DHL eCommerce: Bringing Consumer Choice to the Forefront
The rise of digital markets or “e-commerce,” has revolutionized the way goods are bought and sold throughout the world. It has allowed SMEs an opportunity to compete with larger retailers on the world stage. Customers can buy what they want, when they want, where they want, and from whom they want. The options for payment and delivery are all in the hands of the consumer. If you compare that to other areas in logistics, it’s not typical that the consumer plays a great role. Shipping a container is a business choice, and once the order has been placed it’s out of the consumer’s hands. The rise in consumer choice has led to more businesses, like DHL, creating entire new divisions within the company to handle the growth of the e-commerce market.
AFL recently sat down with three DHL eCommerce executives to discuss their thoughts on this ever-growing industry: Mr. Thomas Kipp, CEO, DHL eCommerce, Mr. Malcolm Monteiro, CEO, Asia Pacific, DHL eCommerce and Mr. Kiattichai Pitpreecha, Managing Director, Thailand, DHL eCommerce.
Customer Driven Focus
“The fundamental change that e-commerce brings is the increased relevance of consumer choice,” said Mr. Kipp. “In our view, the key to understanding e-commerce is that it’s consumer centric. About 10 years ago, we were already engaged in building an ecosystem on the delivery side that is clearly centered on consumer requirements for our services in the e-commerce sector. While the other divisions in DHL may be more B2B focused, we found it important to create this separate division for e-commerce. There are connections to other divisions, but clearly what drives our thinking is the consumer requirements.”
Giving Choice and Flexibility
Mr. Kipp went on to explain further about the changing needs of the consumer. “If you deliver a service, you want to make it consistent across a given customer base. Giving options to the consumer is very important to us. We’re not tied to just delivering things to just the home. Doorstep services used to be the norm 10 years ago but the needs have evolved.”
“One of the first innovations we brought about as an alternative was parcel lockers. The customer receives an SMS notification when a parcel has been delivered, and then can go pick it up at the locker. We expanded that to an option for a designated place delivery, delivery to a designated neighbor, or to a designated branch office. We’ve continued to innovate around these options, and allow flexibility to our customer demands. This has gone hand-in-hand with the expansion of the DHL eCommerce division.”
A Commitment to SMEs
Mr. Pitpreecha is well versed in the Thai market, and shared with us how he’s seen the growth of e-commerce becoming a great benefit to small businesses. “An increasing number of the shippers aren’t from large companies; they are from small mom-and-pop shops that do small things like crafts. We must have a mindset to deal with all sizes of shippers. To go from a large multi-national company to a small startup takes a lot of mental flexibility and agility. Especially in developing areas, having access to markets around the world can change a person’s outlook and prospects. The benefits of e-commerce are especially profound for these smaller merchants; with a smaller business on the internet, they now have a much larger reach for prospective customers. That’s the whole idea with e-commerce.”
“We’ve recognized fully well that the SMEs are the sustaining mechanism of emerging markets for the future. We’ve set our sights and are putting mechanisms in place to assist SMEs. In Thailand, most products are sourced and shipped from within Thailand to a local recipient,” added Mr. Monteiro.
The DHL Difference
To make DHL stand apart from other shipping options a consumer has, Mr. Monteiro went on to explain what he feels differentiates DHL’s quality and service. “The people factor in this business is so underestimated; I think that’s what really differentiates us. Keeping that fire alive within our employees is at the core of our business.”
“Logistics is all about service, and since we started a program to certify our own employees, the service has never been better. Upon completion, employees receive a ‘certification passport’. They can take this along with them and feel more prideful in their daily duties, as it reminds them of the right mindset and skillset needed to execute tasks on a daily basis. It’s not always fun to be a delivery person; with traffic jams, weather, and all types of things you have to deal with all day, and that’s why it’s so important to select the right people with the right mindset and attitude to deliver the service. It’s not just any other service it’s a DHL proposition, we have a very well-known brand and we must convey our best image at all times,” said Mr. Kipp.
“I think in principle, the industry is going to keep infiltrating more and more aspects of our life,” said Mr. Kipp. “The option for people to purchase products online keeps growing. A very popular option now is what’s called ‘click and collect.’ You place the order online, but you pick it up at a retail store. That’s a really interesting way of combining traditional brick and mortar stores and online sales; it’s all a question of convenience. It’s great for a common purchase where you don’t need the physical experience, but you can conveniently pick it up at that store. It’s not the same across all markets though. Retailers are formulating all types of strategies to keep them in competition with the internet market, and being able to create a different and worthwhile consumer experience is at the heart of it. Taking advantage of the infrastructure already in place is also an important element. For instance, when you can pull customers into the store with this ‘click and collect’ experience, once they’re in the store they’ll most likely pick up a few more items.”
One industry that has really started to take advantage of online sales and delivery is pharmaceuticals. After setting up a secure account online with a pharmacy, a user is able to have their prescriptions delivered to them at home. This is huge help for people who can’t get around, as they can get their medications delivered to them. Mr. Kipp described another growing sector where he sees opportunities. ”I think fresh grocery deliveries will be one of the next big trends in e-commerce. There are certain requirements to groceries though, and unless the customer is certain they’re going to really receive the same thing they can get in the retail store, you won’t have the trust to buy it online. That’s a big barrier to overcome. We are always looking at what categories have opportunities and what consumers are demanding for different types of services. It’s important to look ahead and be ready to deliver the next trend when the market demands it. I think that’s one of the advantages of a globally operating organization. We’re able to monitor different trends around the world and really assess future trends, or whether a trend currently would be something we could implement in our local areas as well.”