Viewpoint – Logistics escaping its volume trap

Retail Insider and K3 Retail bring you a monthly column taking a look at some of the most pertinent and interesting topics of the day in the big wide world of retail.

Logistics escaping its volume trap

Logistics is so much about volumes – as City Link knows all too well. Yet many firms will try to suggest otherwise and attempt to put forward the argument that they are adding a whole lot more value to the equation. Some to their credit are doing innovative things, but many sadly are not.

The majority of retailers undoubtedly still see logistics as boiling down to paying specialist firms the cheapest price per unit and the more items they have delivered the better the deal. It’s all about shifting units.

But it doesn’t have to be. Certainly the consumer would prefer it if this wasn’t the case and there seems to be an increasing number of them willing to pay a premium for an experience that is somewhat removed from the typical – that feels rather like a game of pass-the-parcel.

It seems the prize goes to the organisation that holds onto the parcel for the least amount of time, regardless of the level of service that this ultimately delivers to the customer.

As new entrants and new models emerge in the logistics market we are starting to see some less volume-driven players appear that are focused more on high service levels. As far away from the norm as you’re likely to find is Urban Bundles.

This start-up does not have the objective of taking over the world – delivering all the retail industry’s parcels. Instead it is wholly focused on providing a top quality delivery service for a small number of clients.

At the moment it has three vans, a scooter and a cargo bike delivering goods around London for upmarket retailers. These have included Thomas Pink, Mr Porter and Aquascutum. The vans are branded under the retailers’ name, the packaging is top notch ribbons and all, and the drivers can act as human mannequins dressed in the client’s wears.

The grand plan is to have no more than four clients utilising 10 vans – with maybe 20 deliveries made per day by each van. This stacks up financially when the customer is charged £15 for their delivery.

Lucy Major, co-founder of Urban Bundles, says: “Yes, it’s logistics but it’s also everything else too. It’s about quality not quantity.” These sorts of services are a radical departure from the typical logistics providers but expect to see more of this sort of small-scale premium operator emerge that smooth the rough edges of the home delivery experience.

Glynn Davis, editor, Retail Insider

K3 Retail deliver multi-channel solutions that enable retailers to create joined up shopping experiences for their customers whether they choose to buy on-line, direct, in-store or via mobile. It has over 20 years’ experience delivering award winning solutions, to more than 175 internationally recognised retail brands.