Online giant Amazon is set to buy up the remaining 75% stake of French delivery company Colis Privé. The deal is set to be completed in the next two months.

Amazon bought a 25% stake in the French delivery company in October. The online giant is well known to be investing heavily in stakes in delivery companies across Europe as it seeks to control the delivery side of its business. Amazon is known to be having issues with US delivery company UPS that has struggled to meet demand during busier periods. This could be a serious threat to the US company, that also delivers Amazon goods to customers in Europe, as UPS revenues from Amazon alone are said to be in the region of USD $1 billion annually.

Amazon bought a 4% stake in UK delivery company Yodel and has been quietly expanding its in-house delivery network in the UK. In France, its likely buy-out of Colis Privé, a national home delivery company, would give it access to a network that covers most of the country. It has reassured other customers of Colis Privé that the delivery company would continue to serve them as well, even while under the control of the Amazon brand.

Industry insiders see that delivery is a major new interest of Amazon but are split in their views of whether the company is set to bring all its delivery business in-house in Europe and the US or how things will pan out overall. Major delivery companies such as Royal Mail will be watching closely as in losing Amazon there could be significant losses incurred. Indeed, on Friday Apex Insight reported a major London stockbroker marking Royal Mail shares as ‘Sell’ in part in recognition of Amazon’s bringing much of its delivery business in-house and due to the national mail operator’s exposure to that single client.

As customers we are used to reviewing restaurants or online shops. One thing that hasn’t been done in the UK is online e-commerce companies rating their deliveries to their customers – a delivery company feedback system. French e-commerce logistics specialist ITinSell is about to launch just a system called QSbenchmark in the UK after a lot of success in France.

When a company such as Yodel proudly says it has an 83% customer satisfaction rating (as reported by Apex Insight today) one can immediately see that this poorly compares to many eBay or Amazon marketplace sellers who rely on much higher satisfaction ratings in order to trade successfully on those forums. If 17% of customers found fault with an Amazon marketplace seller, Amazon would start asking questions!

Philippe Bailly, international and partnerships director at ITinSell said that a new rating system for delivery companies would fill a major gap in the market: “We are used to rating sellers on EBay and Amazon, providing scores for our restaurants and measuring customer satisfaction on e-commerce sites, but this is the first benchmarking tool to be developed that really measures delivery service levels … For a customer, the moment when they finally hold their purchase in their hands is the most important part of the shopping process. Yet in the retail industry we have been lacking the data to be sure that we’re always making sure that happens as best it can.”

The QSbenchmark was first developed in 2013 in cooperation with logistics company Colis Prive and has since been adopted by a number of other French carriers and e-commerce brands. Companies that contribute to the scheme can get live feedback as to how they they are doing, both within their delivery business and against competitors in their region and ultimately across the whole of Europe.

Whether this will improve satisfaction ratings to above the 95% mark (leaving 1.1 million parcel deliveries rated as lower than satisfactory in Yodel’s case of 22 million parcels) may take some trying, but schemes like this could make end customer satisfaction considerably higher than it is today!

Online shoppers are increasingly using click and collect services, with a quarter of those surveyed by YouGov saying that they will use the system even more next year. This year however there have been real problems in getting the goods to the customer.

According to a survey conducted by YouGov on behalf of JDA / Centiro, 41% of online shoppers used a click and collect service over Christmas 2015, up 2% from the year before. 24% of those who used it said that they would use the service more often this year than before. 56% said that they use the service to avoid delivery charges.

As with almost all new services, the more a system is used, the more fault that is found with it. 31% of customers complained that there was no dedicated place in shops for the click and collect service. The same proportion (31%) found that they had difficulty finding the correct member of staff to get their items. 24% found that staff had difficulty locating their parcel or could not locate the item at all.

A statement from JDA said, “33% of online Christmas shoppers stating they had experienced issues with their purchases (an increase from 31% the previous year).  Of those shoppers that had encountered any of the problems listed, 48% had suffered from late deliveries or never received their goods; a further 48% had suffered from missed deliveries including when they were at home. Unsurprisingly, more than three-quarters (77%) of Brits online said they would be likely to switch to shopping with an alternative retailer next Christmas as a result of a poor online Christmas shopping experience.” This loss of customers is fairly typical of other studies into online shopping habits, which generally say that a company has at most, two tries to get it right before losing a customer due to a poor shopping experience at any time of the year.

Jason Shorrock, VP of retail strategy at JDA said of the findings, “Shoppers are showing a growing preference for ‘Click & Collect’ as it offers them the convenience they crave and it is vital that retailers get it right. However, without the effective management of staff, stores and inventory, retailers risk damaging customer relationships.”

The festive period of 2015, launched with the Cyber Weekend in November, was one of the best ever for delivery company Yodel. The company handled over 22 million parcels over the 8 or so weeks in question. In preparing well for the projected spikes in demand so it achieved good customer satisfaction ratings.

