermarkets. When we had our own branded Doddle stores in the UK, we got to know a lot of our customers as they were regular visitors. Many would wax lyrical about the benefits of being able to be face-to-face with a real person – it’s always more difficult to moan about an issue to a machine!

Diversification goes both ways

So why then, are major posts and carriers across the global heavily investing in lockers? The answer lies once more in consumer choice. Most of these carriers already have established PUDO locations – either parcel shops or post offices, and to diversify they need to add lockers to the mix. In Sweden, PostNord has 70% market share across 3,000 locations, but are now trialling locker pilots for the first time. Norway’s Posten Norge are aiming to increase their locker footprint from 100 to 3,000 locations in 2021 alone (against a network of 3,500 existing PUDO points). An Post in Ireland have recently trialled 20 lockers, and Poste Italiane have launched 350 lockers to compliment their post office and parcel shop network. Our partners in Australia and Japan (Australia Post and Yamato) have also built a blend of over-the-counter PUDOs and parcel lockers into their OOH networks. These carriers recognised the need to diversify from their existing offer to capture additional volume from both (i) consumers who wanted to use parcel lockers and (ii) retailers who want to offer additional options on their checkouts.

Two countries that have arguably nailed the locker rollout are Singapore and Canada – where governments have pushed federated lockers for communities. In both nations, instead of focusing on cost reduction for carriers, the governments have focused on improving the consumer experience and solving an actual issue (the inability to deliver to home if the consumer isn’t in during the day). Those countries are about as dissimilar as you could imagine Singapore has an immense density with a majority of the population living in apartment blocks and Canada has massive, largely empty landmass. Both examples involved lockers positioned ideally for communities. Singapore’s Locker Alliance targets towns which are essentially groups of high-rise buildings, and places locker banks within 250 metres of any of those buildings. In Canada, the strategy is similar albeit on a physically larger scale, positioning ‘community mailboxes’ in neighbourhoods. Despite their differences, both nations are seeing lockers as a growing solution for consumers.

Have InPost got it wrong?

Time will tell whether replacing store-format PUDOs with lockers will be an effective way for InPost to roll out into Europe, but it’s an untested strategy. If this emphasis on a single format continues, InPost would appear to be either banking on a huge shift in consumer desires around out-of-home delivery or accepting that their solution will address only a minority of shoppers who prefer lockers.

Clearly lockers will have a key part to play in building up OOH delivery options and helping carriers to maximise the convenience factor of OOH delivery.  Lockers might be the cherry on top, but parcel shops and post offices are the cake. Combining a PUDO network of post offices, third-party concessions and lockers appears to be the winning formula for the dominant, market-leading carriers in every major ecommerce market, and it’s worth emphasising that the biggest carrier  to have initially opened their last-mile offering with lockers (Amazon Logistics) is now moving towards parcel shops and concessions, while carriers that have long held a huge network of post offices and parcel shops are now launching pilots and networks of locker banks. InPost are certainly cutting against the grain with this plan; but that’s no guarantee of failure (nor of success.)

Solving a capacity crisis

This blog article is part of our South Korea market insight series, exploring opportunities for parcel carriers and offering insight and comparison to other parcel markets around the world. Download your free copy of our South Korea market report here.

South Korean parcel volumes have grown by 12.7% (CAGR) over the past five years, with more than 2.5 billion packages shipped in the most recent year for which figures are available. But just how sustainable is that growth? With home delivery as the preference of an impatient customer base and, as we discuss below, complications in the employment landscape, something will have to change.

In many markets, adding more capacity would be an obvious and easy fix to this issue.  Where there is a large working population and low relative wage costs, hiring more people is the simplest approach. Where there are struggles getting items from A to B, adding more distribution centres can help. But none of that applies in South Korea. 

Upwards of 60% of ecommerce orders are placed by the 25 million or so people living in and around Seoul. Around 70% of people live in apartment blocks in densely populated urban areas. Thanks to its ageing population and low fertility rates, South Korea has a shrinking working population. Consequently, there is limited scope to add more pickers, packers, drivers and so on into the mix. Indeed, in the near future, it’s likely that just about every role in fulfilment could become a costly challenge to fill as the pool of potential applicants gets ever smaller.

Currently, such roles are typically filled by gig economy workers. But of late, South Korea’s delivery sector has found itself mired in much the same gig-worker controversy as several other countries. And while this model has helped keep costs low and increase flexibility, there are indications that change is on the way.

Rising costs on the horizon

According to a Reuters’ report published in November, most of the country’s 54,000 delivery workers are classed as self-employed. They aren’t entitled to the same benefits and protections as regular employees and this is drawing the ire of trade unions. It’s a situation that has been amplified by the COVID-19 pandemic, which union spokespeople claim has led to the deaths of a number of workers in the retail fulfilment sector.

