Summary
While traditional retailing is declining, growth in e-retailing still shows double-digit growth rates. Not only shipment volumes of parcel operators but also requirements of online retailers and recipients increase. Parcel operators in Germany have significantly expanded their parcel shop networks in recent years. Different carriers compete for centrally located sites and qualified shop owners. In this context, the German national regulatory authority BNetzA had suggested, in a 2015 discussion paper, that jointly operated drop-off points (white label shops) could provide benefits for consumers.
In this study, we deal with the development of retail trade and the state of parcel shop networks of Germany’s five major carriers: DHL, Hermes, DPD, GLS und UPS. We analyse examples of alternative concepts for drop off and pick up points in Germany and abroad, and identify alternative operational models. In this way, the study contributes to an overall economic assessment of exclusive parcel shops versus cooperative solutions. The study explores the interests of different market participants: parcel operators, parcel shop providers, receivers/consumers and online retailers.
We identified four different alternative models for parcel shops: 1) click & collect solutions, i.e. delivery to retail outlets, 2) white label shops, i.e. independent parcel shops that offer products of several parcel carriers, 3) parcel shops operated cooperatively by several carriers and 4) initiatives to improve supply in rural areas (infrastructure model).
We conclude that cooperative models are primarily beneficial to receivers. However, parcel operators today do not show ambitions to cooperate. Brand images and dedicated technical and organisational solutions prevail. Possible regulatory interventions to introduce cooperative models (against the parcel operators’ interests) could include access obligations or bans on exclusivity clauses in contracts with providers of parcel shops. However, such heavy interventions could only be justified for reasons of e.g. serious market failure or substantial abuse of market power.
Clearly, there is no motivation for such remedies in the German parcel market today. On the contrary: Parcel shops are universally accessible all over Germany, and coverage is further improving. There are more than 50,000 parcel shops sites today. Each of the five largest carriers has built up a nationwide network. Furthermore, there are alternative solutions for receiving parcels, like parcel lockers, parcel mail boxes, or time-definite predictable deliveries. As in other countries, interested companies would be free to invest in new parcel shop networks in Germany. Hence, independent white label shops could be established if there were sufficient demand from carriers or receivers, or if such demand emerged in future.
Discussion Paper is available for download.
