Any other business
How Doddle is unclogging business mailrooms and revolutionising ecommerce delivery
9 min read
28 April 2015
As a business backed by a big corporate and one of Britain's most successful entrepreneurs, Doddle's fast growth might be unsurprising. However, charged with an investment of £24m, it is already looking beyond UK borders and attracting the interest of big brands.
We’ve all done it – a late Christmas gift, the latest must-have boxset. Online purchases delivered to your desk at work so you don’t have to face the disappointment of a “sorry- we missed you card” when you get home.
However, according to parcel collect, send and return service Doddle, employers are becoming increasingly unhappy about their mailrooms being clogged up by personal packages and are clamping down on the practice.
Tim Robinson, Doddle chief executive, says it represents a huge opportunity to help his firm deliver rapid growth both nationally and internationally over the coming years.
“We’ve got data from one building in Canary Wharf during the Christmas period which showed that 80 per cent of parcels in the mailroom were personal deliveries,” Robinson said. “Even in October it was 50 per cent. More employers are banning it to free up their mailrooms.”
It’s an opportunity for the group, which opened its first parcel shop at Waterloo station last September, because it is offering corporate deals to businesses providing a collection point for all personal employee parcel deliveries.
It can also help change people’s attitudes to collecting their ever increasing cache of online goods. “We have a big education job to do through marketing and advertising to change customer attitudes and behaviour. It is our biggest challenge,” Robinson said.
“Some people like getting goods delivered to home, others are using click-and-collect in store more and another response we sometimes get is the office solution. People tell us ‘why do I need your service? I can get my purchases sent straight to work’. The idea of having a third party location is not well understood. It is our job to tell people that they can use us as a secondary delivery address.”
Read more about the delivery market:
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- The latest innovations in delivery used by the UK’s top retailers
- My Parcel Delivery: Where there’s a queue, a game-changing idea isn’t far behind
Doddle is a 50-50 joint venture owned by Network Rail, a company that Robinson used to work for, and one of the UK’s most successful entrepreneurs Lloyd Dorfman – who turned Travelex from one London office into the world’s largest foreign exchange specialist.
Dorfman, Doddle’s chairman and Network Rail, have ploughed a combined £24m into the operation to spur its growth.
Since that first opening last year, the group has grown to 34 parcel shops in the UK, employing 400 staff (or Parcelistas as they are known), mainly at train stations in London but increasingly moving nationwide and into new sites such as universities, shopping centres and airports by the end of this year. The aim is to grow to 300 shops in the UK by 2017.
“The idea behind Doddle was to see how we could use space at train stations to make them more useful for commuters and local consumers. You had the top 20 stations which were destinations in their own right with food and clothing but outside of that the only offerings they had were coffee and croissants,” Robinson explained.
“We saw online as an area of tremendous growth but we saw consumers upset with missing home deliveries because they were at work and getting that missed you card through the letterbox and retailers being hit with the extra costs of double deliveries and blows to their reputation. We thought we had the space and the footfall with millions of commuters every evening and morning going through stations.”
After a lot of market research the group found the public preferred manned stores and “talking to human beings” than collection lockers which were mainly used by “young, tech-savvy” shoppers.
“We are not unlike a classic retail unit. We are very technology driven with apps and push notifications and emails telling our customers when their parcels are ready to collect,” Robinson explained. “Unlike our rivals we wanted every parcel carrier and every retailer to deliver into us – an open access approach. When buying online customers can choose a doddle button at the checkout to have their parcel sent to our shop for picking up.”
The 12 retailers signed up to the service to date include Amazon, Asos and TM Lewin with another 28 to join by the end of this October.
“The retailers help us find the best location for our shops by giving us sales data,” explained Robinson. “What are their distribution costs and percentage of failed deliveries? We look at footfall and demographic and are careful to ensure that the stores are very much in the eyeline of commuters. We found that if a store is even two minutes walk away from a commuter’s normal route home they won’t go! It has to be on the station itself so they literally stumble in!”
Shops, manned by either two or three staff, open and close later in commuter belt towns such as Southampton to ensure people travelling in and out of London can still get their parcels.
“One interesting learning we’ve had is that people want their parcels quickly. We assumed that parcels would dwell in our shops for about two and a half days but people come in sometimes even 20 minutes after being notified. It means we can move to smaller shops and get into that important same-day bracket,” he stated.
Helpfully for a growing business Doddle isn’t struggling for funds and is currently “working its way through” its initial £24m tranche.
“We are in a strong position, we don’t need to chase funding but we are talking to potential funders and strategic partners. So those that can give us access to certain customers or technology which will help the business grow,” Robinson said. “There is a lot of investment interest in the online shopping space.”
Chairman Dorfman turned Travelex into a global phenomenon. Could Doddle do the same? “The great thing about ecommerce is that you can set up a website in an East Grinstead garage and it will go international. We are hoping to export the model and the technology abroad in some way. We are looking at Europe, Australia and the US. But it is early days on that one,” Robinson revealed.
The focus remains on the UK and building a “great network”. It won’t be as easy as its name suggests, Doddle sees challenges ahead.
“As I said with customers our service won’t be for everyone and with technology it is changing so fast in this sector you have to keep ahead of the game,” Robinson said. “It is also a very peaky sector. For two months of the year around Christmas volumes go through the ceiling and it is very difficult to forecast how peaky it will be. We saw last year with the problems some companies had with online deliveries. If we had a bad peak it would be hard to recover from that. It’s a big risk but we can combat that with a focus on technology and our staff.”