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The popularity of  ‘click and collect’ has grown among consumers worldwide as it offers them more flexibility in retrieving their online purchases. More importantly, the reason why consumers prefer this last mile method is because they avoid the delivery fee.

A growing number of companies like Japanese fashion retailer Uniqlo are letting customers pick up online purchases in 400 of its 500 stores in China to help tackle problems such as delayed deliveries. Retailers generate foot traffic and sales to offline stores.

67% of shoppers purchase an additional item while collecting their items in store.

It’s no wonder 51% of CEOs plan to offer click and collect in the next 12 months, while investment into same-day delivery only attracts 31% of them.

However, retailers need to keep in mind that to provide a positive experience for consumers using the service, simply relying on existing infrastructures such as the physical store isn’t enough.

The latest report from JDA & Centiro found that among the most common problems in the last 22 months that often occurred with click and collect included long waiting times and unsynchronized inventory between online and offline stores.

Retailers planning to provide click and collect as part of their ecommerce strategies need to allocate enough resources, whether it be data systems or software, to have a clear snapshot of real-time inventory to improve the entire retail process for both on the ground employees that need to fulfill incoming orders and the consumers standing in line waiting to spend their hard-earned cash.

Smart lockers were a big topic at Last Mile Fulfillment Asia this year.

What are they you ask? They are the tech-world’s equivalent of high school cubbies but out on the street, in your condominium lobby or shopping mall accessible only to users with the right digital passcode.

smart lockers Southeast Asia

POPStation lockers in Singapore. Source: SingPost

Many e-locker providers such as PopBox in Indonesia, Box24 in Thailand and POPStation in Singapore talk about the future of their businesses as the best solution to the region’s ‘last mile’ problem. But is it that simple?

Let’s disassemble the smart locker.

How it works

As online retail grows in the region, it’s understandable that more packages need to be delivered to end consumers. Nomura International (Hong Kong) projects that the package delivery market for the six major Southeast Asian countries will more than double from 2015 levels to over $7.5 billion in 2020.

The last mile becomes costly for companies because of how geographically vast countries such as Indonesia and the Philippines are and the broken address system across Southeast Asia.

While the last mile of the supply chain may be the shortest physical stage in a package’s journey, it represents about 30% of total delivery costs.

“Delivery cost per package a few years ago used to be 60 THB and now, logistics companies in this red ocean are subsidizing costs to charge only 30 and even 20 THB to grab market share,” said Paul Srivorakul, aCommerce Group CEO, at LEAP by ecommerceIQ and Sasin SEC.

Enter the smart locker, a new delivery option that promises less failed deliveries, flexibility for customers, and cheaper last mile costs.

smart lockers Southeast Asia

Benefits of a locker-bank i.e. smart locker.

For couriers to deliver the package:

  1. Login with company’s credentials
  2. Access data and address customer’s information
  3. Choose an available compartment
  4. Scan the package
  5. Put the package in the compartment, lock it and confirm delivery

For recipients to pick up the package:

  1. Internet shopper selects the “parcel locker” while checking out online
  2. Shopper receives an email confirmation and SMS (or in app) with details and code on package pickup
  3. Customer can track shipment to know when package has been dropped off
  4. At the smart locker, customer provides the code and other details using the touch screen
  5. If a package is not picked up, it will be transported to the nearest branch of the logistics partner

 

In Indonesia, PopBox Asia allows customers not only to pick up packages but as well make payments and return packages. In Thailand, WashBox24 (now Box24), lets shoppers pick up groceries and washed laundry ordered in app through partnerships with supermarket Tesco Lotus.

In North America, 7-Eleven has opened its doors to partners like Amazon interested in renting lockers to stay relevant as commerce moves online.

smart lockers Southeast Asia

Source: WSJ

But lockers are risky for 7-Eleven as each locker takes up about the same amount of space as one large shelf, holding dozens of lockers, which by some estimates could represent thousands of dollars in lost sales each year.

Do they actually solve any problems?

In many ways, smart lockers sound like a perfect last-mile solution. Available 24-hours, simple to use, convenient for the consumer and cheap fee for ecommerce businesses as packages are consolidated at one drop-off point.

smart lockers Southeast Asia

SWOT analysis of e-lockers.

But do they work?

Based on recent app reviews for POPStation and Box24, the service and ‘seamless’ pick up experience have faced some problems.

smart lockers Southeast Asia

Source: Google PlayStore, POPStation (left), Box24 (right)

While understandable to have hiccups with the introduction of new technology, the hardware heavy system has proven to work well in markets like Europe. But in a unique market like Southeast Asia, there are a few factors unaddressed by most reports.

