There’s been a lot of talk in recent months about the ‘sharing economy’ with more ventures popping up every day which appear to build on the revolution kicked off by the likes of global brands Airbnb and Uber. Andrew Hill, commercial director at Electio explores whether this is just hype or could we be on the brink of a new age for buying and selling?
The next addition to our growing sharing economy is set to be peer to peer delivery, utilising the empty space that we have going up and down the motorway every day in ordinary cars. So should the industry be bucking up its ideas and making the necessary preparations to integrate this type of service into the system, or is it nothing more than a fad?
What do we know already?
In terms of the sharing economy we know there’s an appetite for it. We’ve seen a range of innovative start-ups pop up in recent years joining in on the trend. Home rental, dog walking, clothes swapping, bike rental – whatever it is you’re after chances are a start-up has at least thought of it.
With regard to peer to peer specifically, it’s also important to note that it was suggested that providing these alternative delivery options could cut traditional delivery costs by around 80% and that carbon emissions will be reduced dramatically at the same time as uptake increases.
But what will it take to turn these peer to peer delivery ideas into the next multi million-dollar idea that actually revolutionises the way we all go about our lives? Can this impact ecommerce delivery efficiency?
Fundamentally, it’s vital that companies capture our imaginations. Airbnb and Uber have made us question the ways we’ve all been doing things for generations; ‘I can’t imagine going back to ordering cabs over the phone’, is not an unusual sentiment to hear nowadays.
Secondly, the technology offered by these start-ups has to be second-to none. Time spent in development reaps rewards when companies need to convert interested consumers into customers.
To make it work, the service needs to be streamlined with usability and security nailed down. For this reason I think the battle between the likes of Postio and Nimber will be fought out with marketing and technology at its core.
Consumers who care to share
Some of the variations of this offering already on the market, such as Uber Rush, rely on professional drivers to make the service work. But this leaves out the majority of road users who have the potential to combat our ever-growing driver deficit.
Peer to peer services generally work by allowing vetted users to post jobs they’d like doing to the sharing community, which other users can bid for. In the context of deliveries, a businessman making a trip from Manchester to Leeds could log on to the platform’s app and find a job posted for a skateboard to be delivered from one city to another. For a bit of extra time, he could have an extra £10 in his back pocket. Meanwhile the recipient is pleased to receive their item promptly.
The attraction for consumers is that they can take control of the delivery process themselves, within their immediate communities and the wider sharing community. They don’t need to rely on postal services and can choose to earn as little or as much as they like delivering, depending on how often they drive and how much they want to get involved.
We’ll see a focus on companies attempting to get business users signed up who are driving around frequently as part of their day job – for these people the extra effort of picking up and dropping off a parcel could make them some significant money back on those miles being covered every day.
Would it really work for retailers too?
Absolutely. Retailers are under increasing pressure to get items to their customers almost immediately which is what makes peer to peer so attractive. Really, the only two viable options for retailers is to invest in city-centre warehouses or hubs (a luxury enjoyed by Amazon and Argos), or to use peer to peer; whereby an item is picked up from store and delivered to the consumer on the retailer’s behalf.
This is what makes peer to peer the current solution to beat, as it opens wide the same day delivery market, with even 30 minute delivery likely to be an affordable option for retailers of all shapes and sizes in the near future.
So how long might it be before we see peer to peer being a realistic option for consumers and the retail industry in the UK?
I think we’re only a year or two away from this type of service becoming ingrained but ultimately it comes down to interest on both sides. Sharing requires cooperation from two parties. Peer to peer delivery providers are currently in the process of trying to simultaneously recruit those willing to do the delivering as well as find consumers and retailers who would like to use the service to send their items. Get this balance wrong, and the system falls down.
I also believe that integrating these services into ecommerce and the delivery industry will be key to its success. Having Postio or Nimber as an option on retailers’ delivery management platforms will be an important step for the innovation to work. Once retailers start using this delivery option it will be possible to grow, normalise and professionalise the service for consumers who also want to use it. Retailers will need to take the initiative for consumers to follow.
That said, we do have a few issues to iron out first – in particular the likely impact for carriers. In reality, many carrier companies don’t employ their last mile drivers directly, which means a large proportion of drivers are technically self-employed. Peer to peer operators (or their technology at least) could supplement or replace these drivers, so one consideration for the industry is how responsibility will be managed. Who is the peer to peer contract between – who will be taking responsibility for confirming when a delivery has been made or when damage has taken place?
Hurdles aside, I still think the opportunities are too exciting to ignore. Just imagine the benefits for the Post Office and the general public, for example, if there was a way to round up parcels from a local area, to avoid ten people having to go out of their way to queue up individually.
From someone coming at this from a delivery management platform perspective, this trend is very exciting. Innovations are an important step in driving the industry forward and I think we can expect more start-ups in this space to appear as we advance into 2016. I believe peer to peer delivery, and the utilisation of empty space on our roads, is the future – not a fad.
Andrew Hill is commercial director at Electio the retail delivery platform
- Postio, Nimber