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Innovations in the postal sector. Episode 7: postmen deliver everything at home

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Here’s already the last episode of our series on innovations in the postal world (you can read previous episodes by following those hyperlinks : episode 1 on 3D printing, episode 2 on insurance services, episode 3 on new way to deliver parcels, episode 4 on the importance of returns in the ecommerce world, episode 5 on the rise of automatic lockers, episode 6 on the digitalization of the postal sector).

Today we explore a very promising trend : delivering goods by the postmen.

New services of delivery by the postmen

According to rumours La Poste may be discussing partnerships with supermarkets and hypermarkets to prepare on the competition of Amazon Fresh. Amazon Fresh is expected to debut in Germany and France (although no precise date has been communicated yet) after having started operating in the US. If you want to read an analysis of Amazon Fresh’ business model, I suggest you read the article by Jean-Marc Megnin (in French)

The principle is simple. Customers would benefit from home deliveries of fresh products ordered online and usually collected from retailers’ internet order pick-up points. La Poste would then compete with “drives”, the segment of supermarkets that is growing the quickest currently. Rumors talk about refrigerated lockers at customer households to deposit orders in the absence of customers (hum … that’s gonna be an expensive option). As with the bpost initiative “bpost sur rendez-vous” / “bpost op afspraak”, La Poste expects to increase revenues and compensate for the drop in postal revenue. Time will tell whether enough revenues (and above all profits) can be generated from such an innovation. The adoption process is indeed very long. In Belgium the same initiative exists already under the project name “Shop & Deliver”. It’s headed by Dirk Oosterlinck, marketing manager of the year in 2012 and currently in test phase in 2 towns. There is no date yet on when the deployment in whole Belgium will be done.

The difficulty with that kind of innovation is definitely the adoption as it requires that customers change their habits. Eventually it’s a chicken and egg situation where consumers don’t feel a need before the product / solution exists. We think postal operators are right to invest in such solution. First of all because the growth of the “drive” segment shows that there is a need on the market and consumers’ behaviors are changing towards a purchase-and-collect solution. Second, because Amazon needs to be fought. Amazon is ready to compete with postal operators and integrators (Fedex, UPS, DHL, TNT, …) on their core business and can easily take the market over. This is a frightening situation but it is the reality. Amazon has now more than 100 fulfillment centers over the world, supply-chain procedures and best-practices in place that are easily up to best-in-class standard. It takes only a decision by Jeff Bezos to declare a war on traditional players and we are not sure that everyone is really getting what’s going on.

Author: Pierre-Nicolas Schwab

Dr. Pierre-Nicolas Schwab is the founder of IntoTheMinds. He specializes in e-commerce, retail and logistics. He is also a research fellow in the marketing department of the Free University of Brussels and acts as a coach for several startups and public organizations. He holds a PhD in Marketing, a MBA in Finance, and a MSc in Chemistry. He can be contacted by email, Linkedin or by phone (+32 486 42 79 42)

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