Serial winner DPD UK never loses sight of the fact that its customers are the retailers who pay it to deliver their products and Project Shine, designed to address a host of minor yet significant issues in 2017, has certainly raised the bar
DPD UK added to its already bulging trophy cabinet this year, taking both Customer Care and Home Delivery Operator of the Year trophies at the Motor Transport Awards 2019.
It has been a serial winner of the Customer Care Award, making the trophy its own since 2014. DPD has also had nine years of unbroken growth in turnover and profit that has seen it rise to top dog in the home delivery market, delivering 250 million parcels last year for 8,000 retail customers. Despite this incredible track record, DPD’s winning entry this year opened with the honest admission that “despite financial success, peak 2017 was far from our finest hour”.
That is not to say the wheels came off but DPD’s Net Promoter Score fell from 66 to 63 – still well above the 50 considered ‘excellent’ but below a ‘world class’ 70.
While the firm knows that the basis of its success has been creating a great delivery experience for consumers, director of marketing Tim Jones says that it never loses sight of the fact that its customers are the retailers who pay DPD to deliver their products.
“Very clearly, it's all about our customer, the retailer,” Jones says. “Because only with retail customers do you have a consumer customer as well.”
With peak (classed as the six weeks from Cyber Weekend to Christmas) accounting for an incredible 20% of some customers’ annual sales, it was essential DPD made sure peak 2018 went like clockwork.
The answer was Project Shine, designed to address a host of minor yet significant issues in 2017.
“We were very clearly committed to Project Shine, which was all about improving things for our retail customer by making sure we were at our usual high DPD standard,” says Jones. “Every day, when we come to work, everybody is thinking about the paying customer. One of the ways that we can give more to our customers is to look after their customers, but let's be very clear that our customer is the retailer.”
Doing a great job for the recipient of a parcel has several benefits for DPD and its retail customers.
Predict app
“The DPD app, Predict, and other things that improve the delivery experience and convenience for recipients do two things for both parties,” explains Jones. “It minimises calls to the retailer’s call centre from consumers wanting to know ‘where's my parcel’, which takes out costs from the retailer and improves the overall experience.
“Second, we drive up repeat order levels, which is good for us because we get more deliveries and great for our customer. That’s the way the relationship’s structured, and that’s why our business strategy is definitely geared primarily around the retailer.”
A key part of Project Shine was a return to the shop floor for the DPD senior management team – including Jones – to see what working at the coalface is really like.
“A lot of people look at companies like DPD as the market leader, a big innovator and with massive growth,” he says. “There's often an assumption that there's some arrogance here or these people get carried away with their own success.
“That’s definitely not how we are at DPD. We strongly believe we’re very close to our customers and very close to all the people in the business. I think to do that, you’ve got to get down and dirty.
“Two examples: all the directors here are aligned to our larger customers. We get out and meet those customers face to face at least twice a year and speak to them more than that. We’ve got our finger on the pulse of the customer.
“Then we have to also understand what’s going on at the coalface. Our CEO, twice now, has been out for the day with a delivery driver, and I’ve been out with a linehaul driver.
“I have also spent time in our call centre where you hear what the issues are on the doorstep. Things can go wrong but when it gets resolved, it’s such a good feeling.
“The main thing I learned was just how often people ring up even when they don’t really need to. They just want to check things are coming, even though we sent a notification and gave a specific time. People are ringing just to check what was said to them is right.”
Apart from the 4 million consumers who have downloaded the DPD app, a lot of what the delivery firm does is behind the scenes and many parcel recipients will never know or care who turned up on their doorstep.
“The notifications we send will be in our customer’s brand,” says Jones. “We'll say ‘your ASOS parcel is coming between…’ Consumers sometimes have less awareness of the different carriers, but they recognise the people they purchase from.
“I think what consumers are starting to remember about carriers is when they have all of the in-flight options that they need, not just the notifications. We believe we’re still leading the field, consistently delivering in a one-hour window, which no one else does. But if, with the best will in the world, you can’t be in for even an hour, then it’s all about the in-flight options. This is where we believe we maintain the advantage, because we have more in-flight options with more flexibility.
“Clearly, people overwhelmingly want their stuff next day to their door. We can talk all we want about locker boxes and other things, but that’s what people want and we aim for that, first and foremost. When we can’t deliver that, we aim to give them the next best thing, whether that’s deliver to a neighbour, come back another day, leave safe or take it to a parcel collection point.”
Customer satisfaction
At present, few retailers give the end recipient a choice of carrier when they order goods online. But how satisfied consumers are with the service it provides is clearly a factor when retailers select their home delivery operators.
“We see ourselves as a key component of the e-commerce industry, which has been a massive UK success story,” says Jones. “It’s a huge growth industry and we’ve helped with the success of some of the best e-retailers. Over the past 10 years we’ve helped improve consumer confidence in terms of buying online and getting goods delivered safely and when required.
“Yes, we would like DPD to be recognised, but most crucially recognised by people who pay for shipping of the goods and that remains our primary goal. Of course, the role of consumers will be increasingly important perhaps in the selection of carriers by retailers, so yes, we do need to build brand awareness with consumers. That’s one of the major reasons why we launched the app, which is essentially about getting right first time deliveries.”
Jones is equally adamant that DPD will be sticking to its knitting and will not be looking to grow even faster by expanding into two-man or ‘ugly’ freight.
Machine sortable boxes
“We have to recognise what DPD does is next-day delivery of what we call machine sortable boxes,” he says. “There is traffic out there – large, oversized, heavy, irregular shaped – and there need to be other players in the market to service that. We want as much business as we can get, but the traffic profile has to be right for things to work to everyone’s mutual advantage.
“We are in a high growth market, and we’re very clear about which parts of that market we want. We spend a lot of our time analysing the market and we wouldn’t have built the fourth hub in Hinckley if we didn’t believe in this market and our part in it.
“We’ve now commissioned our fifth hub, which will also be sited at Hinckley, and will give us the three biggest hubs, we believe, in Europe. It will give us a huge amount of additional sorting capacity. Clearly, we wouldn’t be doing that if we didn’t believe there was sustainable growth in the market we’re in.”
Despite the phenomenal success DPD has enjoyed in the UK since its ground-breaking Predict software introduced the concept of one-hour delivery windows a decade ago, the B2C market remains brutally price driven and the company’s management knows it can never rest on its laurels. As one of the MT Awards judges put it, DPD “recognises there is no room for complacency in its highly competitive market”.
“It will always be very tough,” agrees Jones. “There will always be lots of competition, but we’re very clear on what we want and what we need to invest to continue to serve the market.
“It will always be highly competitive and hugely seasonal. We’ll have Black Friday, we’ll have August summer sales, we’ll have January sales. The peaks and troughs will continue, and that’s why that fifth hub and the additional capacity will help us cope with those operational challenges.”
Putting the Shine back on DPD
Project Shine pulled together a multi-disciplinary team of 140 people to take a fresh look at DPD’s processes.
Key outcomes included:
- Persuading major customers to agree volume caps
- New self-serve customer dashboards to give shippers more control
- A new IT system to give DPD real-time visibility of all parcels
- Operating hubs at full speed from 6pm rather than 8pm to improve volumes delivered by 150% at weekends and ease the pressure on Mondays
- Deployment of 220 sales and IT staff from head office to support the depots
- Creation of an Intelligent Operations Centre to act as ‘mission control’ for peak 2018
The project was a complete success, ensuring all major clients who had expressed dissatisfaction in 2017 were retained.