Introduction
Sustainability is an issue that is fast becoming a fundamental aspect of commercial success. While delivery services might not be in short supply, having an environmentally friendly delivery service is critical. Sustainable means of transportation become essential when considering the need to minimize carbon emissions as climate change. In the United Kingdom, most start-ups embrace the notion of sustainable business since most consumers are becoming more conscious of the impact product generation and service delivery have on the environment. The concept of sustainable transportation means aligns with the United Nations’ sustainable cities and communities goal.
Eco-Courier will offer transportation services using vehicles and a fleet of environmentally friendly motorcycles to reduce the logistic impacts of carbon emissions associated with service delivery. Based on Statista’s estimation, the number of UK internet users has been on the rise, with a projected 93 percent of users expected to shop online (Coppola, 2021, n.d.). Further, Thompson’s (2018) study on sustainability shows, based on a survey of adults in Australia, China, the UK, and the US, that 83 percent of consumers prefer sustainable organizations. Another 70 percent of the adults from the survey were willing to pay more for environmentally-friendly services (Thompson, 2018, n.d.). Eco-Courier expects to capitalize on the opportunity by transporting products using environmentally-friendly motorcycles and vehicles.
Target Market
The target market for Eco-Courier comprises business-to-business, consumer or small business, and business-to-consumer consignment segments. Internet use plays a significant role in e-commerce; therefore, the need for transportation services is rising. As Coppola (2021) shows, the market size is expected to increase based on internet users. However, in the courier service sector, the market is often segmented based on three significant factors, namely delivery speed, item type, and domestic or international delivery. Consumers from each segment of the market, business-to-business, business-to-consumer, and consumer or small businesses, are increasingly opting for premium delivery services (ResearchandMarkets.com. 2020). The experienced shift in delivery services correlates to how technology supports the business. However, the most significant share of the market is associated with the delivery of domestic services.
In 2017, the top five UK carriers were Royal Mail, Hermes, Amazon Logistics, UPS, and DHL, accounting for 80 percent of parcel shipments in the region. On average, 2017 saw the delivery of 48 parcels per person in the UK (Dawson, 2018, n.d.). To meet the all-important service at an unprecedented rate, it becomes essential that Eco-Courier ensures timely deliveries and emphasizes the use of environmentally-friendly services.
Value Proposition
While Eco-Courier will have environmentally-friendly vehicles and motorcycles, another significant aspect of the business will be the last-mile delivery innovation. The company will have to ensure that while its services are sustainable, minimizing the number of trips within the UK will require consolidating deliveries. Incorporating the use of micro-consolidation centers and smaller warehouses distributed throughout the UK will go a long way in minimizing the total distance traveled (Arvidsson,&Pazirandeh, 2017, 627). By embracing a two-tier system coupled with its environmentally-friendly approach to the business, Eco-Courier will be able to deliver a value proposition centered on sustainability.
To deliver products, Eco-Courier will utilize the concept of crowd logistics enabling it to provide more products in a single trip instead of making frequent trips with fewer products. Another aspect employed by the business will be off-hour deliveries. Using the approach will allow Eco-Courier to increase reliability and efficiency by working with fewer and lower uncertain trip times (Holgiun-Veras et al., 2014, 43). The system will prove beneficial for the business since it will create a platform to deliver inbound processes.
Differentiation of Eco-Courier from Competitors
The critical difference Eco-Courier will have over its competitors is the use of environmentally-friendly vehicles and motorcycles in the delivery of parcels throughout the UK. Eco-Courier will utilize several aspects, like crowd logistics and off-hour deliveries, to minimize the number of trips made through the value proposition. Further, the vehicles and motorcycles used in parcel delivery will optimize software that determines the shortest route to deliver parcels within proximity. The use of this technology will facilitate efficiency in the delivery route. Another practical approach the business employs for short-distant deliveries is that all packages 100 pounds and less will be delivered using the business’s motorcycles, which will rely on delivery urgency.
The services will be categorized into two; the first group of deliveries entails online deliveries. The Business will offer transportation services through a partnership with retail businesses throughout the UK. The second group will involve the delivery of parcels, and for every package to be delivered, the business will always call recipients beforehand to confirm their anticipated delivery time. Eco-Courier will ensure that every delivery is consolidated towards determining the number of products delivered within similar localities in long-haul freights.
