Parcel Delivery - Dr. Henrik Ballebye Okholm Ninth bi-annual Postal - - PowerPoint PPT Presentation
E-commerce and Parcel Delivery - Dr. Henrik Ballebye Okholm Ninth bi-annual Postal Economics Conference, Toulouse 1st April 2016 E-commerce and Parcel Delivery Agenda Policy context E-commerce development Consumer demand Parcel
Ninth bi-annual Postal Economics Conference, Toulouse 1st April 2016
E-commerce and Parcel Delivery 2
Agenda
E-commerce and Parcel Delivery 3
Agenda
E-commerce and Parcel Delivery
Why political interest?
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Internal Market
Policy context
E-commerce and Parcel Delivery
An evolving policy debate
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Policy context Promote cross-border e-commerce within the EU
“Cross-border parcel delivery is an important factor in e-shoppers’ and e-retailers’ decisions to buy/sell
”Why does it cost €27
to send a parcel from Copenhagen to Malmö, but €42 to send an identical parcel the
Since 2012 Launch measures to improve price transparency and regulatory oversight
May 2015 No price regulation for now, but enhanced transparency and monitoring of price data
Dec 2015
”The big differences between prices for cross-border parcel delivery between various EU countries just do not make sense.”
2011 FTI study on cross-border parcel prices
E-commerce and Parcel Delivery 6
Agenda
E-commerce and Parcel Delivery
E-commerce landscape is highly dynamic with large cross-country differences in e-commerce development
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2008-2014 E-commerce development
E-commerce and Parcel Delivery
BUT assessing the true level of cross-border transactions is a challenge
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E-commerce development
Erroneous consumer perception Cross-border purchase ≠ Cross-border delivery
E-commerce and Parcel Delivery
What is cross-border e-commerce?
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E-commerce development
E-commerce and Parcel Delivery 10
E-commerce development
Source: CIVIC
Large differences in the number of online buyers per country
E-commerce and Parcel Delivery
Many drivers of cross-border e-commerce
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E-commerce development
Drivers Demand side factors Supply side factors Experience/ Trust
consumer rights
Regulation
Geographic/ Cultural
Technological development
Operational
Closely interlinked/ overlapping
E-commerce and Parcel Delivery
The European e-commerce landscape is highly dynamic, and the development of e-commerce is influenced by many factors.
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E-commerce and Parcel Delivery 13
Agenda
E-commerce and Parcel Delivery
Choice
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Consumer demand
E-commerce and Parcel Delivery
Cheap, fast and convenient
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Consumer demand
28 28 15 11 18 Other Flexibility of delivery time (e.g. Scheduled) Alternative delivery destination (e.g. parcel locker) Price of delivery Speed of delivery (e.g. same-day)
What is most important for you?
Note: Included countries are Austria, Belgium, Denmark, Finland, France, Germany, Netherlands, Norway, Sweden, Switzerland, UK. Source: McKinsey & Company
E-commerce and Parcel Delivery
Choice: Cheap, traceable, time certain
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Consumer demand
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Express delivery Next day delivery Delivery within 2-4 days Delivery at agreed time slot Evening delivery Saturday delivery Delivery to the home adress Delivery to work adress Delivery to post office Delivery to relay point (shop) Delivery to parcel kiosk (automated locker) Track'n'Trace Electronic notification of delivery (e-mail or SMS) Insurance related to delivery Cash on delivery Free delivery Standard delivery Faster but more expensive delivery than standard delivery More convenient but more expensive delivery than standard… Take return parcel to a post office/collection point Organise a specific pick up with the delivery operator Track'n'trace of return parcel Return product immediately at the moment of delivery Time of delivery Point of delivery Value added Price Returns
E-commerce and Parcel Delivery
Control
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access to important delivery services with their latest online purchase
Consumer demand
E-commerce and Parcel Delivery
Dynamic e-commerce spills over into the delivery sector
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Consumer demand Alternative delivery locations Track & trace Predictable delivery E-retailer diversity
Industry specific solutions SME offers E-commerce value chain Interactive delivery Parcel lockers/ PUDOs Real-time tracking
E-commerce and Parcel Delivery
User-driven innovations
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Innovation in various aspects
Delivery aspect E-shopper demands Market response Examples Time and speed More predictable parcel delivery New tracking features for better predicting parcel delivery times DPD predict interactive delivery service GLS Flexdelivery Delivery point 25% of consumers prefer delivery to alternative delivery locations Roll-out of alternative points to home delivery Parcel lockers and parcel shops Value added features and return options Track and trace and electronic notifications are important Development of real-time tracking and mobile returns DHL real-time eTracking
Consumer demand
E-commerce and Parcel Delivery
Innovation promoting convenience
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Consumer demand
Four Steps
wherever it is (in Gothenburg)
access to the car trunk
cooling and freezing 24hours
Cooperation between e-retailer Mat.se, Volvo and PostNord
E-commerce and Parcel Delivery
Consumers want choice and control. The dynamic nature of the e-commerce sector has a positive spillover into the delivery sector.
