Most online shoppers know the pain of finding a “sorry we missed you” slip on their door and, adding insult to injury, having to trek to pick up their package at an inconvenient location with a limited pickup window.
Far from being a simple frustration, these “failed first attempt” deliveries can wind up costing businesses and consumers alike. Unattended parcel theft has happened to nearly 20% of Americans multiple times per year, according to a 2017 study. With the reported average value of each parcel stolen around US$140, the cumulative value of these thefts add up to over US$5.6 billion.
A Canadian company, however, has developed a technology that can help combat porch piracy and simplify the delivery experience for consumers and retailers alike.
PUDO Inc (CSE:PUDO) is developing North America's only carrier-neutral parcel pick-up/drop-off application and logistics network through a series of what are called PUDOpoint Counters strategically located inside corner stores throughout the region.
The idea was born out of CEO Frank Coccia’s nearly 40-year career in the logistics sector. Coccia was inspired by small-scale operations in the United Kingdom where local convenience stores serve as pickup points for parcels and set out to bring the model to North America’s $550 billion eCommerce sector.
“Originally we started with courier companies, but each of them wanted their own tied, or closed, network,” PUDO’s Coccia told Proactive in an exclusive interview. “We got pulled in different directions and I realized the model had to change.”
Courier companies traditionally haven’t spent money to develop their own counter networks, although this is starting to change. But therein lies PUDO’s competitive advantage.
“By having a network owned by a carrier, the consumer is tied to its delivery services and its network in order to use its counters,” Coccia explains. “If I can make the retailer from whom the consumer has ordered product, my partner, the consumer can decide where the shipment goes. All we’re doing is providing a port where the packages can land for convenient pick-up or return.”
North American network
Today, PUDO has nearly 900 PUDOpoint Counters embedded throughout Canada and a further 1,500 registered for activation. In the US, the firm has about 3,500 of 25,000 targeted locations ready to activate as PUDOpoint Counters.
These PUDOpoint Counters translate to dollars for PUDO, which derives its revenue from a number of logistics services streams. The streams relate to particular delivery or return scenarios which may include direct to PUDOpoint Counter delivery (consumer chooses PUDO as their home-away-from-home address); re-direct (nobody at addressed residence) to PUDOpoint Counter delivery; courier client-directed regional or community consolidation of parcels; and PUDOpoint Counters staging of parcels for return to regional warehouse or retailer.
PUDO’s wide network is paying off in the form of revenue growth. For its fiscal year ended February 29, 2020, the company saw its revenue jump 34.6% year-over-year to C$1.1 million on the back of increasing parcel volumes and new services. While failed first attempts have historically made up the bulk of the revenue, it is retail returns that could prove more profitable in the coming year.
Under PUDO’s solution, the consumer receives a return merchandise authorization from the retailer and selects a PUDOpoint Counters location for parcel drop-off from the retailer’s return portal. PUDO get paid to receive the parcel and arrange for its transportation back to the store.
According to Coccia, the returns game is a big market. “We’re going to see a lot of our revenue growth come from returns,” he says. “The retailer pays for the return. It’s the only time we decide who the courier is – essentially, we manage the courier, and that is a logistics industry last-mile game changer.”
PUDO’s model has snagged the world’s largest eCommerce retailer as a partner. As an Amazon Hub partner, the firm recently completed a 14-state pilot project with the online retail giant that saw 30 PUDOpoint Counters locations appear in the Amazon check-out as a suggested parcel delivery option. After a successful deployment, the Amazon program will expand to more PUDOpoint locations across the United States.
“If a convenience store or small business wants to become a part of the Amazon Hub program and Amazon can validate the need to activate a new counter in that location, we are notified and, assuming the applicant meets our criteria, we can then qualify, train and activate them very quickly,” Coccia says. “We do this on Amazon’s behalf but we do it by making them part of our PUDOpoint Counters network. Once activated, the new PUDOpoint Counters can start receiving Amazon packages, and through our PUDO app, they can start receiving other courier partner packages as well, and use the app for returns.”
PUDO’s vast open network and consolidation model allows it to optimize and implement efficiencies costs, which offer customers prices that are up to 30% lower than any carrier, including the post office, which according to Coccia is game-changing also.
For shareholders, PUDO’s model is starting to pay off in the form of revenue growth. A large part of what drives Coccia, however, is the sense of community that PUDO can help to create.
The company has initiated a national campaign called GiveBack Canada, to connect Canadian charities that have seen their supply chains disrupted by the coronavirus (COVID-19) pandemic with people who are able to make donations. To participate, people can donate boxes of gently used clothing and footwear by printing out a free shipping label on GiveBackCanada’s website and dropping the boxes off at a participating PUDOpoint Counters location.
PUDO prides itself on its innovative and important role in helping to increase foot traffic to small businesses and local convenience stores. “We’ve built our network with local Mom-and-Pop shops as an alternative to large corporations because the flexibility is there and the customer experience is better,” Coccia explains. “They value the foot traffic coming in, especially if it’s their neighbor. That’s a win to them.”
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