Market Research
In business, primary research involves directly talking to existing and prospective consumers within the target market to gather information; however, the process is time-consuming. Therefore, the researcher will conduct primary research for Eco-Courier three months before creating a room where curbs failed due to delayed response. Through surveys, the study will carry out specific and exploratory analyses to gather consumer opinions on the existing services by current couriers (Saunders et al., 2020, 102). The information will be critical in determining what Eco-Courier has to improve on before launching its services. The researcher will utilize secondary research to guide the researchers on what already exists about the industry and the market (Saunders et al., 2020, 104). The information acquired will be significant in providing sufficient information on the existing business strategies and will help decide the best m business approach to use in the sector, particularly in the UK.
The hypothesis in the research, H0: sustainable business practices enhance business performance, will guide the study toward determining the importance of sustainable practices in delivery services. The findings of the research, based on the hypothesis, will give evidence that proves that a relationship exists between sustainable business practices and improved business performance.
Market Strategy
Courier companies are set apart by their ability to deliver packages and similar services quickly and efficiently. Market strategy implementation is critical in the success of businesses, and investing adequate amounts is significant in capturing the consumer’s attention. In a technologically-driven world, the essential strategy to utilize for the Eco-Courier will be relationship marketing. Relationship marketing focuses on consumer satisfaction and retention towards enhancing the relationship between the business and the consumer (Roberts-Lombard,&Tait, 2018, 57). The strategy also facilitates the development of consumer loyalty once satisfaction and retention are achieved. The other approach to be employed by Eco-Courier will work because of marketing (Steckstor, 2012, 76). Since the business is a start-up, the significance of the strategy will be to link the services offered to a social cause, climate change.
Four principal marketing channels exist; direct selling, reverse media, dual distribution, and selling through intermediaries. Based on the three segments in the market, business-to-business, business-to-consumer, and consumer or small business, the business will employ direct selling. Direct selling entails the provision of services directly to consumers (Gage, 2019). Given the nature of the business Eco-Courier will be involved in, there will be no intermediaries between the business and the consumer. Based on the heart of the business, every consumer will have a personal relationship with the company.
Situation Analysis
Industry forces: in the UK, while the market share held five key players is 80 percent, Royal Mail has the highest percentage among the top competitors in courier service. Amazon Logistics is the second-largest player in the UK’s courier service industry, with a market share of 15 percent (Coppola, 2021, n.d.). Royal Mail offers its services at a lower price, and its services are of high quality. Market penetration is comparatively brutal due to the level of competitiveness in the industry.
Market issues: the growth in the UK courier service industry has been majorly contributed to by technological advances and urbanization. The two factors have resulted in the creation of lucrative opportunities that dictate the pace the industry growth. The other significant market issues include the introduction of real-time tracking features that fuel the market’s growth. Another issue is the e-commerce industry’s surge in demand, which is highly controlled by the global courier service industry. With the projections made by Coppola, the sector is bound to encounter unprecedented growth, with more people turning online, unlike traditional shopping.
Key trends: changes in how people work have been essential in determining people’s reliance on courier services. Working from home has resulted in more people doing their shopping online, hence relying on courier services. Sustainability is the other factor that consumers consider when determining the option to use when purchasing (Point Franchise, 2021, n.d.). With climate change being fundamental in consumers’ decisions, more courier companies have adopted sustainable business practices to reach more people.
Macroeconomic forces: the economic surge in the UK has recently been associated with the private sector securing extra employment opportunities that created thousands of new jobs. However, Inman (2021) argues the economy could short-live the surge depending on hold-ups to essential supplies and skilled staff shortages. However, the fall in UK GDP has caused other aspects of the economy to soar (Ryan-Collins, 2021, n.d.). The two, the GDP and increase in employment opportunities, impact the courier service industry in the UK because they contribute to the decisions made about the pricing of services.
