The Demise of Home Delivery?

I can’t help but feel today’s announcement that Amazon will offer collection from Post Offices is the tipping point for home delivery – actually for its demise. It seems logical to view home delivery as a critical mass. There needs to be a minimum density of deliveries per mile per day to justify the running of the vehicles, the staff, the infrastructure. If the deliveries for a parcel company are too far apart, the costs must go up and home delivery loses appeal. It’s a self-perpetuating route to failure.

Couple this with the sheer inconvenience of home delivery – taking time off or avoiding leaving the house to wait for a parcel seems ludicrous. I’ve encountered many businesses which ban employees from sending parcels to work. Home delivery is, in many ways, inconvenient.

Just yesterday on BBC News two ‘click and collect’ business owners were interviewed. Both companies operate those lockers you sometimes see next to supermarkets and in petrol stations. A code on your mobile phone unlocks the right door and your package is revealed. Business is booming, and growth rate is impressive.

All of this is eating away at the delivery companies’ model, and in a substantial way. Again, a critical mass model will fall apart when that mass is no longer maintained – i.e. when enough people switch away from home delivery – and the model spirals into unsustainability.

There are clearly opportunities remaining for home delivery companies: B2B and rural locations are two that come to mind, although I suspect prices might rise for both. For the rest of us, the appeal of picking up our packages at a local Post Office (or increasingly it seems, the Co-op) at our convenience must surely be greater than waiting for the parcel to come to us..