The Retailer Winter Edition 2023

THE RE TA I L ER

40

PARCEL DELIVERY: A MODERN-DAY MIRACLE?

Elliott Goldstein Managing Partner The MBS Group

E xploring the evolving role of parcel delivery compa nies in the retail sector Approximately 4.2 billion parcelswere delivered in the UK last year. That’s 80.2 million parcels perweek, or 11.4 million per day. If mymaths is correct, that equates to 132 parcels delivered each and every second! Whichever way you look at the numbers, this is a huge volume of complex deliveries –with themajority of parcels delivered on time and undamaged. In the past few decades, the parcels deliv ery market has grown at a rapid rate. Since 2014 –when 1.7 billion parcels were sent – the industry has ballooned by more than 140%, and according to McKinsey, the ratio of let ters-to-parcels is expected to shift from 13:1 in 2005 to 1:1 by 2025. But how did we get here? In my mind, there have been three major turning points. First, thewidespread adoption of ecommerce, which transformed the way consumers shop and heralded a new era for global logistics.

Second, the introduction of Amazon Prime. Launched in 2005, the tech giant’s signature membership programme offered customers unlimited two-day shipping on more than one million items, raising the bar for what custom ers expect from ecommerce. Now, businesses which can’t deliver the next day, or at least in the same week, are considered unresponsive and slow to most customers. Third is, of course, the pandemic. Covid-19 increased immediate demand for parcel deliv ery: according to US technology company Pitney Bowes, the number of global deliveries exceeded 131 billion in 2020 – a 27% increase from 2019. While the volume of packages has since receded, lockdowns did have a long-term impact on the deliveries landscape, giving rise to new concepts and permanently changing consumer behaviour. Before the pandemic, for example, only 16% of people over 65 used delivery services on aweekly basis. Fast forward to today, andmore than two-fifths of this group send or receive deliveries each week.

Today, seven big players – Royal Mail, Evri, DPD Group, Parcel Force, DHL, Yodel and UPS – are responsible for the vast majority all UK deliver ies, with Royal Mail still commanding more than half of market share. For these organisations, success means driving growth and maximising efficiencywithout losing sight of the customer. Indeed, today’s customers definitely have high expectations of parcel delivery compa nies. They demand a choice of methods to send and receive parcels; flexibility on dates and times; complete oversight of their parcel’s progress; and for their packages to be delivered at rapid speed.

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For parcel delivery com panies, success means driving growth and maximising efficiency without losing sight of the customer.”