Within the rapidly growing market of e-commerce, last-mile logistics is seen as a means to increase customer service and retention. By offering sophisticated delivery options e-tailers are able to stand out in highly competitive markets. In countries like Germany, the UK or Estonia, locker points and reception boxes have gained considerable significance. With developments in speed and flexibility (e.g. same-day) on the Dutch market however, delivery modes seem a neglected field of innovation.
The purpose of this paper, written by Ken Zschocke of Fontys Venlo, is to explain why innovation in parcel delivery modes in the Netherlands is stagnating and why a new leadership role is needed to accelerate innovation.
Evidently e-tailers see the need for more choice and higher efficiency in delivery modes. Unattended home delivery and locker points are expected to increase the convenience of home delivery through automation or allow for reliable and efficient 24/7 delivery. Three perspectives are used to analyse why innovation in this sector is stagnating: A market strategy perspective using Porter’s Five Forces, an innovation lifecycle perspective and a leadership perspective.
Findings substantiate the concern that there are very few threats to established carriers, the most relevant one is Buyer Power. This variable however hasn’t proven sufficient to enforce innovation from an e-tailer’s perspective. From a lifecycle perspective there’s no willingness among stakeholders to carry the initially higher costs of new innovations in delivery modes. The absence of real carrier threats leads to a lack in character traits needed for innovation leadership, such as a sense of urgency and risk-taking attitude. Carrier reluctance is increased by means of cost leadership focus and lack in dominant design.
In order to overcome this deadlocked situation, e-tailers need to offer consumers more choice in local delivery options. Collaboration with local service providers (De Buren; Fiertskoeriers.nl) enable innovation on a small scale, and disintermediate larger carriers. With growth in further stages, these approaches can develop towards viable carrier threats and outperform established modes by means of new technology. An example for this strategy is the collaboration of Zalando; Notebooksbilliger and Liefery in Germany. Established local delivery networks like these can subsequently be extended with new delivery mode concepts step by step.
In the long term these approaches lead to viable carrier threats and speed up innovation throughout the market by the emergence of true innovation leaders in parcel delivery.
Keywords: Last Mile, Innovation, Leadership, E-Commerce, Netherlands, Delivery modes, Carriers, Trends, Market Segmentation, Developments.