The last mile is well recognised as the Achilles heel of online shopping, but Collect+ aims to offer a better option. Chief executive Mark Lewis explains the strategy to Johanna Parsons.
Driving 20 per cent annual growth at internet phenomenon eBay is no mean achievement. But the challenge just got a bit harder for Mark Lewis – how to take the pain out of parcel delivery. In June, he was hired as the chief executive of parcel delivery firm Collect+, which offers a pick-up and delivery service from a network of local convenience stores.
He’s taken a rather circuitous route to the logistics industry – moving from a maths degree to managing restaurants in Paris and Sydney, to an MBA at INSEAD via senior account director at advertising house St Luke’s. But being at eBay from 2004 has given him an informed view of how the online retail marketplace has developed.
“I’ve been working in e-commerce for quite a long time, and I’ve seen the different stages of it. When e-commerce launched it was fairly cute and quite quirky, whereas now it’s reasonably mainstream. We all know that we can find whatever we want online, we all know that we can probably find it at a more competitive price online, but we also know that actually getting it and receiving it might be a bit painful.”
And this is what has led him to the logistics of retail; the idea of capitalising on “removing those pain points”.
He says that one of the key lessons of his time at eBay was “just how important it is to keep listening to your customers. What they’re telling you is working and what they’re telling you is not working, and to drive that change through the business.”
Adjusting the functions of the eBay web site according to feedback from big sellers reaped big rewards at eBay. This time he’s focusing on new feedback gathered by YouGov which found that poor returns experiences lead 58 per cent of customers to shun the outlets in question – permanently.
After uncovering such huge customer dissatisfaction with delivery and returns services, he sees Collect+ as perfectly placed to respond to this customer demand. “The business is set up on a belief that as fantastic as online shopping is, there is still a big pain point in how things get delivered.”
Back to that key idea of eliminating the pain of delivery. The central idea of Collect+ is that, rather than waiting at home all day for a delivery, customers pick up deliveries whenever convenient from a local store. Items are secure, being scanned and tracked along the delivery path. Returns operate in the same way, via the convenience stores, using the same barcode as for the
original delivery.
The system is based on strategic partnerships with the Yodel delivery network that moves the parcels, and retail payment network PayPoint, whose in-store IT terminals provide receipts and tracking details for returns. The two companies co-own Collect+ and so have an interest in providing their best service.
Collect+ reckons that 75 per cent of the UK population live within one mile of a connected store already, a figure that Lewis sees rising to 90 per cent within the year. Typical locations are Budgens, Costcutter and Spa stores, with petrol stations as the next obvious step, fitting the model of convenient stores with long opening hours.
“At the heart of what we’re trying to do is just make parcels easier for people. All the customers that we talk to say ‘I never really know how much it’s going to cost, it’s complicated, I don’t know the difference between a large letter and a packet and I have to go to locations which are never open when I want them to be.’ We are trying to simplify all of that and offer a service that is on people’s doorsteps. I think that’s a really compelling proposition for the consumer.”
But minimising the hassle for consumers also translates to an incentive for retailers. “It’s something that really resonates. They know that there’s a problem there and they know that people in large numbers drop out of their web sites in the check out. Small differences to that drop out rate are worth large amounts of money to retailers.”
And retailers have been taking notice. In the first month since Lewis joined Collect+, it’s been taken on as a delivery option for brands such as New Look, Kitbag, Jacque Vert and Agent Provocateur in addition to Very, Littlewoods and others.
It’s no coincidence that the fashion industry makes up a lot of the company’s retail customers, as the returns facility is something that makes Collect+ especially relevant, says Lewis, with many retailers offering this for free.
“Fashion is a perfect category for us. People want to see it, they want to try it on, and shoes don’t fit through letterboxes.”
As well as expanding the Collect+ client base and its network of stores, Lewis has a wider vision for the company, seeing international and person-to-person services as the next challenge.
With a business model that clearly works best in highly populated areas, this may not be for everyone, but as more companies use Collect+ it does seem that Lewis’ faith in the concept is well founded.
He sees similarities between Collect+ now, and eBay as it was when he joined.
“In some ways I see a lot of parallels there… it’s a small business that I believe has got the potential to change how people shop.” Perhaps painless delivery is the future.
curriculum vitae
- Mark Lewis began his career as account manager at CDP Advertising in 1994.
- In 1996 he joined St Luke’s where as senior account director he led the government campaign for working families tax credit.
Lewis went back to school in 2000 for his MBA at the INSEAD business school near Paris. - From 2001 – 2004 he was a project leader at Boston Consulting Group where his projects included a strategic review of global loyalty schemes and payments for a petrol retailer.
- Lewis made the move to eBay in 2004. He joined as head of seller activation, but became UK managing director in 2008 and European director of marketplaces from 2009.
- He joined Collect+ in June 2010 as chief executive officer.
