In Clay Christensen’s classic business book “The Innovators Dilemma” he argues that large accomplished companies become victim of their own success by paying attention solely to what made them successful and not enough to the innovations in the small markets around them.
Now with that said it’s advisable to capitalize on and nurture core competencies but it’s also imperative to pay serious attention to changes in how the industry is evolving. Failing to do so will allow smaller more nimble disruptors to begin to grab market share and threaten the survivability of established corporations once thought indestructible.
One has only to think of Netflix and its assault on the broadcast industry, Uber on transit and Airbnb on hotel accommodation. All of these disruptors have one thing in common – the desire to drive change and provide solutions to verticals that were short on innovation and long on entrenched processes that were outdated.
In North America there are two industries that are ripe for disruption: Grocery and Logistics. In groceries we’ve seen the acquisition of Whole Foods by Amazon in which the “soon to be biggest corporation in the world” (value cap perspective) has indicated its interest in disrupting how we shop for food and essential items. We’ve also seen Walmart and others frantically searching for answers on how to innovate as quickly as possible. It’s going to be quite the battle to watch over the next few years as these two behemoths fight it out for supremacy.
The logistics industry is also proving to be a very fertile ground for disruption and the large established players in the space need to be pay attention. Last mile delivery processes have been the same since basically the dawn of time and are not flexible enough to serve a growing consumer and retailer base that is looking for innovative, environmentally friendly, cost effective and more relevant options. The winning players in this space will be the ones who partner up with smaller companies and or quickly provide targeted solutions for consumers and retailers in this fiercely competitive landscape.
At Parcel Port we live and breathe logistics and have identified the top 6 issues we believe that express couriers need to look at right now.
- Growth of B2C e-commerce. No secret here that volumes have dramatically increased over the last 5 years and will continue to double every five years by the latest estimates. Nope, e-commerce is not a fad, not only will residential deliveries accelerate, but how we buy food and replenish-able goods will soon be transformed.
- Guess what? Labour, fuel and general overhead costs aren’t going anywhere but up increasing pressure on net profit even if volumes increase dramatically.
- Consumer expectations. We as consumers want it all. Faster delivery, low or no cost shipping, increased security, privacy and flexible options of when and how we receive our online orders and as well easy product returns. In a recent survey from Canada Post, 63% of online shoppers said that free shipping was a must have to complete any online purchase and that 68% of shoppers who paid for shipping expect to receive it in no more than five days.
- E-tailers and retailers are increasing pressure on express couriers to offer “more for less” to help them meet the demands of their customers. The innovate or we’ll go somewhere else mentality is prevalent.
- The Amazon effect. Amazon has conquered the consumer and as such created customer expectations for lightning fast deliveries and cheaper fulfilment costs. They’re also experimenting with their own logistics solutions and have access to the cheapest capital on the planet and have no qualms spending it on new discoveries no matter how novel.
- Environmental. There is huge pressure from consumer and governmental agencies to decrease the environmental effects of the logistics industry. Although we all want to receive our parcels the same day for free, we also want to ensure that how they’re delivered leaves the smallest footprint possible on this planet of ours.
ParcelPort’s Success Blueprint
No doubt as an express courier you’ve identified many of the same issues we’ve outlined in the section above. You’re hard at work with your internal teams and perhaps consultants looking for answers, filling whiteboards with ideas ultimately trying to craft an overall strategy. One that will allow not just survival, but prosperity in an environment that has not seen the growth or sheer number of direct competitors in recent memory…if not ever.
So, how do you as an express courier compete in the coming years when costs are rising, disruptors are everywhere and you’re heavily invested in assets and processes that fundamentally haven’t changed in a generation?
- Think small – Invest in and create small more nimble teams that have the C-suite buy in to work quickly to assemble and test pilot projects. Build, measure and learn in a cycle so that successes are created from mistakes and continuous improvement.
- Partnerships – Work with innovators in your space that have models and or pilot projects already in place. Tap into their expertise and form mutually beneficial partnerships.
- Learn – Build your network of innovative logistics companies and find out how these companies are changing the ways things are being done – listen and watch who’s being successful, how they’re doing it and in which markets they are being successful in.
- Think even smaller – Small market tests. So, you’ve created that small nimble team? Use smaller communities to test pilots in and work alongside these local communities. Ask local businesses and consumers their advice and opinions, aside from the good will it will generate, you may be surprised by what you get out of it. At the very least you’ll have made some new friends for your brand.
- Blue sky thinking – Look for brand new solutions in less competitive markets. You may find that more value is created in these markets compared within mature, more established ones. This is the “win the hearts and minds with innovative solutions” strategy that may have positive repercussions in your main markets.
- Throw them a life saver – Resist the temptation to let your largest customers hold you captive as they often want you to continue to do what you’ve always done. This keeps you away from innovation, change and seeing things from a fresh perspective.
- Hindsight is 20/20 – Don’t wait until a market is large enough to be interesting. By the time it’s large enough you’re already behind the eight ball. The costs of winning back market share is far more than securing it in an emerging market.
- Topical Reading – There are a number of outstanding books on innovation and disruption that expand on the themes presented in this blog. Three excellent ones are “The Innovator’s Dilemma” by Clay Christensen, “Blue Ocean Strategy” by W. Chan Kim & Renee Mauborgne and “The StartUp Way” by Eric Ries.
The last point we want to make is all about creating a culture of action not bias. In this we mean providing a culture that encourages and nurtures innovation and stifles the “we’ve always done it this way and that’s what made us successful” mentality. As an express courier you’re in a industry that is undergoing rapid change. Embracing the honest truth that you need to “disrupt or be disrupted” is the first step in finding innovative paths to change the ways in which you do business.
Go Ahead, Use Us!
At ParcelPort we’re innovators in first and last-mile solutions for Express Couriers and are actively building a Canadian network of Smart Parcel lockers in community locations and multi-unit residential and commercial buildings. Ours is an open network that works with any system to drive down last mile delivery costs, ultimately allowing you to enhance your offerings and services to your retailers and customers.
How can you use Parcel Port?
- Use us as a cost effective alternative for missed deliveries to your customers
- Augment your services with alternative residential consumer pick up options
- Offer an innovative option for your retailers/etailers to facilitate returns
- Lower your last mile delivery costs
- Enhance consumer experience and lower internal resources by installing our Smart Parcel Lockers in your terminals and or branches for consignee pick ups
We really think we have what you’re looking for and we’d love to work with you!. Give us a call at 1-800-818-0870 or drop us an email at email@example.com.