Customer satisfaction was higher than 2014, with 83% of customers surveyed rating their delivery experience as positive. In 2014 by comparison, due to poor communication from their online shopping client companies, this was far lower as the company struggled to meet the unprecedented demand of an unplanned Black Friday.

Dick Stead, Yodel’s executive chairman, added: “Our customer satisfaction levels have continued to improve in line with service performance and it’s particularly pleasing to see them hit record highs at our busiest time of year.”

Ahead of Black Friday 2015, Yodel had spent time with client companies to try to get accurate projections of parcel throughput and these appeared to be accurate. In addition, the delivery company gave its client businesses strict next day delivery limits to avoid chaos in the last mile of the supply chain. The unprecedented spike in demand for online shopping was well prepared for and went by without any major hitches.

Keith Basnett, Yodel’s chief operating officer said: “Our focus for peak 2015 was on service and delivering a fantastic customer experience and we’re delighted that our efforts are reflected in the positive feedback received from consumers.”

Yodel is one of the first delivery companies to report back on its festive period, and seems to have done very well this year. With growth almost certain in the online shopping industry and spikes in demand fairly well predicted, there should be few surprises from the company’s e-commerce clients, or few that will leave the delivery company flat on its back…

After a successful pilot project where 20,000 items were sent from business customers trialling the new scheme, Lithuania Post is to launch an ‘e-self service’ system to all its business customers.

Under the new system, businesses will be able to print their own postage labels and ‘stamps’ that they will be able to stick on their parcels and then these can enter the postal system just by passing the item to a member of Lithuania Post staff.

According to Mikas Jovaišas, the Head of Business Development Department in Lithuania Post: “The operating principle of e-self service is simple: the business customer has to enter the necessary data online and affix a special printed sticker on the outgoing postal item. Such a postal item only needs to be handed to the postal worker serving the company or organization, or presented to a post office to be sent. It is a more flexible, convenient and faster way to use postal services.”

Such schemes are relatively new in Europe, with Royal Mail recently launching a similar system in the UK with its 3D barcodes. For businesses that use the mail system heavily, this can save a lot of issues down the line, as well as saving money by not requiring someone to have to go to a post office to hand their parcels over as well as pay for them.

In a statement from Lithuania Post the company said, “We have started to prepare in advance, in order to ensure a smooth e-self-service functioning. We have been asking our customers’ opinions and we keep improving this electronic service in order to meet customer needs. In the course of a few months, over 20,000 self-prepared postal items have already been sent. We are glad that the customers who had experienced e-self service were satisfied with it and are planning to continue sending items by themselves.”

Major City stockbrokers Liberum have advised investors to sell their stock of Royal Mail. The company believes that the massive growth in e-commerce will not benefit the UK postal operator as much as it will operators and that the business is overstretched on a number of fronts.

The mail operator is set to see a decline in mail volumes that the stockbroker do not believe will be offset by growth in parcel volumes. Though Royal Mail has invested heavily in capacity for its parcels business and has a well established national delivery network, it is felt that Royal Mail’s competitors such as DPD, UPS, DHL and Yodel are better placed to benefit from the double digit growth in this industry.

One of Royal Mail’s major customers, Amazon, is developing its own final mile delivery market in the UK. With Amazon’s parcel volumes passing through the Royal Mail system accounting for as much as 35% of its total, this could be a serious threat to the national mail operator. Where Amazon’s delivery network isn’t comprehensive in the UK as yet, it is expected to grow significantly in the coming year or so.

Liberum has acknowledged that Royal Mail is undergoing a cost cutting drive but this, the stockbroker believes, will not be offset by the projected loss of business in the mail sector or Amazon’s gradual withdrawal.

Royal Mail’s pension fund is in deficit and some time soon it will either have to make a one off payment to compensate for the deficit or renegotiate the pensions with its heavily unionised staff.

Finally, with the recent privatisation of the mail operator, there is some uncertainty as to how the regulator OfCom will regulate the company. This uncertainty is bad for investors at present, and could get worse should another company attempt to go into direct competition with it in a newly liberalised market in the coming months.

UK credit card company Barclaycard has released its analysis of shopping trends in the festive period of 2016. Though total retail spending grew by 4% year on year this belied a change in shopping habits. Where online retail grew by 17.9%, high street shopping increased by an almost statistically insignificant 0.2% as against the festive season of 2014.

Online sales accounted for almost a quarter (24.6%) of total spend this year and have grown faster than any period since 2012. Almost every company in the industry is expecting this change to continue with delivery companies making significant investments in capacity and larger retail companies, notably Argos and Amazon, showing signs of bringing their delivery operations in house or extending them significantly.

Major department stores seem to have done better than almost any other high street operation, with in store spend growing 4.5%. Those department stores such as John Lewis with a strong online operation saw their revenues increase significantly, with this element of their revenues increasing by over 18%. Apex Insight reported John Lewis results earlier this week which reflected this trend.

