Deutsche Post DHL today announced plans for 20,000 ‘Parcel Shops’ across Germany to increase itsnetwork of parcel drop-off points to 50,000 locations, fight off competitor efforts to expand their
B2C networks and further extend its market leadership.The company also said it will add 150 more PackStation parcel terminals in Germany and shortlyintroduce pro-active delivery notification messaging to broaden its parcel delivery options forconsumers.
The new DHL Parcel Shops, which will complement the company’s 13,000 post office branches and2,500 Packstation terminals, will compete with Hermes’ 13,000 Parcel Shops in Germany as well aswith the efforts of DPD, GLS and UPS to expand their smaller B2C networks in Europe’s largestparcel market.
“We have never transported as many parcels in our company’s entire history as we did last year,and the growth is just continuing in 2013,” CEO Frank Appel told journalists in Berlin. “Byexpanding our network of DHL parcel shops, we are continuing to systematically focus on the needsof consumers in Germany, becoming even more customer-centric and laying the foundation for evenmore online retailing in Germany.”
DHL Parcel Germany currently has a market share of nearly 41% of the German B2C parcel market,1.5 percentage points more than in 2012, Appel disclosed. “We have won market share and are growingfaster than the market,” he declared. DHL Parcel Germany’s revenues have grown 10.5% a year onaverage since 2009 and are expected to exceed €1 billion this year for the first time.
The new DHL Parcel Shops will offer consumers and SMEs parcel shipping services, includingreturns, but will not initially act as alternative delivery locations for parcels as withcompetitors. They will be located as shop-in-shop services in retail outlets with longer openinghours such as kiosks and newsagents in city centres and other metropolitan areas.
Jürgen Gerdes, head of Deutsche Post’s mail and parcels division, said the parcel shops wouldhelp put DHL “even further ahead of the competition”. He confirmed there might be “competition forthe best locations” between DHL and other firms also aiming to expand their parcel shop networks,adding he would be “happy” if retailers switched to DHL from competitors. He declined to disclosehow much retailers would earn from acting as a DHL parcel shop.
Appel stressed that parcel shop operators would benefit from Deutsche Post DHL’s brand andpopularity. “Those are our assets and we believe we will be more successful than others in thisarea,” he said.
The first 100 DHL Parcel Shops officially opened today in Berlin, 1,000 locations across thecountry are due to open by the end of July, 10,000 by the end of this year and the full 20,000 bythe end of 2014. A large proportion will be achieved by converting the 7,000 existing ‘Point ofSales’ outlets, which mostly sell stamps and other mail products, into Parcel Shops. All 20,000will have exclusive agreements with DHL.
Deutsche Post DHL will only need to invest a ‘single or low double-digit million euro’ sum inthe parcel shops as they do not require expensive technology, Gerdes said. This would change,however, if they were used as alternative delivery points in future as parcel data would need to bescanned and transmitted for tracking and tracing purposes, experts noted.
In parallel, DHL Parcel Germany will add 150 more self-service Packstations this year, giving ita network of 2,650 parcel collection and drop-off machines with 250,000 compartments, mostly inurban areas. Some four million customers are registered to use this network.
Gerdes stressed that the parcel shops complemented the Packstations since the former would beused for sending parcels while the latter are mostly used for receiving parcels. “Customers are sodiverse, so some will use the Packstations and some will use the parcel shops,” he explained. “Wewant customers to have a choice.”
In rural areas, where Deutsche Post delivers letters and parcels through a single deliverynetwork, private customers can already give franked small packages, parcels and returns to thepostman. In addition, DHL is currently testing a secure parcel box with electronic locking fordeliveries to single- and two-family homes in rural areas.
The key driver for DHL’s parcels business is e-commerce, which has grown strongly to onlineretail sales of some €30 billion in Germany and now represents about 10% of the overall retailmarket. This figure could easily double to 20% within the next 10 years, according to the country’se-commerce association.
In response, DHL Parcel Germany is investing €750 million to expand its sorting capacity andspeed up deliveries, and is introducing a broad range of services for recipients, includingflexible pick-up and drop-off options. In July, DHL plans to start offering pro-active deliverynotification messaging with diverse new options for recipients.
“The success of e-commerce will increasingly be decided during the first mile and, above all,during the last mile,” Gerdes stated. “We are already providing parcel recipients with fulltransparency and control over the products they order and offer the most flexible network forparcel shipping in Germany by far.”
Asked about reports that the leading online retailer Amazon is considering setting up its owndelivery service, Appel stressed this referred to other countries where delivery service might notbe so good as in Germany where DHL was providing “excellent service”. He said: “I believe we willcooperate successfully with Amazon like in the past.”
Gerdes added that DHL is not seeing any impact from the ongoing strikes at Amazon in Germany butsuggested that the US retailer might step up automation in future.
