Addressing the Issue of Missed Parcels in Online Shopping

Introduction

The development of the internet has no doubt impacted the ways in which humans engage in different activities all across the globe. Activities such as communication, travel, and transport, as well as business, have been significantly impacted by the development of the internet. Among the major trends experienced includes online shopping, which is gaining popularity and usage at a rapid rate given its benefits such as efficiency, flexibility, and the convenience it offers the customers. The business-to-customer (B2C) business model is one of the significant parts of online business. Regardless of the significant increase in the number of e-shoppers over the years, not many effective strategies have been developed to be able to address the prevalent loophole in the delivery system. As such, keeping up with the rising demand for delivery of products and parcels for online businesses presents a significant challenge considering customers missing their parcels because of different reasons.

TML parcel solutions founded in January 2014, specializes in innovation and developing innovative ways towards the solution of such problems. In a persistent dedication to resolve the most common problem in the courier Services, missed/undelivered parcel, the company has developed ideas towards the production of self-service lockers which should be quite an effective solution and one that the majority of the customers are likely to turn to in order to avoid the underlying frustrations in delays in receiving their parcels. Based on recent audit numbers, the company based in UK registered a turnover of about 3.5 million pounds in the last financial year and a net profit of 1.5 million. This highlights their practical and innovative capacity. In addition, TML solutions innovation team ensures simplification of all the crucial processes to capture new ideas and incentivize employees.

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Identification of the problem/inconvenience

The increasing online shoppers highlight an increase in the volume of products and parcels to being delivered and therefore justify the requirement of a delivery system for the parcels. When the customer is not available to collect the parcel at the delivery time for whatever reason, a problem is created in two forms for the customer as well as for the company

Customers

Currently, there are a large percentage of parcels that are unable to be delivered due to several factors such as people working, occupants not hearing the door, delivery man simply not waiting around for the occupant to make their way to the door, neighbors not accepting the parcel or also not being home to receive the parcel themselves. This issue becomes a massive inconvenience to the customer as they now must wait for a redelivery attempt, or they must collect the item from the delivery depot, whichdepending on the location, can be some distance from the home and thus present an inconveniencing problem.

Companies:

Delivery companies are also presented with a problem. Due to the fact the first delivery attempt has not been successful, they must reattempt the following day, which is not an efficient use of resources. Reattempts come at an additional cost to the delivery company, which eventually impacts the income and thus,the profitability of the company. Introduction of the self-service lockers is likely to deliver outcomes such as

Accessibility: One of the major conveniences of this locker is the easy accessibility that it has to offer. Irrespective of the time, the users can access it whenever they want 24/7. The digitally connected parcel lockers ensure that the consumers are able to pick their respective parcels anytime, according to their convenience (Spears et al., 2017). Hence, even if the receiver is not physically present when the delivery was made, one can collect it as per their flexibility. Thus, having more control over the accessibility of their own parcel is likely to be a welcome change that the majority of the customers would appreciate in an effective manner.

Security and simplicity:The lockers in context are expected to be next-generation, which are likely to be outcomes of the rapidly developing technology. These lockers will be designed in a manner which would not only prevent break-ins or vandalism of any kind but also be able to withstand any adverse weather condition with its durability. In addition to this, the security system which would be installed in the lockers would be responsible for the physical security of the items which would be inside the parcels. In addition to this, these smart-lockers are likely to be easy to use as well. The processes of automated parcel lockers are expected to be more convenient, as well, Confidential passcodes and OTPs (A one-time password) will be required to be put in the locker systems, which the recipients will have access to (Irwin et al., 2019). Thus, it may be more convenient for customers to enjoy overall security effectively.

Enhanced consumer experience: As per the dimension of product advantage, it has been significantly focused that the unique benefit of the customers should be one of the primary focuses for any of the new products. In addition to this, aspects like relative perceived superiority, relative perceived quality, and solution to customer problems are required to be addressed by the products, which are being thought about.

One of the decisive factors for coming up with the idea of this product and anticipating its substantial success is the highly likely increased customer experience. According to Fee (2015), approximately 70 percent of the online shoppers believe that traditional deliveries are required to be done on weekends, which would ensure that the chances of missing out on essential parcels are reduced significantly (Irwin et al., 2019). In addition to this, it is also suggested that more than 40% of the customers are likely to increase their frequency of online purchases if there is a proper improvement in the delivery systems. In regards to these figures, it may be stated that the retailers may have higher opportunities for sales if the current grey areas of the supply chain are addressed by altering the traditional delivery services and coming up with convenient alternatives as such.

Opportunity Identification

These problems in the online business sector present a business opportunity that can be filled by the development of a self-service locker that is installed in residential homes for each resident from where parcels can be dropped by the parcel company and collected by the consumer at the convenience of both parties.This opportunity is further supported by statistics that show a predominant increase in online shoppers and therefore, parcels to be delivered, pointing out the availability of a significant market. According to Pitney Bowes’s annual Parcel Shipping Index, parcel volumes rose by 17% to 74.4 billion parcels in 2017, up from 63.6 billion in 2016, and are expected to surpass the 100 billion mark by 2020. In consideration of the concentrated shipping of parcels during the festivities in North America and Europe, the deliveries of parcelsbecome a challengein addition to missed parcels make the problem even worse and potentially involving a backlog requiring extra time and resources to correct.

