DHL Parcel Germany hopes to beat the recession and a tough B2B market by growing in the B2C segmentthis year thanks to strong e-commerce business, a senior manager told CEP-Research.
The Deutsche Post DHL domestic parcels business is pressing ahead with new products andservices to strengthen its presence in the fast growing e-commerce market, Andrej Busch, head ofmarketing and divisional board member, said in an interview at last week’s Transport Logistic tradefair in Munich.
In the first quarter of 2009, DHL Parcel Germany saw revenues drop 2% to €623 million andvolumes dropped 2.1% to 186 million parcels. In 2008, the business increased revenues by 1% to€2,583 million, and volumes increased by 2.7% to 773 million parcels.
“We have been fairly spared from the crisis. The crisis has not yet reached consumers, andthere is very strong growth in e-commerce,” Busch commented. “As DHL Parcel Germany we believe wewill have slight growth this year. The trend in the first four months makes us more confident thatwe will have slight growth.”
In the B2B parcel market, competition is tough at present and there is strong pressure onprices due to declining volumes in the sector. “We are feeling the reduction in volumes. It’scertainly the area where competition is the strongest,” Busch commented. But DHL wants to avoid a “price war” since this would impact directly on results due to cost levels. In recent years, DHL hasbenefitted from the general downtrading from express to parcel delivery, improved its customerservice and offered better transit times, Busch pointed out. But customers “should not expect thata better service is cheaper,” he commented.
In response to surveys showing that delivery is the second-most important factor for onlinepurchases after the product price, DHL wants to offer consumers more transparency, Busch said. The “ Versandhelfer” (Shipping Assistant) widget tool offers online franking, shipping, tracking &tracing, and pro-active notification of parcel handling at a sorting centre and parcel delivery, aswell as other functions.
In February, DHL launched an online product search machine under the “Meinpaket.de” name forregistered Packstation customers and offering popular products at discount prices from e-tailerswho use DHL for delivery services. More than 30% of Packstation customers have increased theironline spending as a result of the new service, Busch said.
DHL is also adding new services for online retailers, including integrating DHL deliverywithin the “AfterBuy” standard online shopping software programme, and adding parcel deliverynotification by SMS. In future, the company also wants to provide e-fulfilment services for SMEs byoffering full website creation and management services, enabling the retailer to focus purely onproducts and pricing, Busch said.
DHL is still testing evening deliveries for second delivery attempts but Busch noted this isa “very expensive” service to provide and the question is whether customers are ready to pay forit. A decision on evening deliveries will be taken by the end of the year.
The clear growth area is B2C/C2C, where e-commerce business is compensating for the downturnin traditional mail-order deliveries. DHL has focused strongly on this segment in recent years witha range of new products, services and online tools for SMEs and shoppers under its “Simple, Always,Everywhere” marketing slogan. “This year we have decided to continue investing in thePackstations,” Busch pointed out. The nationwide rollout of the parcel collection machines will bemaintained, with about 2,500 due to be in place by the end of the year.
