PostNL Issued Its Latest Results

In December 2013, the Netherlands based, PostN sold half its stake in troubled TNT, this may have helped. However they have said that results were driven by cost-savings and reduced pension contributions, which more than offset declines in letter volumes.

Higher revenue from the parcels unit in the quarter offset a 9.3 percent decline in Dutch addressed mail volume, as online shopping at home and abroad continued to grow. There was a strong increase in international parcel volumes, particularly for milk powder in China.

Excluding its UK mail business Whistl, revenue grew to EUR 4.25BN in the year. PostNL Chief Executive Herna Verhagen said the results showed they can adapt to a changing environment. She said: “The ongoing improvement of our mail operations resulted in EUR 127m of cost savings. This, together with the impact of price increases, more than compensated for the 10.7% decline in addressed mail volume in the Netherlands in 2014. At the same time, our delivery quality and customer satisfaction improved, as did our employee engagement. “Parcels delivered good growth with a volume increase of 8.8%. This growth is the main driver for the improved performance, which also benefits from the strengthening operational efficiency. Subcontractor costs increased in line with our expectations. We continued to invest in the expansion of our service offerings, such as evening and Sunday delivery and rolling out parcel lockers. International volumes and revenues grew and the segment contributed positively to PostNL’s results, however underlying cash operating income was below last year.

PostNL’s domestic mail business saw its revenue slip by 2% to EUR 2.01bn for the year as a whole, but underlying cash operating income nearly tripled to EUR 231m thanks to cost-cutting, new labor agreements and price increases.

In July with legislation further measures to help cut costs may be implemented allowing a cut in the number of letterboxes and post offices. PostNL are trying to force moves to allow regional postal players and reseller’s access to its network for business mail, under competition rules being reviewed by the postal regulator, ACM.

In 2014 PostNL’s parcels business saw its revenue up 6% year-on-year to EUR 854m, with underlying cash operating income up 10% to EUR 98m.Compared to the year before volume grew by 8.8%, thanks largely to e-commerce. There are many reasons for PostNL improvement in results one of which is completing its investment in its new parcel depot network. PostNL have redesigned their delivery vehicles so that they can deliver both parcels and domestic delivery this is another key point in cost improvements within the company.

PostNl international side of business revenue has grown 6% to EUR 1.71bn, with underlying cash operating income falling by 75% to EUR 8m, with results impacted by the roll-out of end-to-end delivery services in the UK by joint venture Whistl.

Looking ahead, Verhagen said: “Being well-positioned to further benefit from the growing e-commerce market, we expect parcels to continue its growth and strengthen its market position,”

China Pilot New Cross-Border e-Commerce Zone Is To Be Set Up

According to the Chinese state council in the capital of east China’s Zhejiang Province a pilot cross-border e-commerce zone is to be set up. With the new e-commerce zone China are likely to expand on their e-commerce trade which last year was worth $637.8 billion.

On Thursday a statement was released on the Chinese Government website which said that the state council have approved the e-commerce zone to develop and improve the countries overseas e-commerce industry.

The zone will have high standards and will take the lead for cross-border e-commerce logistics, customs clearance, transactions, exchange payment, exchange settlement and tax refunds. The zone will build complete industrial chains working through problems in international e-commerce; this will provide the sector experience that can be used across country. The zone will be set up and based in the city of Hangzhou. The Chinese state hope that this will expand the market and bring energy to the area along with plenty of new job opportunities.

The overseas online shopping market in China is huge with great potential to expand further. Last year China handled $637.8 billion worth of international e-commerce transactions. According to market consultancy iReasearch this was up by 30.6 percent from 2013.In 2013 China overtook the US as the worlds largest e-commerce market when their sales reached $306 billion compared to the $263 billion in the US. By 2018 China are expected to overtake the US as the worlds largest retail market, as the Chinese consumers have a passion for overseas goods.

PayPal released a report in September 2014 claiming that 35.9 million online cross-border shoppers would spend up to $159 billion by 2018.

Australian Online Retail Delivery Network Startup Raises $7m

Australian online retail delivery network startup ParcelPoint have raised $7 million, they will use this in the next financial year to double their network of partnerships and increase the number of staff in which they employ.

The co-founder and commercial director of ParcelPoint Julian Leac says in addition to the commission per parcel that each of those stores receives, it also brings more customers into the store leading to potentially more business within the stores. Mehdi Fassale CEO and company co-founder said ParcelPoint plans to more than double their network and retailer partnerships and expected its headcount to grow by around 50% over the next financial year.” ParcelPoint was launched in 2011, they have signed up more than 1500 retail stores across the country as collection points such as newsagents, pharmacies, convenience stores and storage facilities this enables customers to collect their deliveries from local places out of hours. Now ParcelPoint have created a large network of collection/return points they have created a resolution for allot of internet shoppers as they no longer have to worry about collecting their parcel within the Post office opening hours.

