Spring 2007

As home shopping volumes continue to soar, solutions to failed deliveries could attract more interest. Some familiar suppliers are still out there in the market, and various newcomers are also vying for attention. Peter Rowlands wonders if their time has finally arrived.

Back in the year 2000, when the dotcom boom was still at its height and home shopping was poised for massive growth, it was already clear that final delivery could become a problem. If consumers wanted to order online but couldn't be sure they would be at home to take receipt of their goods, what were they to do?

In response, the high-tech sector quickly came forward with a range of solutions - delivery boxes at the front door, drop-off points in shops, banks of lock-up boxes in public places, access systems for your porch or shed. It looked as though a whole new market sector was about to open up, smoothing the product flow between retailer, carrier and recipient.

Seven years later, we're still waiting for this market to achieve critical mass. Reliable statistics are hard to come by, but on the basis of anecdotal evidence it appears that few consumers even know that unattended delivery solutions exist, let alone try to buy and use them. Nor do a lot of retailers - arguably with less excuse. No wonder adoption has been slow.

Nick Swift, whose ParcelEater company sells a range of unattended delivery boxes, puts his finger on one of the key problems. 'Even if consumers actually work out that there might be a solution for them out there somewhere, what do they type into Google? Do they put 'secure post box' or 'one-way delivery box'? There's no generic term for what we offer.' And this, he maintains, means there's no rallying point for the market.

Hugo Rose, who runs the MyParcel drop-off service, makes a similar point. 'These products are pretty much invisible, so consumers simply don't seek them out. There's nothing specific for them to search for.' He tentatively suggests the term 'parcel minder', but admits it's not ideal, and would have to become established before anyone would search for it in the first place.

Some suppliers have tried to invent their own terms. Electrolux, for instance, adopted the acronym PUDO when it was trying to get a refrigerated drop-box concept off the ground in 2001. It stands for 'pick-up and drop-off' system, and is sometimes still used now. But it's an ugly term for a product that already gets accused in some quarters of looking like a dustbin, and perhaps unlikely to promote positive thoughts about the benefits.

To be fair, the brand name BearBox was quickly adopted as almost a generic description for delivery boxes outside the front door - a status it retains today. But crucially, it only achieved this pre-eminence among people who knew about it. And they were (and are) thin on the ground in terms of the general population.

What is remarkable, considering the struggle for recognition by the suppliers, is that any of the original companies are still in business. Alongside BearBox and ParcelEater, survivors include ByBox, arguably the byword for box banks, and Giraffe Marketing, maker of the Hippo Box. Either they have knuckled down and tenaciously plugged away at their market, or in the case of BearBox and ByBox, they have kept going by expanding into business-to-business activities such as overnight parts delivery.

Others haven't been so lucky. CollectPoint, the drop-off system using convenience stores and garage forecourts, pulled out of the consumer market two years ago, and Beck & Call, the local London-based redelivery specialist, simply closed down for want of sufficient traffic volumes. Many others also fell by the wayside (remember PickupWorks, E-stop, Urbandrop?).

However, if all this sounds like doom and gloom, there are some success stories to report as well. One that is perhaps so obvious that it's easy to ignore is Royal Mail's Local Collect service, under which consignments can be redirected to a local post office, either at the point of ordering or following a failed delivery.

This system is now well established, and its only real downside is that fact that it can be used only by Royal Mail and Parcelforce Worldwide. Yes, between them they handle the lion's share of UK home deliveries, but it's often the bulkier items handled by independent carriers that cause greater delivery problems.

Paradoxically, threats of closure faced by some rural and suburban post offices under UK Government cut-backs could partially address that problem. TNT Express has already suggested a plan under which some could reappear as multi-carrier agents, and now Mail Boxes Etc has put up a formal franchising scheme for them under the Postmasternet banner (News Update, page 8). In both scenarios, there would be a role for them as parcels drop-off points.

Meanwhile, Belgian-based drop-off point specialist Kiala is now active in Britain's North West, where it has won a useful pilot contract to handle returns for retailer Next. A service for outbound deliveries is due to follow, and nationwide coverage is firmly on the agenda. Its system combines some of the features of Collectpoint (use of convenience stores) and Urbandrop (consolidation and delivery services), and it has already built up a substantial presence on the Continent.