It is also attracting the attention of policymakers. Labour Minister Lee Jae-kap has hinted that changes are overdue, saying: “Policy, infrastructure and technology hasn’t kept up with the pace of growth of the delivery industry and the burden has manifested in long hours and heavy workloads.”

Setting aside the rights and wrongs of employment classification, this all adds up to a future in which the carrier industry will find itself facing rising labour costs. On top of that, with such a dense urban environment, the cost of securing new sites for distribution and sorting centres is extremely high compared to other mature ecommerce markets in larger nations like China and the US.

Delivering high quality service without new costs

The luxury of convenience suits shoppers, clearly. But for carriers, it’s a very different picture. Finding ways to continue to delight customers with high levels of service, with convenience on tap, while simultaneously coping with growing demand is a headache. 

Bringing a PUDO network to fruition will provide exponentially more capacity into the network. But there are already lockers available in many downtown locations and they have failed to capture the public’s imagination. An alternative to lockers is a must-have, it would seem. While there needs to be a long-term effort to make alternative PUDO options more appealing, carriers will have to take short-term action to avoid being squeezed between costs and convenience. 

Amazon is showing elsewhere in the world that this is possible. In many of its markets, the logistics/retail giant has been actively encouraging its customers to increase their usage of pickup and dropoff locations, with discounts for shoppers who select Amazon Hub (their PUDO brand) delivery locations. They’ve even run homepage promotions to raise awareness of the delivery option.

They’re pushing PUDO in markets like the UK for reasons that apply pretty well to South Korea: costs of delivery are rising, capacity is being stretched to the limit, and it’s increasingly expensive to buy and build the distribution centres and warehouses required to deliver the constantly-growing volumes of parcels.

To find out how Doddle can help you to expand your out-of-home delivery capacity and performance, and shape your strategy for the future, get in touch today.

The oversized impact of returns

This blog article is part of our South Korea market insight series, exploring opportunities for parcel carriers and offering insight and comparison to other parcel markets around the world. Download your free copy of our South Korea market report here.

Rocket, the delivery arm of South Korea’s largest online retailer, Coupang, says it sees a very low rate of returns – just 2-3% of its outbound volume. But despite the relatively low returns rate, returns are every bit as important to the shoppers of South Korea as to those in any other developed economy, with “returns/refund/exchange convenience” emerging as the most important out of six aspects of delivery satisfaction in a 2019 survey run by Consumer Insight and Hanyang University Retail Research Center. The survey suggests that shoppers feel that returns are even more important than speed of delivery, with more than twice as many consumers selecting convenient returns than rapid delivery.

So what’s the problem?

Returns tend to be processed via carrier and picked-up from the customer’s home. Korean shoppers want to be able to change their mind for any reason and return items free of charge where possible. Although many retailers expect shoppers to pay the shipping costs of returned items, some are starting to use returns as a customer acquisition tool. Coupang, for example, offers its Rocket Wow loyalty program members free delivery and returns.

While overall return rates are often fairly low, retailers clearly need to be sensitive to the expectations of their customers whilst also looking after their own margins. It’s easy to imagine that as free returns continue to be used as an acquisition tool in ecommerce, return rates are likely to rise.

For carriers, some kind of synergy around the pickup of these returns from homes will have to be found in order to make economic sense of the home collection service. At low return rates, such an offering is expensive but manageable. But if return rates increase, this service may quickly become unsustainable alone.   

For retailers, offering inexpensive returns to customers is costly and will drive them to seek efficiencies – but they could also benefit from getting more data and insight from their returns.

Solving a massive retail headache

Most retailers are juggling multiple back-end systems. Eliminating as much duplication and cost from processes is vital when there is limited scope to increase price or decrease service levels. 

Retailers plugged into a single, end-to-end returns platform (provided by a carrier) could improve the customer experience of their returns process whilst removing unnecessary cost from their operations. Hassle isn’t just bad for customers – it needs to be done away with throughout the network.

Presented with a simple-to-use, no-hassle returns platform, customers would be able to process their collections and request their refunds with ease. The carrier would be able to see precisely what collections would need to be made on any given route, and the retailer would have full visibility of their returns pipeline.

That visibility translates into data – data about who is returning, what they’re returning, and how often they return. Having this insight allows a retailer to tailor the returns experience and even the returns policy to individuals. For example, they may decide that high-value customers refunds can be released before the returned item has been processed, to give an extra benefit to their most valuable shoppers. Given that carriers sit at the middle of the returns transaction between customer and retailer, they’re ideally placed to offer that platform to the retailer as part of their services. From the platform there are plenty of opportunities to develop additional revenue streams, for example providing anonymised data from across the retailer base, building a picture of returns behaviour and segments to allow retailers to better understand, market to and delight their customer base.

To find out how Doddle can help you improve your returns proposition to retailers, get in touch today.