Apart from the fact that the lockers require prime real estate and are costly to build and maintain – $5,000 to $35,000 per piece – these machines don’t accept cash.

smart lockers Southeast Asia

Source: WashBox24

Given that majority of Southeast Asians, with the exception of Singaporeans, still prefer cash-on-delivery, this last mile option is not viable for many ecommerce companies whose customers want to see the item before committing to purchase.

smart lockers Southeast Asia

Source: aCommerce

In China, 15,000 lockers were put in place in 2014 but handled only roughly 1% of all deliveries.

As Lazada Vietnam Gerald Glauerdt commented LMFAsia 2017 to ecommerceIQ’s question if he believed lockers were a good solution for last mile, “these lockers are more expensive than couriers that can take the package directly to the door.”

Operating in low-labor markets such as Southeast Asia gives companies the luxury of re-thinking their last mile strategies. As logistics networks expand their networks in the region, such as hubs on Indonesia’s scattered islands, costs will decrease to reach customers in remote locations.

New startups such as Park N Parcel are also leveraging existing infrastructure such as mom and pop shops and convenience stores to offer another last mile solution.

With packages expected to increase in the region thanks to the rise of ecommerce percent of total retail sales, there is plenty to go around for logistics players, given they can handle today’s customer expectations.

“If you do last mile only, there’s zero loyalty. You don’t remember who delivered your order, but you remember who screwed it up,” – Vaibhav Dabhade, CEO and founder of Anchanto.

Here’s what you need to know today.

1. Alibaba stock has gained 60.5% so far in 2017

Alibaba shares rose steadily from January to May, right alongside fellow e-tailing giant Amazon. Then Alibaba held a successful and convincing analyst day in early June, sending share prices skyward while Amazon’s stubs took a small haircut due to this international competitor’s apparent rise.

Alibaba’s sales increased by 60% year over year in the recently reported fourth quarter, and that revenue growth is accelerating.

Looking ahead, Alibaba is exploring global growth while its home-market Chinese consumer base grows more affluent and able to afford the occasional retail splurge. This company is riding powerful economic trends, not short-lived fads.

Read the rest of the story here.

 

2. For brands, fitting rooms are the key to unlocking valuable customer data

Fitting rooms are evolving past poorly lit mirrored closets and transforming into critical data touch points. By tracking the movement of in-store products using RFID technology and scanning systems, brands can follow item-by-item performance to make decisions.

“It’s scalable, but retailers need to position themselves to be able to pivot on a daily basis in reaction to this data,” said Ray Dollete, associate director of creative technology at Phenomenon. “Retailers aren’t tech organizations”

 

3. Southeast Asia poised for logistics boom

“Consumers have bypassed computers and are using their mobile phones to shop. About 20 to 30 percent of those online in Southeast Asia have bought something via the internet in the last 30 days, a similar rate to the United States or the UK,” says Regina Lim, JLL’s Head of Capital Markets Research, Southeast Asia.

“Our top markets for industrial development are Indonesia and Vietnam. Indonesia’s manufacturing output could accelerate to 6.5 percent over the next five years, from the current five percent. Vietnam stands out with its skilled workforce and relatively low costs.”

It hasn’t gone unnoticed by big players such as Alibaba, SingPost and Reebonz, all who have launched logistics hubs in the region this year.

Read the rest of the story here.

Here’s what you should know today.

1. JD.com poised to enter Thailand

JD.com, China’s second-largest ecommerce company, plans to enter the Thai market later this year in a move to expand its overseas business beyond Indonesia. Thailand would be a hub for servicing other Southeast Asian countries such as Vietnam and Malaysia.

“Thailand will come soon, before the end of the year. We will invest a lot and also find the best local partners to work together with. Everyone could be possible, but not Lazada,” said Richard Liu,  chiefsaid, referring to the fact that the Southeast Asian online retailer is now controlled by JD.com’s largest domestic rival, Alibaba Group.

He declined to say how much JD.com would invest in Thailand, though said it was likely to be less than he was investing in setting up a logistics network in Indonesia, which accounts for almost all its current business outside China.

Read the rest of the story here.

