Walter Blackwood has, over the course of the 20 or so years he’s worked in retail delivery and logistics, been a pivotal part of some of the most industry-defining developments in the sector. Pre-dating the ecommerce explosion, he was behind the company which went on to become Hermes, and helped create the lifestyle courier role. He was managing director of the Home Delivery Network, now known as Yodel, the UK’s second largest carrier, and also of Collect+. He then switched sides, from supply side logistics to retail logistics, and became director of group operations at Mothercare, and has been a board member at Littlewoods.
Now acting as a consultant, as part of his own W&MB Consulting practice, Walter Blackwood will be giving the opening keynote on Day One of eDelivery Expo (EDX16), and we are – not surprisingly – delighted that he will be doing so. Sean Fleming, editor of eDelivery.net, talked to him about his attendance at EDX16, and asked him his thoughts on how the retail delivery sector is currently shaping up, while touching briefly on his impressive track record.
eD: Was it very difficult making that change from supply side to retail?
WB: Yes, it was. I mean, you’re buying, you’re not selling, so your focus is very much more on your own business as opposed to trying to balance the needs and requirements of different customers in the space. I learned a lot about retail distribution that I didn’t know before, because obviously most of my time I’ve been spent in distance selling rather than in shops.
I think that’s the most fascinating part of it all – the development of the omni-channel world, and having had the experience of working on both sides of the equation has been a significant help.
eD: In recent months, there’s been a lot of interest and speculation in what Amazon’s logistics ambitions might be, whether it will set up as a carrier and go head-to-head with existing carriers. What are your thoughts on that?
WB: I don’t know. There’s some talk of it happening in the States and thing, but then people are saying, well, why would you bother, and there’s something to that. I order from Amazon on a relatively regular basis as a Prime customer, and I see a guy turn up in a white van, no uniform, and he’s perfectly competent and capable and he’s no different from any other owner driver I’ve seen operating.
But that’s the point, he isn’t any different from anybody else. I think the challenge for Amazon is that if you’ve got the leverage to buy services in an effective manner and you can exploit multiple carriers, why would you want to dedicate everything to your own one?
The risk is that you say, alright, I’ve got 100 million parcels to ship and I know that generally speaking I will have a minimum of x 100 thousand a week, then I can do a very efficient bit in the middle by doing that and I don’t really have to invest in peaks because I’ll use everybody else’s.
But then nobody else is going to want to sell you that space because you’re not committing normal volume to it, and it’ll be just nothing but peaks for third parties, so they’re almost too big to do it themselves unless they’re going to set up like a fulfilled by Amazon multi-customer environment.
Well, that’s like going swimming with sharks, why would you put your parcel into an Amazon-owned network, because if you do that, then you can pretty well guarantee that Amazon will get the priority. So while I’m not saying they wouldn’t do it, because I suspect they would see Prime as an opportunity to develop a centralised process, it will not be to the exclusion of everything else. If they do it at all, I think they’ll do it in specific geographies or specific streams. That would be the only sensible thing to do.
eD: What you think are the biggest challenges currently facing multi-channel retail?
WB: I think it’s undoubtedly the convergence of the supply chain and the economics of omni-channel retailing – they’re the two critical challenges we need to understand, yet a lot of investment has been in the opposite direction. It’s been almost developing direct channels as a separate environment, and I think as you can see, more retailers – like John Lewis and Tesco – are charging for low value parcels routed for in-store collection. The economics of it just don’t work if you give free delivery and don’t have minimal viable volumes and values involved.
If you are sending parcels to other stores in your network the incremental cost of doing that is relatively small. But if you use a third party environment, like CollectPlus as just one example, that parcel’s incremental cost is more significant. Now, in the customer’s mind it’s no different to a home delivery and it ought to be free, but the reality for the retailer is different.
eD: We’re looking forward to you attending EDX16 and to hearing you speak. Is anything you’re looking forward to while you’re there?
WB: The world changes and changes faster all the time, it’s an enormously exciting and dynamic sphere to be in. That didn’t seem to be true 20 years ago, but it certainly is now.
My keynote will be a bit about how to manage the economics, if this is going to be 30% of our ecommerce or omnichannel experience, then we have to find ways of making it economically sensible. But there’s a logistics perspective too, of course, which is connected to the challenges of supply chain convergence, and how as logisticians we are going to meet that challenge in the future.
I think we have the ability to bring together all those ideas and innovations, some of which no doubt will grow and flourish and some will die by the wayside.
Having the opportunity to see all those propositions and to discuss and to hear the dialogue and debate, I think EDX16 is going to be a fascinating event.