Pickup points as an alternative way of delivering parcels

Delivery to pickup points is becoming more and more popular with shoppers, yet plenty of e-shops still do not offer this option in their cart.

Why is that? What are the advantages and disadvantages of this alternative? What can you gain by implementing pickup points in your e-shop? How many pickup points do the individual transport companies have in Slovakia? What options does Neoship offer when it comes to ParcelShops? Why is „just offering” pickup points not enough?

Why do some e-shops not offer delivery to pickup points?

Probably the most common answer from e-shop operators to the question of whether their customers would appreciate being able to choose delivery to a pickup point alongside a courier is that customers have never asked for such an option. But is it really true that if a customer does not ask for something, they will not use it?

„How can you know people do not want something if they have not seen it yet?” (Steve Jobs)

According to a survey we recently carried out on Facebook in the group Učíme sa podnikať s eshopom, and also from the experience of our business meetings, we found that e-shops mostly use couriers to deliver parcels, then Slovak Post, and only to a small extent pickup points.

The most common reasons and arguments for not using pickup points were: - „Customers mostly choose a courier anyway, because it is convenient and the courier brings the parcel right to their door.“ - „Delivery to a pickup point takes longer than by courier.“ - „It is not convenient, we have to take the parcels to the drop-off point ourselves (in the case of Zásielkovňa).“

From the statistics in Neoship, and also from information available online, it is clear that around 5 % of all parcels are delivered to pickup points. That is not a high number, but it is not negligible either – and it could be much higher. What might convince you of the benefits of pickup points, and how to motivate shoppers to choose this option more often, we will perhaps convince you of in the lines below.

Advantages and disadvantages of pickup points

Advantages

• your customer does not wait for a courier or queue at the post office

• they can collect the parcel at any time during opening hours (these are often petrol stations, which are open at weekends and until late in the evening)

• flexible collection – the shipment is stored at the pickup point for several days

• with parcel machines the parcel can be collected at any time, because they are available 24 hours a day

• availability – transport companies now have pickup points in every town in Slovakia

• for the e-shop – savings, as on average the price of delivery to a pickup point is around 1 € lower than courier delivery to an address

Disadvantages:

• some pickup points have weight limits for parcel delivery

• additionally implementing pickup points into an e-shop = additional costs

What can you gain by adding pickup points to your delivery options?

As we mentioned above, the first positive is the price of delivery to a pickup point, which is a few cents to a euro lower than courier delivery. You still incur a cost, but a much lower one than with a courier. So if you decide to add delivery to pickup points to your e-shop, you have to expect that implementing them will cost something. The price of such an implementation is roughly around 100 €.

Let us take a concrete example: Consider an e-shop that dispatches 100 shipments a month. Of those, 5 parcels are delivered to pickup points (we based this on the statistics above, so we work with an average of five percent delivered to pickup points). The worst that can happen to you is that you implement pickup points in your e-shop and not one of your customers actually uses the option. You will probably lose 100 €. On the other hand, you can gain a lot from the implementation: - Work out your average margins and you may find that after 10, 20, 30 or 50 purchases delivered to a pickup point your investment in the implementation pays for itself. - By expanding your offering you differentiate yourself from the competition. - Because you gave customers a choice of several delivery options, you gain 5 extra purchases every month. Those 5 purchases can put you in profit you would otherwise not have. - And if just one of those five customers gives someone a positive reference, thanks to their good experience another shopper may choose a pickup point too.

How many pickup points do transport companies have in Slovakia?

There are several companies in Slovakia dealing with parcel transport and therefore with delivery to pickup points. Of all of them, SPS, GLS, DPD and Zásielkovňa have the largest presence on the market, so we focused our attention on those. SPS – has 311 ParcelShops (you can see their network here)

GLS – has 140 ParcelShops and 10 parcel machines (you can see their network here) DPD – has more than 250 PickUp points – their number will probably grow in this period, since DPD bought the transport company Geis Parcel (you can see their network here). Besides the transport companies there is also our dispatch solution Neoship, where in cooperation with the transport company SPS we provide our customers with delivery to ParcelShops as well. Zásielkovňa is a category of its own; it is not a classic carrier but focuses above all on delivery to pickup points, the so-called Z-Points. Zásielkovňa already has more than 700 pickup points in Slovakia. You can find the specific branch for delivering a parcel here.

If you look at these companies' pickup point networks, you will certainly find a pickup point in every larger village or town where a parcel can be delivered. Every transport company is also expanding its pickup point network and looking for new partners in this segment on its website. So besides running an e-shop you can expand your service portfolio, sign a contract with a carrier and become their business partner in the form of a ParcelShop, PickUp point or Z-Point.

What options does Neoship offer when it comes to ParcelShops?

At Neoship we currently work with the transport company Slovak Parcel Service, which means every user can manually create and send a parcel to one of more than 300 ParcelShops.

Besides that, with e-shop solutions such as CreativeShop from CREATIVE sites, and in the open source solutions PrestaShop and WooCommerce, users already have the complete, up-to-date list of ParcelShops implemented as part of the Neoship module, so shoppers can choose directly in the cart where they want the parcel delivered.

The offer alone is no guarantee of success

To achieve success, though, the offer alone is not enough. Presenting it is just as important. If a customer does not know something exists, or does not know the advantages of a given option, there is little chance they will choose it, however great it may be. That is why it is very important to educate customers and inform them about the advantages and possibilities of new services – as should be the case with the benefits of using pickup points.

If you would like to learn more about these advantages, as well as about our quotation, we will be glad if you get in touch.