Delivery has failed to keep up with the rapid progress of e-commerce, creating opportunities forcompanies offering innovative, rapid and reliable parcels services, according to British start-up
courier aggregator Shutl.Founder and CEO Tom Allason told last week’s ‘The Future of UK Postal Services’ conference: “E-commerce has come light years since 1994, but delivery has not. Shoppers must still wait days fora delivery that occurs at a time that suits the courier companies.”
He said figures in the UK from Which, online retail association IMRG, and Royal Mail,respectively, indicated that UK householders spend an annual average of three working days waitingfor pre-booked deliveries, and that failed deliveries cost e-retail £790 million to £1 billion ayear, while two-thirds of shopping cart abandoners cite delivery as the reason.
“Delivery is the greatest challenge facing e-tailers,” said Allason. He acknowledged that “huband spoke couriers” such as UPS, TNT, FedEx, DPD and UK Mail were the most cost-effective solutionfor deliveries over 10 miles (16 km). “But for distances lower than that, the local couriercompanies are the most effective. What Shutl does is act as an aggregator of these local couriercompanies.”
He said Shutl was, essentially, a technology platform that connected retailers with localsame-day courier companies, combining and coordinating their available capacity through an onlineservice that integrated into retailers’ e-commerce platforms. This allowed retailers to offersame-day delivery at a price comparable to the cost of standard multi-day delivery, and often evencheaper.
“What we have done is solve the two big problems of e-retailers: customers’ desire to haveinstant gratification, convenience and flexibility, but also great value,” Allason claimed. He saidretailers could also choose to subsidise the price of delivery to the consumer. “Argos is justabout to announce that it will offer free delivery within London for sales of more than £50,” hesaid.
Shutl began operating last June, with its biggest customer, retailer Argos, coming online inJanuary this year. Its other two main customers are Laithwaites Wine and fashion retailer Start.Although currently only operating in London, Allason told CEP-Research that the concept should workin other urban areas.
Of the UK’s 820 million annual online retail transactions, Allason estimated around 250 millioncould, potentially, come under the scope of Shutl. “A company like Argos carries something like 30million transactions a year. We would hope that around one third of these would be relevant to usin the long-term,” he said.
