Logistics industry digitisation to trend this year

LARS VEUL Consumers’ demands and expectations are at an all-time high and show no sign of slowing down

GRWOTH POINT Pargo expects to grow its network of more than 3 500 pickup points, located in the most popular retail stores this year

10th February 2023

By: Tracy Hancock

Creamer Media Contributing Editor


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The digitisation of the local logistics industry will take centre stage this year as companies continue leveraging smart technology and innovation to improve customer service delivery and experiences amid the current economic climate, says smart logistics company Pargo cofounder and director Lars Veul.

Despite the economic challenges associated with rolling blackouts and the rising costs of living, consumers are shopping online more than ever before.

This year, innovations will focus on live tracking, delivery management and “putting choice back into the hands of the consumer”, as convenience of delivery is an important factor impacting on online buying decisions, he advises.

“Customers order online, expecting their order to be delivered without hassle. Unfortunately, for further outlying and rural areas, this is still a challenge in 2023. Couriers either don’t operate in these areas or don’t have access to addresses in large estates or security complexes.”

However, consumers are increasingly demanding more control over their delivery and the ability to receive their delivery anywhere (even in hard-to-reach areas) at an affordable price.

“Consumers’ demands and expectations are at an all-time high and show no sign of slowing down,” Veul emphasises.

The Pargo Click & Collect business model aims to provide all South Africans with convenient and reliable deliveries to an access point of their choosing.

Consequently, this year, Pargo expects to grow its network of more than 3 500 pickup points, located in the most popular retail stores, including Clicks, Edgars and Lewis Stores, by taking careful consideration of consumer needs, where they live and how and where they prefer to take delivery of their online orders.

“Although growing this network could be fast moving, we will take a targeted, strategic, customer-focused approach in close partnership with our retail clients and pickup point partners to ensure that we scale in the right regions with the right brands and products,” explains Veul.

A range of factors is investigated when identifying a new pickup point, including the safety of the location, access during loadshedding, seasonal operational times, the number of customers in the area, staff in store and visibility of the store.

Pargo has recorded the highest demand in terms of actual orders coming from big cities,but has noted that a significant percentage of orders are destined for hard-to-reach areas, including townships and rural towns.

Most major provinces, including Gauteng, KwaZulu-Natal and the Western Cape, represent the greatest demand, but the company’s recent expansion into further outlying areas, including the townships of Soshanguve and Tembisa, has been followed by rapid adoption since the roll-out, with uptake continuing to trend upwards.

“It's through our extensive roll-out project into more rural areas that we have found a growing market of tech-savvy online shoppers ready and waiting to place their online orders,” highlights Veul.

This growing market is also beneficial to South Africa’s meeting its net-zero emissions target by 2050, with a carbon footprint study released last year revealing that the Pargo Click & Collect product produces 68% fewer carbon emissions compared with standard home deliveries.

In a recent Click & Collect customer survey, 65% of participating consumers revealed that sustainability was important to them.

“It’s no secret that more online sales equals more deliveries and vehicles on the road. This is where we will really see innovation at its best,” says Veul, adding that 60% of participants also indicated that biodegradable and recyclable packaging was also important.

In the long term, Pargo hopes to establish pickup points within ten minutes of every South African.

“We don’t believe that traditional delivery methods, such as home delivery, will ever go away; we simply believe that companies need to offer customers choice.

“Logistics companies or online brands that continue to push delivery services and don’t meet this expectation will see more challenges throughout the year, while those which work towards introducing simple, seamless online delivery that is customer-centric will dominate the market,” he advances.

South African businesses continue their efforts to recover from the economic impact of the Covid-19 pandemic amid the growth of e-commerce in the country. However, Veul expects economic factors to continue to impact on how online orders are delivered to consumers in 2023 and beyond.

Edited by Zandile Mavuso
Creamer Media Senior Deputy Editor: Features



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