Mike Richmond, chief commercial officer at Doddle, poses the question: is sustainability set to push PUDO (Pickup Dropoff) to its tipping point in 2020?
In 2015, the UK government introduced a mandatory 5p charge on single use plastic bags. It’s been a phenomenally successful initiative in reducing plastic waste, with plastic bag usage down 90%. But for me, the most noticeable change has been the way it has changed consumer behaviour. Walking up to the till with your re-usable bag at the ready, you feel like a paragon of virtue. But forget it, and you cringe and apologise at having to buy a 5p bag.
What’s interesting is that for most people it’s not about cost – it’s psychological and indicates how societal pressure combined with regulatory change has fundamentally altered our behaviour. For me, the plastic bag is a metaphor for so much that is changing in the retail environment, with unprecedented consumer demand for less packaging, fewer toxins in products, a focus on the provenance of materials, much keener focus on sustainable supply chains, and so on.
Thinking of Malcolm Gladwell’s theory of the tipping point – ‘the magic moment when ideas, trends and social behaviours cross a threshold, tip and spread like wildfire’ – there is little doubt that 2019 was a tipping point for sustainability. It was the year that a 16-year-old eco warrior grabbed more column inches than the Kardashians, that David Attenborough received a rock star’s welcome at Glastonbury and that Gucci and Zara joined G7 leaders in a global pact to fight climate change.
And whilst the logistics industry won’t ever be seen as an ‘early-adopter’ of the latest consumer trends, I believe we’re moving towards a tipping point in the e-commerce fulfilment space that will see greener, consolidated PUDO delivery options overtaking home delivery as the societal norm. Coming from a company that provides the technology to enable this, I’m arguably biased, but statistical evidence and the rapidly changing fulfilment landscape point to a fundamental shift in the way consumers, retailers and carriers are viewing online delivery and returns.
Amazon Hub network
Look at Amazon’s rapid and aggressive growth of its Amazon Hub network – a clear shift from individual to consolidated fulfilment. Witness the number of unlikely partnerships enabling local PUDO options – John Lewis teaming up with Co-op stores springs to mind. Or consider the fact that UPS are using financial rewards to incentivise consumers to choose their Access Point locations rather than opt for home delivery.
At a macro-level, PUDO is now the fastest growing fulfilment option globally, with a blueprint, in sustainably advanced markets for it to become the dominant fulfilment choice. In eco-conscious Scandinavian countries PUDO is approaching 70% penetration – compared to 15% in the UK.
Even in Australia, where PUDO penetration is currently in low single figures, the most forward-thinking carriers are anticipating PUDO’s imminent tipping point and preparing. Our recent partnership with Australia Post will enable the national carrier to create and power a PUDO network of thousands of locations, making it a truly viable alternative to home delivery.
I believe the sustainability tipping point has given the shift from individual to consolidated delivery a new urgency that will ultimately determine those that survive and thrive in the new logistics landscape.
Why? Because the retailers we speak to are painfully aware of the weight of consumer expectation in this area. A leading sportswear retailer recently told me that any sustainability initiative is automatically given precedence right now – such is the recognition of its value to future consumer loyalty. And half of today’s shoppers now say that in the future they want to exclusively shop with retailers offering sustainable fulfilment options. With this rapidly shifting buying psychology, retailers are looking to partners – including carriers – to help them make the necessary shifts as painlessly and efficiently as possible.
The CO2 savings
So, what can carriers do? A priority has to be growing their own (or partnering with) PUDO networks that marry the consumer need for convenience with sustainable consolidation. Secondly, carriers can help retailers to communicate the CO2 savings made by selecting consolidated fulfilment options and use the most visible part of the final mile – their livery – to shout about the positive sustainability benefits. And finally, and perhaps most importantly, consider price. Very few (if any) carriers in the UK appear to offer PUDO locations at a discount to home delivery, which has restricted retailer and therefore consumer adoption. If UK carriers put a €7 surcharge on home delivery – the approach taken by some leading carriers in Scandinavia – there would be a seismic shift very quickly.
By empowering consumers to make more sustainable fulfilment decisions, carriers and retailers can create a delivery and returns proposition worth shouting about – a win for the environment, a win for making consumers feel good and therefore a win for the consumer loyalty that will ultimately drive carrier and retail businesses forward for decades to come.
Tipping points hold immense power. They’re highly contagious and can consume those unprepared, unawares. But they can also create new, powerful and positive social norms that if we’re prepared and ready, can benefit us all. Why not make 2020 the year you embrace the sustainability tipping point?