If you’re named Home Delivery Operator of the Year for four years running, you must be doing something right. And what DPD UK did right was to make exhaustive efforts to get proper feedback from customers and then act on it.
For DPD UK to have won the MT Home Delivery Operator of the Year award for the fourth year running is no mean feat.
Every year competition is fierce and submissions impressive. So what made DPD stand out from the crowd yet again, this year? According to the judges, DPD’s ‘X factor’ lay in its ability to communicate with customers, consumers and its supply chain and its commitment to using that feedback in innovative ways to improve its services.
DPD described 2019 as being a “stagnant” economy, but this was turned on its head early in 2020 as coronavirus struck and the first lockdown took hold.
“Volumes leapt by 55% within 10 days of the start of the coronavirus national lockdown,” says Elaine Kerr, DPD executive director of sales, CRM and customer services, pictured. “We were hit by one and a half years’ worth of growth in just three months and by the end of the year we had handled three and a half years of projected growth in just nine months.
“Handling this surge has meant following three key imperatives that have driven all our goals and objectives during lockdown: stay close to the business; be agile, speedy and responsive; maintain our amazing culture.”
While DPD does not publish the split between its B2B and B2C deliveries, it does reveal that 10 years ago, only 12% of its traffic went to home addresses and since then all the growth has been in B2C. “Having said that, B2B has been a key part of our business for 50 years and that absolutely remains the case today,” says Kerr.
Secret of success
Other parcels companies have struggled to mix B2B and B2C deliveries in one network – so what is DPD’s secret?
“We can’t really comment on why other companies have struggled or gone out of business,” says Kerr. “We do know that great planning and attention to detail works for us and means we can provide leading service levels for both B2C and B2B services. Some of our customers require both anyway, so it’s not always as black and white as one might think.”
As well as the ‘red’ DPD network, the ‘blue’ DPD Local (formerly Interlink Express) is a franchise operation specifically geared to providing a more local service for shippers with smaller volumes. So would DPD ever consider merging the two?
“They are run totally separately, except in peak periods when there’s a bit of synergy between networks for efficiency reasons,” says Kerr. “No, they won’t ever merge.”
The criteria for the Home Delivery Operator award say the winner has to position themselves as the “home delivery operator of choice for both the retailer and consumer”. DPD’s rise to market leader in the B2C parcels market shows it is meeting this criterion, so how does it stay at the top?
“Staying at no 1 means never standing still,” explains Kerr. “Our aim is to keep raising our game, keep
innovating and keep asking ourselves: what’s the next thing that will make a customer go wow? Also, how can we make life easier for shippers and shoppers alike? In recent years that approach has really delivered results, as we partner with engaged users of our app to co-create new services.”
DPD’s campaign to make its delivery service more personal, launched in 2019, is a good example. Dubbed ‘Tiny Noticeable Things’ (TNTs), the campaign was inspired by DPD’s regular customer feedback sessions, in which one chief executive suggested that “it is the tiny noticeable things that separate the truly great companies from the rest”.
With this in mind, DPD used its consumer app to create a 45,000-strong (now 60,000) focus group with which it worked to formulate and launch six new consumer offerings. They include ‘Message the Driver’, which lets consumers send drivers useful information, such as accessibility or precise location; ‘You’re Next’, which alerts consumers when the driver is five minutes away, so they can listen for the doorbell; ‘In-flight’, which allows recipients to make changes to their delivery once it’s already out on the road; and ‘Rate My Driver’, which customers can use to give doorstep experience feedback.
The results were rapid, with DPD producing its best ever service level for on-time delivery of 98.95% in 2019, up from 98% in 2018, with 2.75m more parcels delivered right-first-time compared to the previous year.
The improvements were also reflected in DPD’s ranking in MoneySavingExpert’s 2019 poll in which 9,475 home shoppers rated the delivery services of all the major UK delivery companies. For the seventh successive year, DPD led the field, with 63% of voters rating its service as ‘great’, compared to 41% for its nearest competitor.
Nearly 70% of DPD’s top 100 retail customers have been with it for five years or more, which is unusual in a fickle market where customers sometimes move to save pennies on a delivery, especially bearing in mind that DPD is often more expensive than rival carriers.
“First of all it’s worth saying that this kind of loyalty is priceless, as it means we can keep investing for the future in our people and in our network,” says Kerr. “There are lots of carriers out there and therefore lots of choice for retailers, but I wouldn’t say the market is fickle. It is probably less price-driven than in the past, and customers these days take a much broader view of value – they want a right-first-time delivery, flexible options for consumers and, most of all perhaps, a doorstep experience that reflects the quality of their own brand.
“Many of our loyal customers tell us that it’s worth paying a premium to use DPD because right-first-time deliveries mean far fewer consumer complaints in their contact centres, which in turn reduces their costs.”
“They also really value loyalty from their customers and if they get a first-class doorstep experience from DPD, repeat purchases are more likely. This comment from a consumer is typical of many testimonials we get and probably answers the question better than we can!”
When asked to put herself in the shoes of a retail customer and say what DPD does well and not so well, Kerr says: “What we do well – we provide great insight into what consumers value most in the delivery experience: choice, convenience and control; great tech; great people. As for not so well, again that’s where Design Space on the app comes into play. It’s a space where 60,000 home shoppers can improve what we do. That makes it one of the biggest focus groups in the world and the ideas people come up with are ones that neither we nor retailers have thought of ourselves.”
DPD has also led the market in cutting its carbon footprint. From 2017 to 2020, the company grew its EV fleet from just five to 622 (now 800), making it the UK parcels sector’s largest electric delivery fleet. It has also created the first network of all-electric micro- depots in London, cutting its CO2 emissions by 95.8 tonnes a year.
After scouring the market without success for a suitable zero emissions e-cargo bike, last year DPD decided to invent its own, in partnership with British start-up EAV. Dubbed the EAV P1, the cargo bike is suited for pedestrian zones, roads and cycle lanes and once fully deployed will not only save DPD 30 tonnes of CO2 a year but also lower costs.
Our judges were impressed by DPD’s “outstanding customer service levels and innovative introduction of electric vehicles”, with one saying it was “a fantastic submission which answered all the questions”. One commented: “DPD displayed significant innovation in two key areas. First, improved end recipient engagement, and second, innovating in its vehicle fleet – not just through procuring cleaner vehicles but by working with the supply chain to develop new products.”
Drivers on the front line
The best IT systems in the world are useless without a motivated driving workforce who after all are in the front line of any home delivery operation.
Since 2019, DPD driver numbers have exploded from 5,000 to 12,000 today, following a huge recruitment drive during lockdown. Kerr says keeping drivers happy is about more than merely earning money.
“They earn a very good living with us, but the rewards go beyond just the financial as we have several recognition programmes in place for drivers on the front line and indeed for warehouse operatives and other colleagues working hard behind the scenes,” she says. “Motivation has been more crucial than ever in the last 12 months, as we’ve been asking our people to go above and beyond every day.
“To that end we invested £2m in 2020 on 100,000 morale-boosting gift items for our people including sunflower seeds, kids’ games, chocolate brownies, curry sauces and a special 12 days of Christmas advent calendar – plus another £200,000 on 1,000 laptops to help our people who were home-schooling their children but who didn’t have their own computer.
“As a company I’d also say we’re now better than we’ve ever been at sharing our strategy with all 22,000 members of Team DPD and this also helps people buy into the DPD ethos, as they understand very clearly how their individual roles contribute to our overall success.”