There is a $367B ‘Second Hand’ opportunity hiding for parcel locker networks, argues Francesco Tribuni (pictured below), Sales Manager and Industry Expert for Bloq.it
One of the joys of being part of the parcel industry is that innovation is continuously in the background: there’s no day, week or year without radical changes. Those changes are more often exogenous, therefore always enabling new opportunities in the first and last mile.
The most promising one I see nowadays is coming from circular economy: second hand, peer to peer, resale, repair services (…) call it whatever you’d like. It is a growing market, with global second-hand apparel market likely to reach $367B by 2029.
Francesco Tribuni
So, what makes this so appealing?
It is not the ‘resale’ in itself as we’re all accustomed to it, but rather the fact that we can upgrade from a neighbourhood market level, which takes place once per week and with limited local reach, to online platforms connected with hundreds of millions of users. At this moment in time, we can now buy and sell online to a worldwide audience in a few clicks, buying a shipping label for a few €/$/£/¥, and also building a private business that could escalate to a 6 figure level.
How can Logistics support it and add value?
From a customer perspective, and especially for private users, online sales/purchases will start from the usual checkout, where logistics is perceived as an integral and not separate part of the process. Amazon has accustomed us to feel the shipping process as an easy thing, consumers like EASY processes. Also, don’t forget that +90% of private sales will have an average order value lower than the original price, due to this shipping cost must be cheaper, to be cheaper it must be self-service and with fewer steps.
Parcel businesses have the potential to support and add value through C2C services where the standard ‘A to B flow’ (A = Pickup Address, and B = Delivery Address) is radically different. Let me list some below:
– Instead of ‘addresses’, A and B are Parcel shops & Parcel Lockers.
– Shippers will buy labels on demand, no account needed.
– Labelless and boxless shipments: Parcel shops or Drivers will label and box products to be shipped.
– Parcel Lockers can be a temporary storage space.
– A to B is valid for both outbound deliveries & returns.
– Shipment will be prepaid, and Shipping Costs will tend to be cheaper.
– One Delivery Driver can potentially handle 500 to 1K parcels per Day.
– Cross Border is the New Normal, consumers are more open to buy abroad if the product is made available at an affordable price and transit time.
The forecast is quite clear: parcel and postal business can ‘extend’ its portfolio and revenue stream by accessing the mass of citizens (consumers) that are willing to resell their preloved things gathering dust in their homes. The potential market of C2C is enormous. And how should we logistics operators ‘deliver’ this change?
I see 2 ways:
– First – develop as fast as possible what’s above with a reliable and updated tech stack (people value convenience) together with an extended OOH Network where Parcel Lockers can play a crucial role.
– Second – ‘transform’ the Logistic Arm of a Second Hand Marketplace. This is what Amazon, Alibaba and most recently Vinted have done in recent years, after using Couriers as suppliers for years.
Lastly, a final thought about parcel lockers. It’s easy to call them ‘machines of bent metal’, but the real truth is that a smart parcel locker is the tech and logistics upgrade of a delivery driver (that won’t end nor replace their job):
– More deliveries per day.
– Little to no failed attempts.
– Customized UX while picking/returning a Parcel.
– Savings on Shipping Costs.
– Modularity can enable additional parcel capacity for peak periods
I’m biased on this topic, I know. But it’s safe to say that the future of every online order is already here.
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