Wednesday, 18 November 2009

Europeans lead the way with Delivery

In Berlin I learned two things:
  1. Britain (and USA) is quite some way ahead of central Europe when it comes to e-commerce service on the web, and
  2. We are way behind on the actual mechanisms of delivery. That is, of getting the products to the customer at the time most convenient to them.

I can always tell the moment when the content of my presentation finds its home in a delegate’s mind. First they slant their head to one side whilst staring the PowerPoint slide, and start to tap their lip with their pen. Then they straighten their head up, and frown a little. Next, they stop frowning and nod ever so slightly. Finally they jot down a few words. If they have a colleague they will turn to them and whisper something. Their colleague will then either nod immediately, or otherwise tap a pen on their own lips and follow the procedure of their colleague on this path to enlightenment.

That’s how I know my speech on Monday (talking about APIs, inspiration through collaboration, mobile devices, and listening to customers) resonated with many in the conference room. It’s also how it began to dawn on me that few of them had thought much about innovation at the ‘front end’. Talk of inspiration (using family, friends, and trusted sources such as a favorite TV cookery show), yielded quite a few nods, and talking about the’s API had most heads animated.

I thought I did quite well as the speech seemed to be well received, so it was a couple hours before I, as a delegate now, began to realise something and start to tap my pen on my lips...

The central European countries know how to deliver to customers. They always have. Germany’s Deutsche Post, and MOVE (Mail Order Valley of Europe, centred in Lille, France) are all part of a coordinated, disciplined, flexible postal delivery system that is the envy of the world. This is simply because these countries grew up trading with their neighbours to build their economies. Most residents of border towns think nothing of travelling to the next country to do their shopping, Indeed, the European Union was born of the desire to standardise tax, monetary units and whole economies so that trading could be made as simple and as easy as possible. Compare this to the ‘island nation’ mentality of us Brits who think that ‘Europe’ is the place over the water and quite a journey.

For Europeans, e-commerce is simply another way of selling over distance, which they are all used to. In the UK we always think of ‘delivery slots’ and conclude that a company allowing you to decide if you wish to have the delivery in the ‘morning, afternoon, or evening’ is amazing.

Most Central Europeans don’t have to make that sort of decision. With many companies, the customer gives a date/time they want a delivery. That request is sent off in real-time to a form of ‘bourse’ (a stock-exchange style market) and back comes a set of companies willing to make that delivery, and the price they are asking. The customer either selects one of the companies or, if the cost is too much, increases the width of the delivery window and asks again.

For example, I want a book delivered tomorrow at 3:30pm. In Central Europe, this request goes off to the ‘bourse’ and it comes back that two companies are willing to deliver between 3:15pm and 3:45pm, one for €8 and one for €10. Too much, so I extend the window to an hour either side of 3:30pm. Now I’m getting €5 average. Extend the window to the whole day and I’ll pay just €1.50. See the market at work here? Behind the ‘bourse’ is a whole network of companies from couriers on bikes to large vans. Computer trading systems links their various vehicles’ locations, capacity and availability to a market system which trades delivery orders. It’s absolutely fantastic (in theory anyway) and proof that Europe has thought this through.

Many smaller e-commerce companies in the UK rely on the Royal Mail. Ha! Can someone set up a ‘bourse’ for us all, please?

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