Gary Winter joined PayPoint in 2017 to take up the newly created position of parcel services director. His brief was to grow the company’s click-and-collect services from a single carrier service to ‘the home of click and collect.’
Two years on, PayPoint’s CollectPlus parcel network is back in growth, meaning more volume and footfall for store owners. Winter and his team achieved this through new partnerships with eBay, Amazon and another mystery carrier, which are offsetting a dramatic decline in Yodel parcel volumes. This has even created opportunities for PayPoint stores outside of the CollectPlus network to offer parcel services.
Discussing upcoming developments, the parcel boss revealed: “We’re improving our technology in stores, version five of our app will launch in October, it’ll help create a faster, easier experience for both parcel customers and our partnered stores. The biggest change is adding predictive text for entering the parcel code, keying it in can be quite frustrating, so instead it will check the inventory and automatically fill the rest, so staff will only have to enter three or four characters. It reduces errors, cuts queues and keeps staff happy.”
Asked about the rapid realisation of bringing other carriers onboard, Winter joked that it wasn’t as rapid as PayPoint expected. He discussed signing the deal with its largest new partner, Amazon stating: “The first PayPoint store to launch an Amazon Counter was in November last year, so it was a very protracted trial. The reaction has been amazing. There’s been two recent announcements, the partnership with DHL, also known as Pass My Parcel, and the one with Amazon. In some ways these two things are linked. Around 80% of Pass My Parcel’s volumes were Amazon, so when Amazon left it was kind of a lame duck network with very little volume left in it, apart from DHL’s.”
He said the fact that PayPoint One is an android system, allowing store owners and staff to have reliable access to the Amazon Counter app without using their own mobile devices, was one of the key reasons Amazon chose PayPoint.
The new carriers have taken PayPoint from having less than 10% of the potential pool of home delivery parcels to nearly three quarters of the total pool. Winter told betterRetailing: “It’s like we started off fishing in a pond and now we’re fishing in the ocean.”
With a new, dominant market position, Winter revealed that his focus has now changed to growing parcel volumes, footfall and customer service with the existing carriers, rather than signing further deals. He explained: “My focus for the coming year is to concentrate on the carriers we’ve got. We’re training 80-100 stores a day with the new DHL parcels and we’re going from 500 PayPoint sites with Amazon sites to 1,000. I see my role as getting new customers to cross the threshold into partnered stores.”
To support the rollout of the new parcel clients, PayPoint has invested in 10 new staff dedicated to training and supporting store owners. Winter told betterRetailing: “Their job is to get stores set up and trained with click-and-collect services, but also providing care and support to stores.”
The parcel services director revealed that eBay is closely monitoring store performance with Net Promoter Score (NPS) surveys. “Amazon and eBay are obsessive with customer service, they see the collection point as an extension of their brand, and a lot of their attention is on managing that,” he added.
Customer service with parcels also creates additional opportunities for independent shops to create new returning customers: “We are going into peak parcel period. A customer that may make only two to three online purchases per month may be making between 20-30, and these are the type of people that may be trying click and collect for the first time. At the moment, most parcels are delivered to the home, with just 3% of parcels collected at a third-party store. This means there’s massive potential for this to increase and to create new frequent customers.”
He advised stores to refer to customers by the name on the parcel, to alphabetise parcels on shelves for quick access and to be cheerful in order to win over the new visitors. Winter also revealed: “If a shop doesn’t have shelving for parcels, we can give up to £100 grants for stores to get set up, all they have to do is agree it with us, install it and send us a photo with the receipt and we’ll credit their accounts.”
betterRetailing challenged Winter on declining commissions for retailers, which have fallen from 35p per parcel for Yodel parcels, to 25p per percale for all new carriers. PayPoint’s takeover of DHL’s Pass My Parcel saw related commissions fall from 45p to 25p. He responded: “The conversation should be turned to footfall. The average parcels per week is 70, even at a much more generous commission it’s not going to pay for your store, that comes from footfall.”
Asked to quantify the value of footfall in terms of basket spend, Winter answered: “Parcel customers probably spend more than users of other PayPoint services, because online purchasing suggests a higher disposable income. That’s not true of all PayPoint services, but it definitely represents a new demographic for stores.”
Other carriers such as myHermes have also cut commissions this year. Asked to explain the wider trend of declining commissions, the director said: “People expect free delivery now. When people were prepared to pay for it, it was easier for every part of the chain to carve out a larger margin. But the whole sector is now under pressure to do it for free. The e-tailer wants the minimum cost and everyone is getting squeezed – the carrier, the drivers, us and shop owners. We had to take a little bit of pain to get deals with eBay and Amazon.”