Another recent entrant to the drop-point market is MyParcel, which uses SafeStore self-storage facilities as its collection points. So far its network is still limited to five locations in London, but founder Hugo Rose told us he is poised to go live at 25 further locations. 'We've done all the staff training,' he says. 'It's just a question of timing the launch right.'

A newcomer in the drop-box market, Parcel Safe, has made rapid inroads into that particular sector. In little over a year it has got over 2,500 units out into the hands of consumers, which in this business is fast work. When we contacted founder Eddie Riby, he was awaiting confirmation of an order from a DIY retail giant that would more than double that figure at a stroke.

Significantly, perhaps, an emphasis among early drop-box suppliers on electronic wizardry and email alerting has all but disappeared in the surviving box systems, which nearly all put simplicity to the fore. None requires retailer or carrier integration, though Hippo Boxes can be equipped with a fixed barcode that a driver can scan as a kind of partial proof of delivery.

Tough steel boxes have generally supplanted the early plastics models, although a contender from America takes a different approach. The Package Park system from Maita Products is like a reinforced satchel that attaches to a door or similar location. It doesn't set out to be resistant to determined attack, but is tough enough to withstand the weather and discourage casual interference - which could make it an appealing prospect for apartment blocks and 'safe' neighbourhoods.

The latest version is tougher than the prototypes, being made of robust canvas rather than nylon, and has longer brackets for attaching to doors more conveniently. Rubber liners have also been added to protect the door where the brackets hook over it. The company is looking for UK-based agents or representatives, so if you're interested, let us know and we'll pass your comments on. Meanwhile, box-bank solutions could still have their day. We understand ByBox has some exciting plans for a return to the business-to-consumer drop-off market. This was the company's original target when it launched its system at the turn of the decade, and founder Stuart Miller still expresses disappointment at not being short-listed for supplying equipment for the drop-off service that Deutsche Post now operates in various German towns and cities.

A ByBox consumer drop-off network has since been implemented successfully in Jersey, and we understand similar developments could be in the pipeline further afield. The UK solution would take the concept to a new level, but we can't reveal more until the company is ready to go public with it.

Business Direct, which offers a broadly similar box-bank product called ParcelXchange, is also thought to be reviewing options for launching a consumer service. There has been talk of using the B2B box banks it has already installed outside supermarkets, which would have the appeal of offering ready-made car parking and a clean, secure retail environment that is already visited regularly by thousands of consumers. No recent pronouncements have been made on this, but it would be a logical development, especially if the market as a whole builds up more critical mass. But one possible bugbear is the growing interest among supermarket giants in selling non-food products themselves. Allowing pickup points for other suppliers on their own premises could represent a conflict of interest for them.

A further option for consumers is controlled access to their own premises - simpler than box systems and more convenient than a visit to a collection point. A past initiative by Home Delivery Access found trial users keen, but failed to build up an adequate head of steam. Now there is a new option in the form of Ahome4it, which was launched this winter after many years of gestation. It's a form of keysafe, to which access is controlled by a constantly changing PIN code. The delivery driver has to obtain the current code by text message from a control centre in order to extract the key and open the door. Managing director Andy Holding says feedback from trial users has been encouraging, but admits it has been hard to get the system out into the wider market. Once again, he blames lack of consumer awareness for this.

BearBox, too, offers an access control system, the BearLock, which in this case actually controls the lock to which it is connected. But director John Hale points out that this is not an easy sell either. 'Every garage access is different. It's hard to offer a generic solution.' But BearLock has found a useful market in access for unattended B2B deliveries - for instance in the parts delivery market. Most of these suppliers seem to see consumers as their primary sales target, rather than retailers or carriers. As Charles Gallichan of Giraffe Marketing points out: 'It's incredibly hard to get retail marketing directors to take this issue seriously. They just say 'We use couriers for delivery,' as if it relieves them of responsibility for it. There's an extraordinary lack of recognition that delivery is an element of customer service.'

Carriers for their part usually tend to insist that they are simply following the directives of their retail clients - who of course tend to make low delivery charges their priority, and therefore resist last-mile initiatives if they might involve a cost.

