Thursday, April 14, 2011

Free Million Dollar Idea: Package Carriers + B2B = Success

I'll try to keep this post brief or see if I can sketch it out in bullet-points.

My Current Situation

Like many people:
  • I live in an apartment
  • I work during the day
  • I often work different or longer hours than standard business hours (i.e. before 9am and after 6pm)
  • My work often requires my physical presence / prevents me from leaving to get a package

The Beef I Have With Package Carriers

  • They force you to sign for packages.
  • Sometimes, after you sign, they say they still can't deliver.
  • All apartments are considered unsafe by default it seems.
  • Carriers don't trust your authorization to drop the package, even when expressly written and signed.
  • Carriers don't stagger their delivery times (i.e. if they try before 10:30am on Monday, they'll try before then on Tuesday and Wednesday too). This doesn't help pick up a package.

The Business Problem

This isn't necessarily all the carrier's fault; they have things they need to abide by as well.

The business problem, as I see it, involves the following:
  • Carriers have SLAs with their shipping partners (guaranteed dates/times of delivery, etc.). This can be very helpful sometimes (i.e. every package will arrive next day by 10:30). However, if the customer is not available at that time, the SLA can actually hamper delivery.
  • Carriers have a responsibility for goods (so they don't want to leave them in "dangerous" areas)
  • Customers need to pick up packages in a way that works with their schedule

How I Think They Could Fix it

I think that package carriers are missing an important opportunity here -- the ability to partner with other businesses to help customers receive their package.

Let's think about a scenario like this:

  • Customers can specify an intermediary business for delivery. Think national chain businesses that are open outside of 9-5 hours. Lots of restaurants (McDonalds, Subway), box stores (Walmart, Costco, etc.), and grocery stores (Giant, Acme) fall into this category.
  • Customers either could pay a fee to use this intermediary or the carrier could offer it as an option, and could select the intermediary. This is especially of benefit if a customer wants to group purchases, e.g. "I'll pick up my package and get groceries!"
  • Businesses create space for a holding area for packages and accept the responsibility of an intermediate carrier (i.e. responsible for lost/damaged packages, etc.). Businesses will protect this because it's linked to their business reputation and customers chose them for a reason. They have a stake in quality.
  • Carriers drop off a consolidated shipment according to their SLAs.

Benefits to All Parties

Businesses --
  • Businesses receive some cash (either from carriers or from the fee to hold the package there)
  • But more importantly, businesses also receive a chance at customer purchases while they're there. Impulse buys, combining purchasing ideas, etc. For example, if I could pick up a package and my groceries from Whole Foods and not at giant, guess who's getting my grocery dollars.
  • Stronger relationship with a national carrier driving business to the store.

Shippers --
  • Less logistical concerns -- they drop the packages off at businesses, businesses handle from there.
  • Could be a good corporate partnership -- think of a store devoting some space to a UPS kiosk, for example. Branding in visible places.
  • Could actually save money -- less trucks, less driving, less re-delivering packages, less info notice slips, and most importantly, less logistical overhead in returning to sender.
  • Stronger relationship with stores -- customers more likely to choose you if you offer shipment to businesses they frequent.
Customers --
  • Pick up packages when it's convenient to do so.
  • Huge convenience gain; knock errands out in one shot.
  • Know that your package will be delivered (businesses are open + they have an agreement)
  • You're notified when a shipment is delivered, so you know you can pick it up.
  • Knowing the business will be open outside of standard 9-5 business hours; you don't have to be frustrated simply because you have a job, and you don't have to negotiate a break to sit and wait for a package.

What do you think?

So, could this ever work? What would you change about it? Sound off in the comments; I'd love to discuss!

1 comment:

  1. If I (a) live in an area with few local participants or (b) have a busy-city life, I will pair my shipment with a business that I would utilize for primary and secondary purposes.

    For (a): This seems ideal. I will pick up the package and go back to the car before returning to shop.

    For (b): This could be chaotic. Inability to control the flow between the packaging hub and the main store could result in (1) disturbances from packages being in the place of business (theft, litter, etc.) and (2) overcrowding in the package hub (10 customers x 5 bags of groceries = poor conditions). May incur strain with non-primary deliveries in an already dense location.

    If I (c) do not meet those conditions, I will likely use any nearby business outlet as a backup plan as it will not be cost/time-prohibitive.

    For (c): This will likely put a logistical strain on the business. Flow of traffic (parking and in the facility) may make it less desirable for non-package-seeking customers to continue seeking goods at the location. Peak package-seeking hours will likely coincide with peak non-package-seeking hours: I will choose to get my groceries where I am not competing with others for space. To create the conditions to support both-- staffing, facility space, etc.-- would likely result in the service becoming prohibitively expensive. Most package-seekers would likely (i) wait for the package to be delivered on a later delivery run [based on what needs to be delivered and where- the truck may arrive after 10:30 even if they unfortunately hope to get there sooner] or (ii) attempt to arrange another means [have someone else be at home to sign for the package].

    Conclusion: This idea does not seem ideal for (b) or (c), but does seem workable for (a). However, external factors for (a) make the need questionable (with lower population/business density there is a greater chance of deliveries being made without someone available to sign). Need seems greatest in the case of (b)-- as (c) may also resemble (a) with delivery procedures. As such, developing a workable relationship between the primary business and the hub may prove desirable for all parties involved.


Keep it classy, folks.