Several other opportunities in the market that could be filled by the development of such an innovation are also identified including £22.9 billion spent in online businesses in the UK in first half of 2009 translating to 820 million parcels delivered in UK households with internet access (IMRG) which highlights a significantly large enough market for the innovation. Also, According to the National Statistics (2018), up to 69% of shoppers now shop from home, translating to up to 11m Britons who shop from home at least twice a week (Shopzilla.co.uk, 2018). However, there is an increase in failed or missed deliveries which present a problem. According to the BBC (2019) In the UK 12% of deliveries fail the first time, costing the industry an estimated £1bn in re-deliveries. Missed-delivery problem not only costs money but also impacts infuriating customers which limits the consumer experience.

Market Research

The market research including an analysis of the business opportunity and the services offered by the innovative product including an evaluation of the products SWOT analysis the various benefits in terms of strengths with which the product offers over the traditional processes as well as the weaknesses and challenges that may be faced in its implementation are outlined.

For customers

Offers a convenient solution to both customers and delivery companies to reduce missed deliveries

Secure product

Reduces costs delivery companies incur through redelivery attempts

More secure than products already in the market

Secure in-home deliveries without opening the front door

Instant notifications alert homeowners when packages arrive

Weatherproof lockers protect packages from harsh wind, sun, rain, and other natural elements

Live 24/7 access for Customer

Lockers can be customized to complement exterior home aesthetics

No paperwork involved,i.e. signing

For carriers;

More cost-effective as the operational cost can be shared been logistics actors using the lockers

This model means that delivery is successful in the first attempt, as such carriers are able to save redelivery time and cost.

There is a direct interaction between logistics actors on the supply side final customers

More sustainable reducing fuel omissions as re-delivery attempts will be reduced

Weakness

The initial cost to purchase a locker/rent (Depending on the route taken)

A limited number of parcels can be deposited

Opportunities:

Parcel lockers to address capacity issues. To make them viable, expandable to accommodate customers with a choice of parcel sizes.

To corroborate with construction companies and have built-in parcel lockers on new buildings or sites.

Expand the target market by potentially targeting construction companies to install the parcel lockers during construction and offer the product as a part of the sales package.

Potentially develop a product that can be used in residential buildings without concierge facilities.

Make the product more user-friendly with the development of technology

Threats:

There are similar products already in the market in the form of collection lockers as mentioned above.

Extended delivery hours allowing customers to select delivery times convenient for them.

Delivery on Sundays being introduced by major delivery companies

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Innovative opportunities

With regard to the highlighted problem and opportunity, a solution is proposed in the form of self-service lockers, which are to be bought by customers and fixed in their residents much like the personalized postal boxes. With the help of an online survey, the significant issues and challenges that the users face while receiving their online parcels can be noted down, along with the alternatives which they would prefer to be suitable. Designing the locker will, as such, be on the basis of the needs and requirements highlighted from the survey of the customers that are likely to enhance the overall scope of the products to sell. With high chances of their necessity to be fulfilled and better security, accessibility options, these lockers are likely to be adopted by the consumers in a bid to enhance their convenience of receiving parcels.

In regards to the stated idea of the personalized parcel lockers, theres a high likelihood that the customers will turn towards these alternatives in order to ensure that not only are they able to receive their products effectively, but also they are able to attain a relatively better scope to maintain security. Hence, instead of being an expediture, personal lockers are likely to be regarded as investments. In addition to this, the installation of the product as such is likely to give them options of not being dependent on local lockers, which are used by large numbers of individuals. Thus, the chances of selling this product are high (Bstieleret al., 2018).

Innovation capability

To be able to achieve the desirable results and resolve the major issues of missed/undelivered parcel, the TML parcel solutions team has identified the above opportunity and prepared a detailed study and plan for the design and development of the end product, the self service lockers, as well as a plan for accelerated innovation and diffusion processes.

The team consists of several skilled and dedicated innovation members from different professional backgrounds. Furthermore, All the hierarchies and departments within TML parcel solutions are involved with the complete process of innovation. The team is quite capable of assisting in the process of establishing a balanced structure by offering the necessary parameters and systems for the company to function and keeping the field open to generate and share various innovative and creative ideas. The team roles and responsibilities are as highlighted:

Idea maker (Visionary), is involved in the initiation of the innovation through providing the initial idea or design for which the dedicated team members then helps in developing and building to a functional product. The individual has a previous background working for Royal Mail as a business developer and is infact responsible for identifying the problem with the parcel delivery.

The Idea Manager is a team of three managers “TML” who will take the responsibility to coordinate the implementation of the proposed idea. Also, the team focuses on adding value to the organization by listening, observing, analyzing and challenging in order to make a significant impact on the innovation.

