(Image Source: Post & Parcel)
The outbreak of the COVID-19 pandemic has affected out-of-home (OOH) delivery worldwide. With vaccine rollouts and gradual easing of border restrictions, countries have been revising their regulations to slowly return to ‘normality’. In collaboration with Doddle CCO Mike Richmond, we discussed the impact of consumer behavior changes on OOH delivery before, during, and after COVID-19. We looked specifically at the UK, one of the worst-hit countries during the pandemic onset.
Prior to the Pandemic
Before 2020, there was a noticeable increase in consumer adoption of OOH delivery and returns. As a matter of fact, Amazon established a huge PUDO network in the UK in the same time frame. This was a move that prompted the UK Post Office to begin partnering with carriers other than Royal Mail.
On an international scale, Doddle also partnered with USPS on returns while developing PUDO networks for Yamato, Starlinks and Australia Post. Overall, home delivery was still popular in most markets, with OOH options showing great potential.
During the Pandemic
COVID-19 regulations and lockdowns had a significant impact on the availability of delivery options in 2020. For the bulk of this period, social distancing was encouraged and residents were advised to remain at their homes. This drastic decline in foot traffic led to the closure of many non-essential retail stores.
Needless to say, the demise of physical retail was accompanied by the unprecedented boom in e-commerce. Logistics carriers had to cope with the sudden surge in online sales and frequent changes in safe working practices. Meanwhile, home delivery has become a much more preferred option given that most customers were present at home at the time of delivery. According to a YouGov survey by Doddle, 65% of UK adults spent much more time at home after March 2020. This has been substantiated by our past data which reveals that the first-time delivery success rate in the UK rose from 84% to 95% during its lockdown period as compared to an average of 85% in pre-pandemic 2019.
Due to an increased preference for home delivery coupled with the closure of numerous pickup points, OOH usage has dramatically declined throughout 2020. As a matter of fact, OOH was only used for 4.6% of parcel deliveries last year, thus resulting in the deterioration of home-delivery performance. In our analysis, home deliveries in April 2020 took an average transit time of 2.9 business days as compared to 1.6 business days in 2019.
Fortunately for us, this number decreased to 1.7 in September 2020 after logistics carriers had adjusted to the situation and put in place more effective systems. Meanwhile, the percentage of deliveries to collection points dropped as low as 4.3% when the UK returned to lockdown in early 2021.
Around mid-2020, the UK removed many restrictions and people could start returning to their workplaces. According to a YouGov survey, more than half the adults spent the same or less amount of time at home during this period. Individuals were also becoming more and more open to alternative delivery options, with 79% of the respondents choosing flexibility as their top concern. In the same survey, 45% of the respondents said that they expected to use OOH delivery at some point in the near future —a great improvement considering how 29% of them had never used OOH delivery before.
(Image Source: Doddle)
Interestingly enough, 49% of the respondents were keen to opt for OOH delivery once they were informed of its environmental benefits. Recent research from Sendcloud on sustainability reflected the same trend, with 62% of shoppers indicating their willingness to use this alternative delivery method as long as retailers provided the emissions data at the checkout accordingly.
Pushing Out-Of-Home Delivery to Consumers
As more people shop online and spend less time at home, there is a need for parcel carriers to develop strategies that help tackle the high capacity and high cost of home delivery. OOH delivery fares better in these aspects as it not only reduces the cost of each delivery through consolidation, but also allows for greater efficiency by using shorter routes. The aforementioned research has also highlighted the importance of reminding consumers of OOH delivery benefits, namely sustainability and flexibility, to further encourage the adoption of OOH delivery.
About Mike Richmond
Doddle technology powers out-of-home delivery and returns for posts and carriers around the world, improving their cost-effectiveness and customer experience. Mike is responsible for Doodle’s engagement with postal organizations and parcel carriers, working with them to improve their out-of-home delivery propositions and helping them to increase consumer preference for out-of-home delivery methods.
Parcel Monitor is the leading platform for e-commerce logistics insights. By leveraging on our data capabilities, Parcel Monitor creates an open space for the ecosystem to discover, collaborate and innovate.
Through data and the collective wisdom of the community, we believe we can inspire change in e-commerce logistics and deliver a better experience for consumers, merchants, and carriers.