The net result of all this is that early attempts by unattended delivery specialists to engage carriers and retailers largely fell by the wayside, and they are tending instead to direct their efforts at consumers themselves.#

This impetus, however, is often thwarted by the difficulty of reaching them. Opinions vary on the best way to achieve this; Giraffe's Hippo Box and Dormouse Box, for instance, are sold from the company's own web site; likewise the ParcelEater range. 'Dealers don't leave much margin for the supplier,' says Giraffe's Charles Gallichan, 'and I would only sell through a third party at the right rate.'

Newcomer Parcel Safe, however, has gone down the dealership route - apparently to good effect. The product is available through around twenty online retailers, and also in some bricks and mortar stores. It is even listed on Amazon.co.uk. The one place you can't buy it is from Parcel Safe's own web site. 'Dealers don't like it if you sell direct in competition with them,' Eddie Riby says, 'and I see no reason to upset them.'

Riby already sources his pressed steel system in the Far East. 'It's not a cheap item,' he says, but adds that he does at least get keen pricing this way. The ParcelEater system, by contrast, is made in the UK, where soaring steel prices have made life harder for Nick Swift, who says he is researching a plastics alternative. 'But it might be tricky making it as strong.'

Interestingly, a brief scan of some of the web sites selling Riby's Parcel Safe - notably those offering post boxes and similar items - shows that there are in fact various other systems out there in the market offering similar features to the Parcel Safe, Hippo Box and ParcelEater. Their problem is price; nearly all other devices capable of receiving a parcel delivery seem to come in at £150 or more, and several cost three or four times that amount. Riby's system is priced at under £50, and he says it became clear early in his research that the ability to set a price below this price threshold was going to be a key to success.

Giraffe's products start at under £100, but Charles Gallichan says price is not such a critical factor, once a consumer is aware of the benefits. However, he readily agrees that products costing three to five times as much would be far harder to sell. The critical question for all these suppliers seems to be how to engage the interest of consumers in the first place. In an ideal world, the systems would be promoted on retail web sites, so that consumers encountered them at the precise moment of placing their order. Hugo Rose of MyParcel is convinced that this is the ultimate solution.

'If you can reach a consignee at the point of need, it's very easy to explain the benefits of a system like this. You can almost see a light bulb coming on as consumers realise the attractions. But if the issue isn't red-hot in their minds, it's much harder to get the point over.' Another way of doing this is to get the system listed in printed catalogues on the page where you place your order. Eddie Riby has had some success at this, and says it works very well. Another approach is placing 'despatch inserts' in home delivery packaging - which on the face of it should hit consumers at a highly receptive moment. Nick Swift of ParcelEater says he has tried this to some effect, 'but overall the results have been disappointing.'

The trouble is that even when these measures work well, they are still doing little more than scratching at the surface of a problem that could be addressed much more effectively by the retailers themselves. But as Hugo Rose points out, it can be frustratingly difficult to get the message through to them. 'Smaller players are sometimes willing to act as guinea pigs, but the big companies immediately ask 'Do you offer national coverage?' Yet if we can't start somewhere we never will. It's a chicken and egg situation.'

Something most retailers are known to shy away from is the need to integrate their web sites with the systems of the unattended solutions providers. However, Hugo Rose doesn't see this as an insurmountable problem. 'We're developing a generic web interface for retailers, using web services as the core technology,' he says. 'It's relatively simple, and shouldn't be a challenge for retailers to adopt.'

But how generic is generic? In an ideal world, such an interface would need to link not just to one unattended delivery solution, but to several - perhaps a box system, a drop-off system and an access system. But whether MyParcel or any other supplier would be prepared to share their technology to the greater good must be open to question, for perfectly sound commercial reasons.

However, so long as the players in this market remain relatively small, it's hard to see how they can muster the clout to convince retailers to pay them the attention they need, and indeed deserve. Collectively, or at least working in larger groupings, perhaps they might.

Andy Holding of Ahome4it comments: 'I'm sometimes tempted to put on a different hat, and present myself as a kind of impartial representative for the entire unattended home delivery market. There really does seem to be a need for someone in that role to bring all the players together, not just in terms of technological integration, but also in promoting a wider awareness of the opportunities they offer retailers and the market as whole.'

It might not come to that. If either his firm or one of the bigger players - Kiala or ByBox, perhaps - finally gains real momentum for its system, the market might find its own level, and start to move toward the elusive tipping point that will take the concept into the retail mainstream. For many consumers and the more enlightened retailers, it won't be a moment too soon.

