Collection Points Vs Home Delivery: The Next Frontier of Last Mile #2
Did you know, Amazon has over 10,000 hub stations across America. A hub station is a shelf or locker located in a high traffic area that Amazon customers could go and collect their parcels from. All the customer has to do is walk up to the hub locker they’ve been assigned and input the code they were sent by Amazon to open the locker and collect their parcel.
Did you also know that over the next year, Amazon plans to more than double the number of lockers across the U.S.
But that’s the U.S, closer home, we have companies like Kikuu and Copia, with the latter boasting of having over 15,000 pick up stations in mashinani (rural areas) of Kenya. There’s also Jumia, who have over 300 pick up stations across the country. Not surprisingly, they too would like to grow their number of pick up stations. Why?
The Collection Point Advantage
Well, for a company that needs to do fulfillment, pick-up stations allow your courier to deliver multiple packages at one spot. This means:
- Huge amounts of time saved from going to individual homes
- Even more huge amounts of time saved calling and managing customers to receive their packages. You know those common customers who just happen to not be picking their call just when the courier is at the gate waiting to deliver the package?
- Money saved that could amount in over 50% of delivery costs! Because now, you’re paying the courier to deliver the parcels all in one place.
- Ease of planning fulfillment trips because you know exactly how far each shop is, it’s hours of operation, and it’s level of security
What has become clear is that, for each of the above mentioned eCommerce marketplaces, the onus of finding, signing and training brick-and-mortar stores to become collection points rests with the individual company. This realization is what motivated my friends and I to begin investigating the possibility of ‘open source’ collection points. That is, stores that any eCommerce retailer could plug into and deliver to without the hustle of finding each shop first, or managing the shops thereafter. But what would it take to do this? How many shops will be needed? How would you control the safety of the items going into and out of the shop for both the merchant and the brick-and-mortar store owner?
We’re finding the answers in what we’re calling ‘operation me.zigo’ (pronounced like the Swahili word ‘mizigo’ meaning ‘goods’).
Look out for part #3!
Over the past 6 months, I’ve done extensive work building a delivery system that employs brick-and-mortar stores as last mile delivery partners for online businesses — app.mezigo.co.ke
I believe that our local shops were the missing link between our online businesses and our customers, so I want to share my findings in a series of articles on collection points as the next frontier of last mile delivery.
