The Ti Blog: Last, but not least, mile delivery

Two companies made the news two weeks ago in the French post and parcel market. US e-commerce giant, Amazon and Colis Privé. While the former company’s name rings a bell, the latter is likely to be less familiar.

US giant Amazon bought the remaining 75% stake of French B2C delivery company Colis Privé, just a year and a half after discreetly acquiring the first 25%. Colis privé was founded in 1993 by cosmetics magnate Yves Rocher as an alternative to La Poste during a strike. It is a last mile private operator, including collection of parcels directly from web marketers to final delivery to consumer’s home, convenience stores or lockers. The company competes in France against the state-owned La Poste, and global giants TNT, DHL, UPS and FedEx to deliver parcels. In 2014, Colis Privé claims to have delivered more than 35 million of parcels through its network of 1,700 home delivery sub-contractors.

Amazon’s plan to complete the acquisition of Colis Privé in its entirety is one step further in the company’s ambitions to manage its own distribution network and free itself from carriers such as La Poste. Already operating its own service delivery in China and in the US, Amazon has arguably planned its move in the French market since 2014, when it first invested in Colis Privé.

Another aspect of the market which is changing the way the sector operates is the number of innovative start-ups moving in to the space.

E-retailers compete fiercely to be the fastest and the cheapest, particularly when the busy Holiday season is approaching. Same-day delivery is a competitive advantage for online retailers and demand is only expected to grow. Identified as a major opportunity, last mile delivery and instant delivery’s niche markets have seen number of start-ups explode. Some of these upcoming ‘Uber-for-delivery’ start-ups address the issue of the notoriously costly “last mile” delivery and can make success less dependent on critical mass should the customer consent a surcharge.

One such disruptive start up operating in the US, Zipments, targets small businesses with a same-day courier service. Businesses can request a delivery through an app or website, select a specific courier, track the status of orders, and rate the courier’s performance. Similarly, the San Francisco-based company Deliv offers same-day delivery to local retailers’ customers for as little as $6.25 per delivery.

In France, two start-ups have moved into the market. developed an algorithm that optimise “pick-up and delivery” and Colisweb offers retailers and individuals real-time courier selection for a delivery within two hours in major cities in France. Even if these services are currently only available in limited areas, large retailers, which currently only offer next day delivery, must take the threat seriously.

Other strategies for operating effectively in the last-mile sector can sometimes include partnerships or acquisitions. In 2013, UK-based marketplace EBay acquired Shutl to bring the same-day delivery option to its customers. In 2014, DPD launched “last mile lab” a start-up accelerator dedicated to the delivery industry seeking to enhance their customer’s last mile experience in the future.

Recent developments in last mile delivery have arguably turned the market upside down. Consequently, existing last mile operators and retailers have been forced to position themselves for the upcoming transformation.

Adapting to meet impatient consumers’ expectations may require turning to someone smaller and more agile, just like Amazon did.

To access more content from the Ti Blog please follow the link provided: