#TYBSpotlight: Parcel Motel Delivering A Rapid Success Story
I first heard of Parcel Motel a year ago from a friend – and word of mouth is always the best advertisement of course. Knowing that a lot of UK eCommerce sites tended to be cheaper than the equivalent in Ireland plus some offered free UK delivery which wasn’t available to Ireland, I realised Parcel Motel was going to save me money, which I like.
Living in a cul de sac of fields as I do, which only the postman knows how to find, Parcel Motel made it much easier for me to receive my parcels without having to hopelessly navigate a courier to my door. And I know a lot of other people are in similar situations in rural Ireland plus of course those working who can’t be home to receive a parcel in the middle of the day.
Yet again I wanted to know more about the story behind the business so I jumped at the chance to do a #TYBSpotlight with the CEO and co-founder, John Tuohy to find out how they came up with the idea of Parcel Motel, how it was advertised and the technology behind it plus how they have dealt with the rapid growth of the successful model.
What gave you the idea to set up Parcel Motel?
Parcel Motel was really born out of our understanding of the impact of e-commerce, in particular, on the delivery industry. There’s a clear emphasis on providing consumers with convenience. There was a time when having something bought online brought to your home by a courier was almost regarded as a premium service. It was far more convenient than going to the shops and bringing it home yourself.
However, as people have weighed up the fact that they might have to take a day off and wait at home for a delivery or pop to their local post office to collect something which might have been delivered when they were out, they realised that getting something at home sometimes isn’t all it’s cracked up to be.
In addition, there’s a need for retailers to keep their customers happy. They want to make sure that consumers get what they’ve bought as quickly and smoothly as possible.
Parcel carriers too want to ensure first time delivery success. When someone isn’t in to take delivery of items at home, it creates the possibility of repeat deliveries which aren’t terribly efficient, especially as e-commerce continues to drive the parcel volumes which we are required to handle ever upwards.
Another factor for the delivery firms in Ireland, of course, has been the absence of a postcode system, a variable which further complicates attempts to put packages in the hands of consumers at the first time of asking.
So, in late 2011, we decided to establish Parcel Motel because it represented a way of satisfying retailers and carriers by, above all, satisfying consumers. It allows them to collect goods quickly, cheaply and in a far more convenient fashion than had previously been possible.
Can you explain how it all works?
It’s incredibly simple. After registering online for free, subscribers can nominate to have parcels shipped to their Parcel Motel of choice. With more than a hundred in operation across Ireland, there’s generally a terminal close at hand. Once registered, they receive a Parcel Motel Identification Number, or PMID for short.
When giving their details for deliveries, they enter their name and PMID along with the address of the Nightline depot in Dublin or Belfast, depending on whether they’re having goods shipped within Ireland or from the UK.
After we receive that parcel, we bring it to our subscriber’s chosen Parcel Motel and send them a text letting them know that it’s arrived along with a unique, secure PIN number. When they turn up at their local terminal, they tap in the number and the door of the locker containing their package pops open. Each delivery costs from just €3.50, depending on the size of the parcel.
The concept of Parcel Motel did not come about solely because of e-commerce but, given how Irish consumers have become used to shopping online, it has proven enormously popular.
As well as receiving parcels, Parcel Motel also allows individuals to send packages with the same simplicity starting at just €4.50, depending on the size of the parcel. We have also built into the system the opportunity to return unwanted online purchases back to the retailers from which they were bought. Some online retailers even allow customers to do so for free.
The technology is up to date with the “motels”, texts, emails & website – who created that?
Whilst the idea for Parcel Motel is our own, we partnered with a Polish company, In-Post, which is acknowledged as the world leader in making the terminals which we needed. We had to create something, however, which reflected our established style of doing business and, of course, the tastes of the consumers to whom we wanted to appeal.
I believe that they have come to regard Parcel Motel as being more than just a locker terminal but a trusted and dependable brand. As regards the technology, Nightline has created and continually invested in its own award-winning IT platform, Smartship®, in the years since our formation.
One important element of that for consumers is infrastructure capable of providing delivery notification e-mails and texts.
Even so, the ‘look’ of our lockers and our website, and the nature of interactivity between ourselves and consumers – especially via social media – has enabled us to bring Parcel Motel to life to the extent that some individuals now regard it as their first-choice parcel service.
Nightline is the company behind Parcel Motel – how long as that been around and what is the background?
Myself and my co-founder, Dave Field, began Nightline together in 1992. We began as a very small operation – literally, just Dave and myself. Our commitment to high standards of service and a desire to innovate in order to improve clients’ experience of the delivery business has meant that we are now the largest independent firm in the sector in Ireland.
We currently have 10 depots stretching across the island of Ireland and are looking to expand still further. We move than one-in-four of all parcels shipped throughout the country and work with leading domestic and international brands in retail, consumer electronics, pharmaceuticals, leisure and many other industries.
Only last year, we underwent a restructuring which created the Nightline Group, which has five subsidiary business – Parcel Motel, Nightline Delivers, Eirpost, Nightline Logistics and Nightline International. Both Dave and I – and, indeed, everyone involved with Nightline – are very proud of how far the company has come but it’s also wonderful to have the efforts of ourselves and our colleagues recognised by others. We have won a string of awards due to the excellence of our staff, innovation, customer service and the performance of Nightline as a whole.
A lot of research has been done by Nightline regarding the services of Parcel Motel. What were the findings?
Before we launched Parcel Motel, we undertook extensive analysis to determine how it might be able to make a difference. As other commentators have since discovered, we found that delivery was a key issue for those people shopping online. Generally, deliveries were too slow or made when they weren’t in a position to receive purchases.
Another key point was the cost of delivery, particular for those goods bought from UK retailers. Whereas a shipment within the UK might be free of charge, moving an item of a similar size to the Republic might cost more than €30. That not only helped us decide the pricing structure for Parcel Motel but led us to another innovation.
We created something which we call the ‘virtual address’ that gets around the problem of the huge difference in delivery charges. It means that any Parcel Motel subscriber in the Republic can provide UK retailers with their PMID and the address of our Belfast depot instead of their home.
As soon as we take delivery, we ship their goods onto the specified Parcel Motel – and all for the same cost as a purely domestic Parcel Motel consignment.
Since that initial phase of research, our subsequent enquiries have helped us further refine the benefits of the system, such as underlining how important the provision of a simple, reasonably-priced or even free, returns process is to the growing number of Irish residents who have joined the e-commerce revolution.
What type of advertising have you done to grow the brand – Social Media and/or traditional – and what do you find works best for you?
Given that we launched Parcel Motel with no retail partners, it was important for us to create as much awareness of what it is and what it does as quickly as we could. Therefore, we undertook some print and broadcast advertising as a means of making some early impact. The novelty of Parcel Motel and the Nightline credibility also meant that we attracted great media interest too.
All that exposure was supplemented by extensive campaigns on social media, something which continues to this day, albeit in a more tailored fashion as we have got to know more about our subscribers and they have become used to Parcel Motel.
One thing which is clear, though, is the degree to which the merits of Parcel Motel have spread by word of mouth. Our most recent piece of research highlighted how more than half of all our users decided to register with us having heard from a family member, friend or work colleague about their satisfaction with the system. We believe that there’s no better indicator of how well we’re doing than rapidly-growing subscriber numbers fuelled by references from individuals who have also tried and tested Parcel Motel and found it to their liking.
Our ability to manage the tremendous growth in popularity, subscriber numbers and parcel volumes is down to the strategy which we put in place right at the start. We set targets which we believed to be achievable based on our long-standing knowledge of the parcel and e-commerce businesses and our research into the sort of service which Irish consumers actually wanted.
The Parcel Motel network has grown in line with the demand from subscribers and is, therefore, perfectly sustainable. It’s not just consumers either. Major retailers have seen how Parcel Motel has been enthusiastically adopted by their customers and have decided to offer it as a delivery option at their online check-outs.
The entire system is underpinned by Nightline’s track record in handling massive numbers of parcels and the technology, such as Smartship®, which enables us to do so accurately and efficiently.
Currently it is mostly UK deliveries to Ireland that you are facilitating – any plans to expand to other countries?
Parcel Motel actually handles deliveries to and from Ireland, including the recent introduction of a returns service on behalf of a number of big-name UK retailers who see it as having the opportunity to drive further sales. However, we are well aware of the potential of Parcel Motel for vendors much further afield. The European Commission set out its intentions to grow cross-border e-commerce at the end of last year.
Whilst we are not intending at this point to set up additional networks of Parcel Motel terminals across the Continent, we know from our own experience that consumers in many European countries favour alternative delivery methods – such as Parcel Motel – over more traditional door-to-door shipments. That means retailers with an appreciation of those markets which are looking to generate business from the greater Irish affinity with e-commerce may well find Parcel Motel to be a wonderful, flexible and reliable tool to offer their customers.
I’d like to thank John Tuohy for this excellent insight into his successful business and I’m sure he’d welcome questions in the comments below.
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