Operation and Logistics
The operations of the Eco-Courier will be based on picking and delivering products or parcels to consumers. As early established, the business will operate in two ways. With the first option, the business will form partnerships with local retailers that sell their products online (Holguín-Veras, et al., 2014, 46). Through the partnership, Eco-Courier vehicles and motorcycles will pick products from the retailers and deliver them to the consumers. For success to be realized in the associations and the delivery of clients’ products, the business will have to hire three vehicles and ten motorcycles, which will later be purchased as assets for the business.
For the second option, Eco-Courier will be responsible for delivering parcels to clients through its offices. Customers will drop their boxes at the business’s main office, having filled in the required delivery details, and they will be delivered to the respective customers. However, to achieve this, the business will constantly communicate with customers, those delivering products for shipment purposes, and those on the receiving end of the transaction. Keeping in constant contact with the latter will facilitate Eco-Courier’s ability to customize deliveries based on the client’s preferences. Additionally, as mentioned earlier, communication with the receiving consumers will create room for the business to arrange for consolidation to minimize the number of trips made. For this option, the resources required will be an office and a warehouse, two vehicles, five motorcycles, and human resources for operation.
Business Model
Eco-Courier will employ a business-to-consumer model in its service delivery to its consumers. By developing a computer and mobile-friendly application, the business will interact with consumers and meet their demands without consumers necessarily being present. For the second option of the business, the application will allow the consumers to fill in the details at the reception or their homes and communicate with Eco-Courier on the next appropriate option. If required to collect a parcel from point A to point B, the client will log in to the application, fill in details of the transaction and the contents within the package, and assign the responsibility to Eco-Courier. The customer will then track activities through the application when Eco-Courier receives the consignment. The consumer can then monitor the proceedings as the motorcycles or vehicles move between the designated positions. The same application will allow customers shipping through Eco-Courier vehicles and motorcycles, which deliver products for its partners, to be monitored between packaging and delivery.
For both options, prices will vary depending on the size of the products or parcels and the distance covered. In the choice of containers, every package less than a kilogram will be £0.75 for every kilometer covered. Between one and five kilograms, every kilometer will be charged £1 per kg per km. From 5kgs and above, the rate will be £0.80 per kg per km. The viability of the business, based on the established price margins, will determine the income rate through which the business will be able to calculate every other aspect of the business, inclusive of cash flow.
Conclusion
With the number of online users projected to grow to 93 percent, the demand for logistics and courier services is rising. Further, with the business employing sustainable means of transportation, the desire for the services offered increases. Thompson (2018) has shown that when products and services are sustainable, 70 percent of adults pay extra for the services and products. That shows the business, as long as it is sustainable, is desirable. The feasibility of the business will rely on conducting a feasibility study. A preliminary analysis will be carried out, allowing for the preparation of the business income statement. Later on, a market survey will be conducted, followed by a business operation and organization plan. The two will pave the path for preparing an opening day balance sheet, where a review and an analysis will be carried out. Once the six steps have been fulfilled, the owner will decide whether to proceed with the business or not.
References
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Gage, R. (2019). Direct Selling Success. [Erscheinungsort nicht ermittelbar] Wiley Boston, MA Safari.
Holguín-Veras, J. et al. (2014) ‘The New York City Off-hour Delivery Project: Lessons for City Logistics’. Procedia – Social and Behavioral Sciences, 125, pp. 36–48. doi:10.1016/j.sbspro.2014.01.1454
Inman, P. (2021). UK economy surges but analysts warn boom could be short-lived. The Guardian. Web.
Point Franchise. (2021). Top Four Courier and Delivery Services Trends of 2021.
Research and Markets.com. (2020). Parcels Market in the UK: Business-to-Business, Business-to Consumer and Consumer/Small Business Segment Analysis. Globe Newswire News Room.
Roberts-Lombard, M., & Tait, M. (2018). Relationship marketing and customer relationship management. Landsdowne, Cape Town: Juta and Company (Pty) Ltd.
Ryan-Collins, J. (2021). Is the UK housing bubble about to burst? These are the best and worst scenarios. The Guardian.
Saunders, M. N. K., Lewis, P., & Thornhill, A. (2020). Research methods for business students. Harlow: Pearson.
Steckstor, D. (2012). The Effects of Cause-Related Marketing on Customers’ Attitudes and Buying Behavior. Wiesbaden: Gabler Verlag.
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