“For small business, many are working out how they can play a role in the developing online marketplace. We pay the stores a commission for every parcel on the network they receive. But a key benefit is the foot traffic for their stores. It’s a great way for the local store to remain relevant and growing,” Mehdi Fassale says .

ParcelPoint has over 100 clients using that network to deliver their products to consumers, including the likes of Adidas, THE ICONIC, OzSale and SurfStich. The startup also licenses its technology solutions to omni-channel retailers enabling them to offer click-to-collect services in their stores.ParcelPoint have also developed software solutions to provide retailers with smart fulfillment capability comprising integrated Click & Collect, Ship from Store and Returns.The funding round was led by Blue Sky Venture Capital and the firm’s investment director Elaine Stead said ParcelPoint was redefining traditional e-commerce delivery and return processes.

“ParcelPoint’s business is so compelling because its solutions remove the friction for all stakeholders in the online retail process – retailers, carriers and most importantly, the consumer. We are backing a team with incredible credentials who, in just over three years have built an incredibly successful business with multiple revenue streams in a market with a huge opportunity for growth.” Stead said.

Shipping Costs Are Very Important To Customers

Consumers all agree that shipping costs are a key aspect of online shopping; there is plenty of room for improvement on delivery prices this would make it more appealing to online shoppers. The results from a report done by comScore show that consumers find the pricing of shipping almost as important as the price of the product. This report also shows that customers are more likely to come back to the same retailer if they offer free or flat rate shipping deals over special promotional deals. The percentages are as follows; 54% of customers returned to sites offering free or flat rate shipping deals and 36% returned for a discount and 11% returned who had coupon deals. According to this report 42% of consumers said they wanted to see an improvement on returns/exchanges, another improvement consumers indicated at was product variety and online tracking which both had 38%.

The report showed us that even though customers rate the free/flat rate above average in satisfaction it is valued below average in importance whilst returns/exchanges is classed below average in satisfaction however above in importance. This shows that it is very important to have a good process for both delivery and returns to ensure that all your customers needs are met.

Customer recommendations concerning free shipping.

Free shipping is a great way to get both existing customers and new customers to visit the site. 63%of customers said free shipping had led them to a recommended retailer. Shipping has led to more recommendations from customers than any other, free returns only getting 29% and the ease of returns getting 28%.

Shipping charges can cost retailers.

Shipping charges must be made clear near the beginning of the purchase as 40% of customers abandoned their shopping basket when shown the delivery charge to late in the transaction. 55% of customers also abandon their shopping basket due to the delivery charge making the overall purchase price to high.

Among all options delivery charges topped the list at 73% of customers wanting to know the charges clearly at checkout. Delivery information beat 60% for delivery date/time and 56% for options of payment. This information is based on a study from the e-tailing group done in 2011.

Return policies are also a key factor.

Data gathered from comScore reveals that 3 in 5 customers have returned a product in which they bought online, because of this its no surprise that 63% of customers look into the retailers return policy before placing an order. Retailers who offer a lenient and easy to understand return policy are more likely to have customers order further products and recommend the site. Customers at 35% say they would leave a retailer due to a complicated return policy.

Key findings

• 74% of customers rate the importance of free/discounted delivery.
• 83% rated they looked for ease at checkout.
• 82% wanted more variety of brands.
• Consumers on average are willing to wait for purchases between 4-5 or 6-7 days.
• Customers at a value of 1 to 4 leave their shopping basket due to no delivery date being provided.
• Economy delivery is the most expected at 78% and the most chosen at 67%.
• Customers said that tracking is an important factor to them with email or text being the most popular form of correspondence at 45%.
• 62 % of customers prefer the return label to be within the parcel, with 61% liking the option of print your own return label.
• The most common complaints from customers are having to pay for return shipping at 66% and having to pay for a restocking fee at 43%.

Low Prices and Free Shipping Are More Likely to Draw Consumers

Consumers in a recent Forrester survey say that low prices and low delivery cost is the main to reasons that they would buy/re visit an online retailer.

92% of the top 50 e-retailers which were studied in this report offered some sort of free shipping.

53% of participants say that low shipping cost is very important and would be an important factor when choosing an online retailer.

59% of consumers say they consider the shipping costs when making online purchases. Customers stated that 43% look at reviews placed on products form other customers and 34% on the product information the retailer gives.

The retailers shipping policy was rated at 26%.

Shipping is clearly a huge factor in the customer’s decision process therefore should be clearly displayed and easy for the customer to understand; delivery options and prices should also be displayed near the beginning of the process.

78% of retailers mention their shipping details in some way on their homepage while 22 % don’t mention it at all.

Forresters shipping analysis found averages in which customers would have to spend before qualify for free shipping these are as follows:

• Electronics $30
• Personal care products $25
• Mass merchants $33
• Office supplies and books $43
• Department stores $56