The Idea Installer, TML Parcel Solutions employed a senior mechanical and software engineer with creative insight, to look after designing and developing the app software and lockers accordingly. The idea installer also communicates with the Chinese factory responsible for the manufacturing to ensure achievement of the desirable product outcomes.

The Idea Coaches, who play the key roles in supervising the whole operation to deliver the product and support the idea creation. In addition the Idea coaches provide the best resources when it comes to the feasibility of proposed ideas.

The marketing team promotes the product, drives sales. And also provides essential research in identifying target customers and other audiences.

The finance team manages the money in the firm during the process of production by splitting the responsibilities into accounting, reporting and strategic financial structures for management

Other resources involved in the process of delivering the product include:

The Chinese manufacturer who will construct the parcel locker in addition to the hardware of the digital lock and solar panel

UK mobile networkas “EE networks” who will provide Gsm Sim Card to install within the parcel lockers in case of wifi unavailability.

Risks and rewards

While the product provides an effective way of avoiding missed/delayed parcels and also designed to be quite secure and safe for the delivery of parcels, it still presents a couple of risk factors which needs to be taken account of. Some of these may include:

System Vulnerability developing a self service locker product fot the consumers indicastes the development of a new delivery system which brings with it new challenges and old that may still impact the process. for instance misplacement of parcels may be on the rise given that customers do not have to sign upon delivery and confirm that the contents of the parcel belong to them.

The security of the delivered parcels may also be significantly processed. Digitization of the locks exposes it to all the technological security risks including hacking and malware that can be used for a wide range of reasons including theft and ransoming. In addition, if the customer is not expecting the deliveries, a window is opened for which parcels can be stolen without a trace or knowledge of the customers.

However the new system of self service lockers definitely reaps a wide range of benefits and rewarsa including convenience of delivery for both the the company and the customer. It also enhances flexibility of delivery, definitely increases security of delivered products and eventyally saves delivery companies the cost and time of redeliveries.

Conclusion

The online domain has led to the development of a wide range of business opportunities as well as the transformation of the already existing businesses leading to the development of new opportunities which can be innovatively created not only to enhance revenues but also to make the business process more efficient and effective both for the buyers and the sellers. Parcel deliveries are among the areas inthe business that are impacted by a major problem of missed deliveries and subsequent redeliveries, which impact increase in costs as well as time spent,subsequently inconveniencing both the customer and the delivery companies. The emergence and rapid growth of online businesses further complicate the problem through exponentially increasing the volume of deliveries in a limited period of time. The innovation opportunity selected comprising of the development of self-service lockers significantly impacts both the customer and company through enabling efficient and convenient delivery of parcels to different consumers. Given the availability of the lockers, deliveries can be made at the convenience of the companies schedule and plan and received by the consumer at their convenience, significantly minimizing the cost of and time of redelivery and inconveniences to the consumer. The lockers further impact increased consumer experience, accessibility as well as simplicity, and security.

References

Baxter, M., 2018. Product design. CRC Press.

BBC. 2018. The problem of Missed Parcel deliveries. Available at

Bouncken, R.B., Fredrich, V., Ritala, P. and Kraus, S., 2018. Coopetition in new product development alliances: advantages and tensions for incremental and radical innovation. British Journal of Management, 29(3), pp.391-410.

Bstieler, L., Gruen, T., Akdeniz, B., Brick, D., Du, S., Guo, L., Khanlari, M., McIllroy, J., O'Hern, M. and Yalcinkaya, G., 2018. Emerging Research Themes in Innovation and New Product Development: Insights from the 2017 PDMA‐UNH Doctoral Consortium. Journal of Product Innovation Management, 35(3), pp.300-307.

Du, S., Yalcinkaya, G. and Bstieler, L., 2016. Sustainability, social media driven open innovation, and new product development performance. Journal of Product Innovation Management, 33, pp.55-71.

Fee, K.A., Florence Manufacturing Company, 2015. Electronically controlled parcel delivery system. U.S. Patent Application 14/063,080.

Gumusluoglu, L. and Acur, N., 2016. Fit among business strategy, strategy formality, and dynamic capability development in new product development. European Management Review, 13(2), pp.107-123.

Irwin, D.E., MCKENZIE, N.K., Tartal, W.A., Stephen, V.K. and Amato, M.J., US Postal Service (USPS), 2019. System and method of control of electronic parcel lockers. U.S. Patent Application 10/281,931.

Leenders, R.T. and Dolfsma, W.A., 2016. Social networks for innovation and new product development. Journal of Product Innovation Management, 33(2), pp.123-131.

Orenstein, I., Raviv, T. and Sadan, E., 2019. Flexible parcel delivery to automated parcel lockers: models, solution methods and analysis. EURO Journal on Transportation and Logistics, pp.1-29.

Spears, M.L., Dewnandan, J.L., Irwin, D.E., Shenhar, J. and Tartal, W.A., US Postal Service (USPS), 2017. Indoor parcel lockers. U.S. Patent Application 29/539,926.

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