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E-commerce and Parcel Delivery 22
Agenda
E-commerce and Parcel Delivery
Delivery decisions by e-retailers play a pivotal role in consumers’ delivery choices and prices
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Parcel delivery
Variety of delivery options
Delivery operator Consumer E-retailer
E-commerce and Parcel Delivery
E-retailers of all sizes are well-aware of alternative delivery operators for cross-border delivery
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Parcel delivery
GLS
Bring DB Schenker
Local couriers Relais colis Colis privé Amazon Uber Ebay bpost
Posta Slovenije
NRA awareness E-retailer awareness
E-commerce and Parcel Delivery
Who are the main players?
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Parcel delivery Global Regional National postal
E-commerce and Parcel Delivery
Direct injection
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E-shoppers buys product Product shipped from warehouse Product transported cross-border Parcel injected in postal network as domestic parcel Parcel delivered to e-shopper Parcel delivery
E-commerce and Parcel Delivery
E-retailers have ample choice in delivery
routes
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E-commerce and Parcel Delivery 28
Agenda
E-commerce and Parcel Delivery
DG Growth: “You’re shopping online. You’ve found the perfect gift. You're at the checkout, and then… Delivery charges are how much? Forget it!”
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E-commerce and Parcel Delivery
Delivery decisions by e-retailers play a pivotal role in consumers’ delivery choices and prices
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Pricing
method
Variety of delivery options
Many pricing options
Delivery operator Consumer E-retailer
the e-retailer
customer needs Commercial decision based on cost & demand factors
E-commerce and Parcel Delivery
Mystery shopping experiment design
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Pricing
How much does the price charged by the delivery
delivery influence the price charged by the e-retailer towards the e-shopper?
E-commerce and Parcel Delivery
Low correlation between prices charged by e-retailers and the public list prices
Pricing
correlation coefficient
5 10 15 20 25 30 35 40 45 50 10 20 30 40 50
E-retailer price, € Public list price, €
E-commerce and Parcel Delivery
Prices for cross-border parcel delivery paid by e-shoppers generally do not reflect the prices charged by delivery operators, due to the decisions of e-retailers
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E-commerce and Parcel Delivery
Delivery prices are determined by a multitude of different cost factors
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services
retailer
risks, and traffic congestion …) Pricing
E-commerce and Parcel Delivery
Delivery pricing is a commercial decision
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Pricing
Uniform pricing Market-based pricing
For simplicity reasons
large fixed/ common costs
depends on various factors
Missing link between cross-border prices and cost levels in destination countries Public list prices seldom apply
E-commerce and Parcel Delivery
Why is the price of sending a parcel 132 km from Cologne (DE) to Liége (BE) almost three times more expensive than sending an identical parcel 579 km from Cologne (DE) to Berlin (DE)?
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Look at the right kind of distance and other factors Pricing
E-commerce and Parcel Delivery
Why is the price of sending a parcel 132 km from Cologne (DE) to Liége (BE) almost three times more expensive than sending an identical parcel 579 km from Cologne (DE) to Berlin (DE)?
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Look at the right kind of distance and other factors
345km Average cross-border distance Average domestic distance
Pricing
E-commerce and Parcel Delivery
Why is the price of sending a parcel 132 km from Cologne (DE) to Liége (BE) almost three times more expensive than sending an identical parcel 579 km from Cologne (DE) to Berlin (DE)?
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Look at the right kind of distance and other factors
Cologne Liège Brussels Riga
E-commerce and Parcel Delivery
As in any other sector, pricing is a commercial decision in the delivery sector, driven by a number of cost- and demand factors, such as willingness to pay and volume flows
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E-commerce and Parcel Delivery 40
Agenda
E-commerce and Parcel Delivery
Conclusion
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European e-commerce landscape is highly dynamic and has a positive spillover into the delivery sector. E-retailers have ample choice in delivery operators, delivery modes and delivery routes. Prices for cross-border parcel delivery paid by e-shoppers generally do not reflect the prices charged by delivery
As in any other sector, pricing is a commercial decision in the delivery sector, driven by a number of cost- and demand factors, such as willingness to pay and volume flows.