The internet has offered a revolutionary way to promote and sell online globally, but at the end of the day, unless you’re selling something that can be digitized, it still needs to be delivered. As yet, Samantha can’t wiggle her nose and teleport it across the ether. Apologies for the age specific pop culture reference, but I just experienced a Bewitched moment!
The distribution and delivery of goods is experiencing disruption. Government postal services are reeling to reconfigure their infrastructure to handle more parcels and less letter mail, as much communication shifts online. Encumbered by expensive fixed costs and union contracts, this has been a challenge. Indeed, in Canada we are headed for a 5-year phase out of door-to-door delivery of letter mail in many urban areas. But parcels, that stuff you order online, are likely destined to become Canada Post’s bread and butter. At least that appears their hedged bet. Canada Post officially opened a new $200-million, 700,000 square foot processing centre by Vancouver International Airport recently. It’s meant to capitalize on major growth of e-commerce across Canada and the Asia-Pacific Rim. On an average day, the new centre will process 4 million pieces of mail, letters, and parcels. Being close to YVR and Canadian Border Services is very strategic. See a video tour of the new facility here: https://www.youtube.com/watch?v=xO6oo_K8bD0
Clearly Canada Post sees their competitive future in what traditionally have been the courier business, and the domain of FedEx, Purolator, UPS, Canpar and DHL. They’ve essentially gone from a crown corporation to a private business, whether they realize it or not.
On the other end of the distribution disruption spectrum, in the small packet local one-day delivery category, is Zipments. Launched in the US, and brought to the local Vancouver market in 2013 by Rob Safrata, owner of Novex Couriers, the business model is part of the “sharing economy”, a huge growth trend lead by successes such as vacation rental, Airbnb.com and private taxi service, Uber.com. Zipments (http://zipments.ca/) utilize drivers already on the road to deliver packages, mostly from retailers to customers who have ordered items online. Based on a similar model to Uber, a sales representative, a commuter or even a Mom already driving from A to B, is contracted to deliver the package. Drivers are independent contractors who earn $6-18 per delivery. They can log in with an app, and deliver packages when it works for them, based on their current location and where it needs to go. Safra has 25 lifestyle couriers working for him, and the company uses Nova Couriers as the back up. The company has signed on several large local companies such as MEC and Purdy’s and is solidifying agreements with several large national retailers. This is definitely a disruptive and innovative move in the same day delivery service category.
And then there’s the promise of drones, those remote controlled helicopter things that Amazon and Google are looking to use to completely innovate and disrupt the delivery category. Amazon has applied to the Federal Aviation Authority to allow the commercial use of drones for package delivery, essentially allowing the shopping giant to map the sky. Click here to see a video of Amazon Prime Air in action – quite something: https://www.youtube.com/watch?v=98BIu9dpwHU
So what’s the marketing lesson in all this? I’d say there are two. Even something as traditional as distribution and delivery of goods can be disrupted and businesses have to respond to remain competitive. Big or small, this example illustrates that competition can come from many different angles. And given some of these changes afloat, if you’re in the business of delivering goods purchased online, as a marketer, you’ll likely see opportunity in these examples from a cost and speed perspective.