If you didn't think you needed delivery solutions, read this!

Worrying about unattended and deferred home delivery solutions might seem like tinkering at the margins of the retail cost spectrum - not something worthy of much attention in the greater scheme of things.

Evidence suggests otherwise. In a landmark survey of the delivery business, IMRG (Interactive Media in Retail Group) worked out that in 2006, around £682 million of direct costs were probably attributable as to what it terms 'largely avoidable home delivery inefficiencies and failures'.

The organisation equates that figure to a £1.26 'inefficiency cost' that had to imposed on every internet shopping shipment.

On top of that, consumers themselves are inconvenienced by delivery problems. IMRG has worked out that in the same year 2,466 man-years of consumers' time were probably wasted through home delivery failures. How do you value this? At a reasonable £12 per hour, IMRG says the total came to £259 million; and that takes no account of the adverse consumer relations caused by all the hassle.

If you don't think this matters, consider a survey by WhereIsMyDelivery, which suggests that 62 per cent of consumers will decide not to purchase a product if convenient delivery arrangements can't be made. And according to research at Heriot-Watt University, 58 per cent of home shoppers say there is normally no one at home during the day to receive a delivery.

There's a lot more detail in an IMRG white paper on this subject. For instance, it reckons that 12 per cent of all e-retail home deliveries will be first-time delivery failures, and half of the seven million complaint calls to etailers are delivery-related.

After adding up all the direct and indirect costs of delivery failures, IMRG reaches a grand total of £2 billion wasted every year. And as home shopping volumes increase, so will that figure - unless effective measures are taken to reduce it.#

You can download a PDF of the IMRG report, Valuing Home Delivery Report - Cost Benefit Analysis, from its web site, www.imrg.org.

Text alerting - stemming the problem at source?

Failed home deliveries could be reduced radically if consignors kept recipients better informed about when the goods were due to arrive. That's the argument put by companies offering text messaging services.

WIN plc, one of those offering this kind of text messaging, points out that over 90 per cent of the adult population carry a mobile phone. It calculates that even a ten per cent reduction in failed deliveries would save the direct shopping market £80 million a year at 2005 sale volumes, or £200 million by 2010.

Essentially, such a service integrates with the retailer's and/or carrier's systems, picking up cues to transmit delivery alerts to consumers at the appropriate time. The alerts can be as intelligent as the retailer chooses; the more complete the tracking information behind them, the more precise the estimated delivery date and time will be.

IMIN, another system, was trialled last year by Parcelforce Worldwide and Screwfix Direct. Managing director Roger Murphy says the results were highly encouraging - particularly the feedback from Screwfix customers, who were reportedly 'overwhelmingly in favour of the pre-delivery text'.

Frustratingly, these trials have not so far led to large-scale adoption, and Murphy told us he has found it difficult to convince other retailers to try his system. 'They can usually see the attractions, but often they seem to have other higher priorities.'

Case study: Helping shoppers to help themselves

Why don't more online retailers actually sell drop-boxes or other unattended delivery solutions on their own web sites? One that does is organic produce supplier Abel & Cole of Wimbledon. The offer doesn't exactly leap out at you, but if you go to 'Help' and then 'How do your deliveries work?', the company recommends the Hippo Box to people who can't think of a secure place where the food boxes can be left.

Hippo Box supplier Giraffe Marketing offers Abel & Cole a £10 commission on each sale, and Abel & Cole obligingly passes this on to consumers. It sounds a win-win arrangement, and Giraffe founder Charles Gallichan says his company is now getting a modest but steady flow of orders through the site.

'The company is happy to leave consignments without obtaining a signature,' he points out, 'and that obviously helps. We've even provided a box for Abel & Cole's own canteen, so that drivers themselves can see the benefits.'

Where to find them

For an overview of established UK unattended and deferred home delivery solutions, go to Fulfilment & e.logistics' own special web site, Delivery Resource Centre, which is offered in association with IMRG.

Here you can select features you're looking for (box systems, for instance, or email alerting), and see a list of those suppliers matching your requirements. Or you can select an individual supplier and see which feature it offers.

The facility is a subset of our popular Fulfilment Guide Online, which in turn displays most of the companies you'll find listed in this year's printed guide (bound into the current issue of the magazine).

Go to www.fulfilmentguide.com/imrg, and click 'Unattended delivery'.