Barclaycard stated: “Supermarkets witnessed a similar story: although in-store spend fell 0.7% in December, a boost of 13.5% to online sales meant the category was flat overall year-on-year. Average transaction values at supermarkets fell 4.8% overall as consumers continued to pursue value from their grocery shopping.”

Chris Wood, Chief Operating Officer at Barclaycard, said of these trends, “In many ways, this Christmas brought to the fore all the shopping trends of 2015. The large spikes in spending, centred around sales days like Black Friday, emphasise consumers’ increasing search for value as they hold back their spending until the best deals emerge. Likewise, whilst online shopping has grown in popularity throughout the year, the strength of consumer preference for digital over the high street was seen in full effect over the Christmas period. As retailers continue to release their Christmas trading updates we expect many to reflect these changing behaviours.”

The European Commission (EC) has given unconditional approval to the takeover bid by FedEx of the Dutch international delivery company TNT. While this is seen as one of the biggest hurdles to get the deal there are still some countries’ antitrust commissions that have yet to give the go ahead. China’s recently created competition authority is known for going slowly over such deals and may well be the last to approve, though insiders at FedEx believe that all necessary approvals will be given in the early part of this year.

The EC has turned down an attempt by a US international delivery company to buy TNT before, finding that UPS had too big a footprint in the EU in 2013 and refusing the $7 billion takeover bid. By comparison, all other competition bodies are considered a relative formality.

Where FedEx only delivers international parcels to European clients, with TNT’s infrastructure it will now be able to trade within countries’ boundaries and thereby become the third largest international delivery company in the economic and political bloc.

Europe’s Competition Commissioner Margrethe Vestager said of the deal, “The conclusion is that European consumers will not be adversely affected by the transaction.” 

David Binks, president of FedEx’s European operations said of the news, “We are extremely pleased to receive the European Commission’s unconditional approval.”

Where there is an economic slowdown in the delivery market in the US, deliveries to customers around the world are increasing at a considerable rate led by the e-commerce industry. In buying the European company, FedEx should compensate for economic problems at home by tapping into what is a growth market where delivery companies are investing heavily in infrastructure ahead of what many see are boom times in getting parcels the final mile to customers around the world.

It has been reported that Amazon is looking to set up an in house delivery network in Germany. With some companies’ parcel volumes from Amazon being as high as 35% of their total, this could be a significant threat to the parcel delivery business as a whole in the country.

It is reported that Amazon has been looking at taking over a distribution centre in Olching near Munich, which would serve the major city. German media is reporting that Amazon is setting up a distribution network to serve major cities in Germany. Bernd Schwenger, a manager of Amazon.de, is reported as saying that this would be to add flexibility to the company’s delivery options, and that it would still work with the delivery companies it currently does business with.

Industry analysts say that should Amazon take all of its delivery business in house it could seriously impact the e-commerce delivery business throughout Europe. A report published last year suggested that Amazon accounts for as much as 35% of some delivery businesses’ parcel volumes.

Amazon has invested in a number of delivery companies across Europe, notably Yodel in the UK after one of its major delivery companies City Link went bust in 2014. The report, Amazon’s move into Delivery and Logistics, suggested that with the major investments in fulfilment centres around the world, there is only so much investors would allow. Buying in massive fleets of vehicles and distribution centres would cost billions of Euros and this would probably be a step too far for its investors.

Amazon has been trialling an air freight service across northern Europe and domestically in the US. Though some suggest that it won’t take the leap there are signs that it may just be doing what industry insiders say is unlikely…

A study by US analysts Retail Systems Research has suggested that transparency is one of the most important factors in staying on good form with customers.

The report, Home Delivery: Retailers’ Brave New World, contains “analysis of the business drivers, opportunities, and organizational constraints surrounding retailers’ home delivery strategies. It also offers baseline recommendations for navigating consumers’ unrealistic expectations around the cost and speed of home delivery.”

The report that was sponsored by Descartes suggested to retailers that are looking to improve their home delivery performance, “The more consumers feel engaged in the process, the more comfortable they will be in ordering from you.”

The report said that giving detail throughout the delivery process will boost customers’ confidence in your processes. It suggested, “Pre-delivery notifications are an excellent start, but any way that retailers can find to use delivery-related information to improve the home delivery experience will ultimately pay off in the end, whether that is in increasing confidence around narrow delivery windows, adding new delivery-related services, or heading off customer service calls before a consumer ever knows something has gone awry.”

The report, that was published in November, covers a number of elements of the home delivery process including free delivery and the issues around expedited delivery as well. Overall it concluded that while customers are increasingly getting used to home delivery as e-commerce matures, they still need to be reassured throughout the process that their goods are on their way and will be delivered by a certain time. In the UK, a 93% on time delivery rate is seen to be ‘good’, meaning millions of parcels don’t reach the customer on time, so such reassurances if accurate could well offset the ire of the customer when their goods haven’t arrived on time.