The convenience truth: making PUDO attractive in South Korea

This blog article is part of our South Korea market insight series, exploring opportunities for parcel carriers and offering insight and comparison to other parcel markets around the world. Download your free copy of our South Korea market report here.

Consumer expectations run high in South Korea – shoppers want convenient returns, fast delivery to their homes, and zero hassle at all times. 

They buy lots of smaller, everyday items online. But if delivery timescales are too long, they will revert to picking things up from a nearby store, of which there are many. That combination has helped foster the growth of next-day and same-day delivery services from online retailers who don’t want to miss out.

Lockers are not a popular choice – around 95-99% of orders still go to the shopper’s home and failed delivery rates are low as doorstep theft or ‘porch piracy’ is almost non-existent.

The watchword in this market is convenience. How do you convince customers to change their behaviour when they are so happy with the status quo? Not by making things more complicated or adding layers of cost and inconvenience, that’s for sure.

It might seem like an impossible challenge. But doing nothing is not an option. From a cost perspective, a delivery vehicle taking 50 parcels to a single PUDO location is a more attractive option than the same vehicle taking those same parcels to 50 home addresses.

But how to convince shoppers to use a PUDO offering? Well, elsewhere in the world, Amazon have begun to do this through incentives and psychological ‘nudge’ techniques in their checkout journey.

For low value items being delivered to certain areas, where the retailer recognises that it’s not profitable for them to offer rapid home delivery, their Prime promise is offered only through PUDO collection counters and lockers. Pricing incentives, such as offering free delivery to all PUDO locations, and having a basket value target for free home delivery, can also help to guide customers towards using out-of-home delivery options.

South Korean shoppers have already shown themselves to favour a quick trip to the store over waiting for delivery. Using a PUDO network as a way to capitalise on that existing behaviour could be a solid first step in shifting attitudes and reducing the cost of delivery for carriers.

To find out how Doddle can help you improve your customer experience and bring innovation to your last mile deliveries, get in touch today.

The costs of having the second-most mature ecommerce market on Earth

This blog article is part of our South Korea market insight series, exploring opportunities for parcel carriers and offering insight and comparison to other parcel markets around the world. Download your free copy of our South Korea market report here.

With South Korea having 10 times the global average population density, which means ecommerce orders get delivered quickly and costs are slightly reduced compared to, for example, US residential deliveries, where homes are more spaced out and routes are therefore longer with a lower drop density.

But it also means a lot of people live within easy reach of a physical retail outlet. One consequence of that is there’s little need or incentive to rely on online shopping unless it offers lots of convenience – shoppers in South Korea have high expectations where convenience is concerned. For example, one of those expectations is that delivery will be free or low-cost, while home delivery is by far the most popular option. 

Chinese ecommerce is forecast to take over half of retail sales in the next year. South Korea is in second position on the list of countries with the highest share of retail happening online. It’s somewhat unlike many other mature ecommerce markets though – whereas in China, failed deliveries due to recipients not being at home result in a massive amount of locker usage, in South Korea that’s not the case. Parcel theft is very rare, which allows parcels to be left on the doorstep without risk – so failed delivery rates are very low for home delivery.

What that means for the typical online shopper in metropolitan areas of South Korea is that there is little or no incentive to opt for anything other than home delivery. Convenience is king.

A perfect storm

The situation in South Korea looks like a perfect storm. eCommerce adoption is increasing more than ever, and if consumers continue to expect extremely fast and cheap deliveries, costs are going to rise even more sharply for parcel carriers. Something will have to give if those carriers are going to stay financially viable.

Winning over customers to save on costs

The carrier sector has to fight on two fronts: keeping costs under control and shifting customer mindsets. The former could be achieved through the use of tech tools – the digitisation of the last mile promises to maintain service levels while reducing costs. The latter may be a little trickier to solve, but the answer might actually be hiding in plain sight. Lockers have never really taken off in South Korea. But in a nation where people will head to the nearest store (and that is usually a very nearby store), could there be a PUDO revolution waiting to be ignited?

If carriers can convince online shoppers that they can get the same speed and cost of delivery if they pick up orders from a nearby convenience store instead of having them delivered to their doorstep, that gives them a path forward to reduce the cost of each delivery without massively changing the level of service they offer to consumers. There are recent examples of this happening elsewhere – Amazon in the UK usually requires a minimum basket size to qualify for free delivery (for non-Prime customers), but has recently allowed shoppers free delivery to PUDO locations on items below this threshold. In Poland, the national post recently partnered with beauty retailer Hebe to offer rapid 24-hour delivery to collection points. Harmonising the convenience of both online and offline shopping has serious potential, and parcel carriers in South Korea might soon need to harness the idea.

To find out how Doddle can help you deliver cost-effectively in the last mile, get in touch today.