 

2. SingPost ongoing quest for a digital post office

SingPost’s SmartPost is meant to be a digital infrastructure project that will connect its processes, from collection to last-mile delivery. SmartPost will rely on tech like near-field communication (NFC), radio frequency identification (RFID), online notifications, digital imaging, and more. The tools will be used by SingPost staff to improve their efficiency and make their jobs easier.

Initially, the program will involve delivery of registered mail and other trackable deliveries. SingPost couriers will be issued smartphones loaded with apps that will help them keep track of deliveries and send out real-time notifications. The company expects to equip 1,000 workers with such phones.

Customers will be able to get updates on their own devices about their items. They can even collect deliveries they missed at the post office using just their phone instead of the old-fashioned “missed delivery” notification slip.

Read the rest of the story here.

 

3. Recommended Reading: WeChat Stores are China’s latest luxury craze

Enter WeChat commerce: mobile-optimised digital stores created for WeChat using third-party interfaces, mini-apps or integration with existing mobile commerce functionality.

“There are two main ways to sell via WeChat and the distinction between the two is a bit blurred. One is the off-the-shelf WeChat store. These are template stores provided by the likes of JD.com, which obviously has a Tencent affiliation, or other third-party interfaces like Weidian. You can just plug these in and go,” explains Jonathan Smith, chief executive of Hot Pot Digital, a digital marketing agency specialising in the Chinese market.

Read the rest of the story here.

Here’s what you should know today.

1. Singaporean fintech startup 4xLabs secures $1.5m for global expansion

Dymon Asia Ventures participated in the financing, following up on its earlier involvement in 4xLabs’ $1 million seed round.

The fintech startup develops currency exchange software for financial services companies. It says it will use the investment to fund product development and global growth.

Since launching in 2011, 4xLabs has released Get4x, a location-based exchange rate aggregator that lets travellers compare rates offered by nearby licensed money changers, rather than using official exchange rates provided by banks.

Get4x is currently available in 13 cities across territories including Australia, Hong Kong, Indonesia, Macau, Malaysia, Singapore, Thailand, and the United Arab Emirates.

Read the rest of the story here.

 

2. Local ecommerce still king for Indonesian shoppers: Report

A recent report by ecommerce aggregator website iPrice finds that local businesses are still dominating the list of the most visited ecommerce sites in Indonesia.

“Based on our observations, we believe this is because all local players always try to play with the society’s emotions when it comes to their products, promotions and campaigns,” said Andrew Prasatya, iPrice Indonesia’s senior content marketer.

Read the rest of the story here

 

3. Recommended Reading: SingPost stock takes a hit for bad $170m ecommerce deal

SingPost, in its recent announcement, says the board formed an independent committee to review the circumstance of the TradeGlobal acquisition. It will seek legal action if necessary.

A new group CEO, Paul Coutts, is supposed to take charge in June.

Read the rest of the story here.

Here’s what you should know.

1. BBM parent Emtek boosts payments tech with 2 acquisitions

 Indonesian media conglomerate Emtek, which develops the popular Blackberry Messenger (BBM) app in the country, has snapped up shares in payment companies PT Espay Debit Indonesia Koe (EDIK) and Doku.
Emtek plans to develop BBM into a versatile ecosystem for shopping and services
Both EDIK and Doku own emoney and money transfer licenses from Indonesia’s central bank, which are necessary for ewallet services that let users send money to peers and cash out.

The deal comes on the heels of Emtek’s plans to develop BBM into a versatile ecosystem for shopping and services, similar to Tencent-owned WeChat.

Read the rest of the story here.

 

2. SingPost revenue rises 17.1 per cent for the full year, net profit falls 86.6 per cent on impairment charges

Revenue for the year rose 17.1 per cent to S$1.35 billion, mainly from the inclusion of SingPost’s US ecommerce subsidiaries.

Net profit attributable to equity holders decreased 86.6 per cent to S$33.4 million, reflecting a 24.7 per cent decline in underlying net profit and exceptional items.

Mr Simon Israel, Chairman of SingPost, said, “It is unfortunate that such a significant impairment to the TradeGlobal acquisition has to be made so soon after the transaction. A turnaround plan is being executed with the objective of recovering as much value as possible for shareholders.”

Read the entire report from SingPost here

 

3. Recommended Reading: Is the Amazon effect overrated?

“In speaking with a few retail CMOs at the Forum they told me that Amazon can never duplicate one of the biggest things brick & mortars have going for them: the in store experience. To a person they all believe that there’s nothing that can substitute for that real life, person-to-person exchange.”

Read this post by Steve Olenski, Forbes contributor here