Pick up Drop off channel to increase 193 percent by 2019
With the increasing demand for Click & Collect services throughout the UK, another delivery channel has been earmarked for growth to satisfy the consumers ever evolving shopping habits and needs. The value of the Pick up Drop Off (PUDO) channel is set to grow by 193 percent between 2014 and 2019, according to the latest report from Verdict.
This rapid expansion will be driven by the growth of current PUDO services, such as Collect+, the Post Office as well as smaller players like Amazon Lockers and InPost, which are currently being rolled out across the UK. Although these services are still small in comparison to established Post Office services, PUDO channels are gaining traction in the UK. For example, Amazon UK currently offers lockers in nearly 300 key locations, including train stations, London Underground stations and shopping centers.
PUDO market to triple over the next fiver years
Analysis from Verdict shows that PUDO service providers have managed to make “significant inroads in the online market in 2014, with the market increasing by 43 percent year-on-year.” The channel seems popular among young shoppers, such as millennials, who have a higher PUDO penetration rate, but is also growing among older consumers. “Ensuring that consumers gain a better understanding of the service available, is vital, and marketing these services appropriately is key,” adds Verdict.
Clothing and footwear have also been highlighted as one of the driving factors behind the PUDO growth, with larger items accounting for the majority of PUDO deliveries. However, with introduction of new entrants, like Doddle, current PUDO services are also faced with new competition from brick & mortar retailers. eBay’s partnership with Argos, for example, now gives the online pure player a physical presence whilst utilising it’s extensive store network, helping to drive footfall. This also allows eBay to become more competitive with Amazon.
Another challenge to PUDO growth comes in the form of external investments in other delivery services from retailers, who aim to offer shoppers the utmost convenience when it comes to delivery options. Retailers are using investments to enhance delivery options by introducing hourly slots, and lower minimum spend limits. Nevertheless, a number of retailers still have not been able to use services such as click & collect to the best of their advance, especially during key trading periods such as Black Friday and Christmas when they are unable to handle all online orders, making PUDO, placed in a convenient location, a logical alternative for UK retailers.