Geopost, DHL focus on dense European out-of-home delivery networks

Both Geopost and DHL are focusing on building up dense out-of-home parcel delivery networks close to customers across Europe for commercial, operational and sustainability benefits, senior executives made clear at DELIVER Europe in Amsterdam last week.

The French-based and German-owned parcel operators have each invested significantly in expanding their networks of parcel shops and parcel lockers in Europe in recent years. Geopost’s European OOH network now encompasses 110,000 Pickup points, comprising about 87,000 parcel shops and nearly 23,000 lockers (as of end-April 2024). For its part, DHL (including both DHL eCommerce and DHL Parcel Germany) now has about 140,000 parcel drop-off and collection points across Europe.

These two networks are significantly larger than that of Polish OOH specialist InPost, which had nearly 70,000 points (37,700 lockers and 31,676 PUDO points) as of end-March 2024. Among other parcel carriers, GLS has built up its OOH network to more than 54,000 locations (about 47,000 parcel shops and 7,400 lockers), while B2B-focused UPS and FedEx offer significantly fewer consumer delivery pick-up points in Europe.

Win-win-win model

Hervé Crochet, Geopost’s head of sales, stressed in a company workshop at DELIVER Europe that out-of-home solutions offer benefits for shippers, PUDO operators and consumers. For example, SMEs whose volumes are too low for a courier pick-up can drop off parcels at a parcel shop and benefit from a lower shipping price (a “price differentiation”), he pointed out.

Moreover, the PUDO model supports local shops by offering parcel shop operators additional footfall and cross-selling opportunities, while shoppers benefit from convenient collection points. According to Geopost’s latest research, 44% of European e-shoppers now prefer OOH delivery over home delivery, while 51% use more than one delivery option.

Density first

Wouter van Keulen, head of international development for the group’s Pickup network, stressed the importance of creating a dense network of locations, at most about a 5-10 minute walk away from customers. “It’s not about size but about density, about being close to customers,” he underlined.

A dense network with PUDOs or lockers within a short walking distance also supported sustainability, van Keulen pointed out. “To be sustainable the network has to be dense. Otherwise, people will drive to the collection point,” he explained.

This improved accessibility generated further growth in OOH volumes as customers switched to a locker or parcel shop delivery, which in turn resulted in higher volumes per stop compared to a home delivery.

Managing PUDO volumes

The Pickup manager also stressed the importance of managing volume flows to parcel shops, which typically could handle about 20-40 parcels a day without impacting on their core business.

“If there are bigger volumes in an area, then we add another PUDO,” he said. In areas with a significant number of SMEs dropping off parcels, then Pickup was avoiding “overwhelming the parcel shops” and creating capacity by adding up ‘super-PUDOs’ with longer opening hours.

He noted that about 55% of parcels in parcel shops are collected on the day of arrival compared to about 70% from parcel lockers.

DHL survey results

Meanwhile, DHL eCommerce is seeing similar trends in terms of consumer preferences for deliveries in general and out-of-home deliveries in particular, two executives told a separate company workshop at the event in Amsterdam.

Citing figures from the company’s forthcoming ‘e-Commerce Trends Report – Beyond the cart’, Alexander Schmitz-Huebsch, DHL eCommerce’s SVP Global Marketing and Commercial, said that delivery is the most important purchase decision factor for shoppers.

In DHL’s survey, 65% of respondents said it is important to know who the delivery provider is and as many as 39% would not buy a product because of the delivery provider. In addition, 48% will abandon the shopping cart if there is a lack of delivery options.

Delivery diversity

The survey results also showed that OOH delivery options are generally becoming more popular across Europe but with widely varying figures for delivery preferences between parcel shops and parcel lockers.

Parcel shops at convenience stores are very popular in the Czech Republic (32%), Sweden (28%) and France (22%). Lockers dominate in Poland (64%) and are also very popular in the Czech Republic (33%) and Sweden (26%).

In contrast, both OOH delivery forms remain a very low delivery preference (less than 10-15%) in the UK, Germany, the Netherlands and Italy, according to the DHL survey results.

Network expansion

Outlining the group’s OOH strategy in Europe, Schmitz-Huebsch said DHL now has 140,000 parcel points “with one standard and lots of partners”, offering deliveries to and from these access points.

Last autumn, DHL eCommerce announced it had reached the figure of 100,000 access points in Europe, with about 80,000 service points (parcel shops) and 20,000 lockers. Geographically, the network is being built up in Poland, Czech Republic and Italy in particular at present.

In parallel, DHL Parcel Germany operates a network of about 24,000 out-of-home delivery points, including more than 13,500 Packstations and about 10,400 parcel shops.

Cross-border hurdles

The DHL ‘Beyond the cart’ survey also showed that most (56%) shoppers buy online from foreign retailers but big hurdles remain to stronger growth, including fear of fraud, long delivery times, and customs charges.

Stuart Hill, the new CEO of DHL eCommerce UK, described customs charges as a “big hurdle” for shoppers as they often came as a surprise. “There is a massive opportunity for DHL to help retailers in this area,” he commented.