Online shopping in an instant
Take a moment after work to quickly place an order for the latest smartphone, buy the next couple of days’ worth of groceries for home delivery, receive urgently needed medication right on time or just have laundry detergent sent to you once a month – for many people, especially working people, seniors and young families, these options make life easier. Whether it is the latest electronic toy, furniture or fresh food: online, the full range of everyday necessities is just a mouse click away. Evolving business models and changing consumer behavior ensure there will be no end in sight to the e-commerce boom. In the process, demand for rapid, tailored and transparent shipping solutions and logistics services continues to grow. For Deutsche Post DHL, these service solutions form the foundation of the company’s daily business. As a result, the Group is systematically investing in the expansion and modernization of its German-wide parcel network.
Whether it is the latest electronic toy, furniture or fresh food: online, the full range of everyday necessities is just a mouse click away.
Comprehensive investments in the parcel infrastructure
Deutsche Post DHL handled 870 million parcel shipments in 2011 - 10 percent more than in the year before. And in the first nine months of 2012, the parcel business recorded double-digit growth in volume and increased its revenues 10.5 percent above the already high level achieved in the same period last year. And the potential for growth is far from fully tapped: in decades to come, retailers are expected to steadily expand their share of online sales - from today's level of less than 10 percent to up to 25 percent in the future, with a corresponding impact on parcel volumes. To leverage this potential, Deutsche Post DHL launched a far-reaching parcel concept last year.
"Our parcel business is not only the engine of online retailing, but an enabler of the ongoing boom. The fact that shopping over the internet is a positive experience for a growing number of people is directly linked to the speed and quality of our parcel business. And this trend is further supported by an ongoing launch of new services - such as receiving notice on the delivery status via text message or being able to name a preferred delivery day and location. This is why our business is growing significantly faster than the market," says Jürgen Gerdes, the member of the Board of Management at Deutsche Post DHL who directs the MAIL division. "Supported by an even more powerful infrastructure and network we will soon be able to delivers parcels as fast as letters. This will lead to further improvement in customers' satisfaction and translate into another impulse for online retailing. So the investment will pay off - for our customers, the economy and our company."
To achieve this goal, market and innovation leader Deutsche Post DHL is investing EUR 750 million in its infrastructure, the largest investment in the parcel network since the 1990s. By implementing cutting-edge technology and IT systems, production processes will be changed at the same time. Thanks to new sorting technology, partially automated vehicle unloading and software solutions that enable transparent parcel tracking, the sorting capacity of the network is supposed to double and the quality of delivery time to rise to the same level as letters.
New products being offered, new demands placed on shipping
It is one thing to successfully deal with the increasing volume of parcels. It is altogether something else to tackle another emerging challenge: the careful handling of new parcel contents. Besides the established convenience segments of media, consumer electronics, fashion items and shoes, such items as medicines, food products and pharmaceutical articles are being shipped more frequently. This places new demands on the logistics industry.
Deutsche Post DHL recognized this potential for food shipments at an early stage and teamed up with the online supermarket 'Allyouneed', a start-up company in which the logistics giant now holds the majority in. "In an international context, Germany is still just in its infancy, but we are convinced that this market will achieve high growth rates here as well," says Andrej Busch, CEO of DHL Parcel Germany. "The takeover of 'Allyouneed' gives us an opportunity to carefully examine the market. By taking this approach, we can learn about the target groups with their respective needs and systematically refine our services."
This includes shipping refrigerated medications and meals. "While it's true that frozen products can now be easily transported, they do create a lot of packaging waste," Busch says. "This runs counter to our business strategy, which is designed to follow sustainable business practices. For this reason, we are testing new packaging concepts, including refrigerated rolling containers and cooling troughs that allow couriers to remove products shortly before delivering them to the customer. This reduces waste and lowers costs as well." Speaking of costs: purchasing groceries and similar products online should cost no more than it does at a regular supermarket. And if the volume of the customer's order is large enough, shipping is included free of charge. "Of course, it makes no sense to ship individual tubes of toothpaste," Busch says with a smile.