Hermes plans to introduce more flexible delivery options in Germany to reduce the number ofcostly failed delivery attempts and to compete better with market leader DHL after weaker financial
results last year.The last mile to the customer’s door step is decisive for the success of parcel operators,Hermes Europe CEO Hanjo Schneider told German business newspaper Handelsblatt. Volumes are growingthrough online shopping but failed home delivery attempts push up parcel companies’ operatingcosts.
Schneider, also responsible for the Service division on the board of parent company Otto Group,said: “Our aim is, together with consumers, to find a way so they get their parcel when and wherethey want it.”
Germany’s second-largest B2C parcels delivery company wants to offer more individual options,including a two-hour delivery timeslot and evening deliveries. The enhanced delivery service couldgenerate an increase in revenues of around 25%, according to German media reports.
A Hermes Germany spokeswoman told CEP-Research: “It is true that Hermes will start first trialtests of tailor-made deliveries in metropolitan areas in 2014. The pilot service will offercustomers, for example, a two-hour delivery window maximum during which they will receive theirparcel. The basis of this service is a personal data profile which stores the information aboutwhen, where and how a recipient can be reached.”
She stressed that this way consumers can better define when and where they want a shipment to bedelivered with the possibility of a short-term re-routing, for example, to an alternative addressduring a holiday. Until its implementation, the company wants to optimise processes and adjust itsinformation technology.
In the financial year ending March 2012, the Otto Service division, covering the Hermescompanies and a small travel agency business, increased revenues by 9% to €1,030 million, with theHermes logistics companies increasing sales by 10.4% to €915.2 million.
But the Service division saw its operating profits slump to €53.6 million from €97.8 million theprevious year, pushing the profit margin down from 10.4% to 5.2%. The key factors were higheroperating and staff costs that outweighed the positive revenue effects, the Otto Group annualreport stated. No profit figure for the Hermes logistics companies was disclosed.
