Share Me the Money

How can a B2B sharing economy business model disrupt how we think and do business? Thinking in shared product service systems, it is possible for businesses to cooperate and compete within the same sphere while improving KPI’s, customer satisfaction and revenue.

Sharing economy has substantially affected businesses in the post financial crisis era of consumption. People are increasingly shifting focus from owning to sharing, which leaves several benefits and threats in its wake. This whitepaper will take off by explaining what sharing economy is and can be seen as, and then explore how the turbulence of this market structure can affect whole industries and how companies safely can land on the sharing economy runway.

A broad definition of sharing, and thus the modifier of the specific economic concept, by Matzler, Veider and Kathan, is: “Sharing can be anything to which access is enabled through pooling of resources, products or services” . Subsequently, the concept can further be divided into three main types: Product service systems, redistribution markets and collaborative lifestyles . Common for all types is that the consumer is seen as the client and user of the product or service. B2C, C2C, and P2P (peer-to-peer) might be the obvious constellations of business models - just think of Uber disrupting the taxi business by offering software that enables peers to find each other and arrange car-pooling. Similarly, Airbnb has disrupted the hotel business by facilitating peer-to-peer house and apartment lodging.

B2B sharing economy will also eventually launch. New innovative and creative ideas and business constellations will join forces to create new markets and business models in existing mature markets. Nevertheless, for a B2B sharing economy to be possible, established companies will have to accept a new business model, where corporations, that would otherwise be competing, come together to offer consumers cost-efficient, publicly accessible, convenient and superior services. If companies can accept this, sharing economy has unresolved B2B potential of substantial magnitude.

The parcel logistics industry can potentially take advantage of thinking in B2B sharing economy business models. The industry is characterized by several players offering different solutions with a similar objective – carrying parcels from seller to buyer. Pricing, service level and methods vary from one logistics provider to the next, but all carriers face the same challenges: providing excellent service with a cost-efficient business model. Consequently, logistics providers have set up individual and segregated distribution networks, consisting of home delivery, PUDO’s (pick up/drop of), MSPs (Manned service points), and parcel lockers, of which the latter has proven to be an efficient method because they operate on the consumers’ terms.

However, if every logistics provider sets up individual parcel locker networks, our cities will soon be overbooked with parcel lockers – an inefficient and costly operation for everyone - including logistics providers and consumers. B2B sharing economy, or carrier agnostic parcel locker networks, might be the key to a functional parcel logistics infrastructure in the future.

The Merriam-Webster dictionary defines agnostic as: “not preferring a particular device or system” . In the context of a network being carrier-agnostic, the concept extends to denote that a network is open to multiple carriers – open networks and agnostic networks are used as synonyms in this whitepaper. Thus, the network and its operator(s) do not prefer one carrier over the other, and the network is shared among multiple carriers. This notion leads to how sharing is defined and how the term is integrated into businesses.

In an article posted in Parcel and Postal Technology International, Ian Kerr, founder and host of the Postal Hub Podcast, and Marek Różycki, Managing Partner at Last Mile Experts, agree that carrier agnostic parcel lockers are here to stay . According to Kerr and Różycki, parcel lockers offer ecological benefits from delivering several parcels to the same point with first time success in addition to economic advantages. Also, Kerr and Różycki conclude that density (of the parcel locker network) is key and opening the network to multiple carriers is one way to realize a dense parcel locker network. Kerr and Różycki emphasize that parcel locker networks only make sense when offered at scale, making the network dense and broad - they argue that it will take about 8,000 parcel lockers to accommodate and cover a country the size of Germany.

Density is exactly what Danish parcel locker supplier SwipBox has taken to an unprecedented level with their new parcel locker infrastructure, Nærboks, in collaboration with PostNord, the leading logistics provider within the Nordic region . In 2019, the network was tested during a pilot and has since been expanded across Denmark. The pilot started in Kolding, where 200 parcel lockers were installed, which corresponds to a ratio of approximately 1 locker per 650 people. This ratio stands in sharp contrast to Kerr and Różycki’s estimate of a 1:10,000 ratio as an absolute minimum, ensuring convenience for the citizens. As of January 2020, PostNord and DHL are part of the network as logistics providers and thousands of parcel lockers are being installed across the country before the network is opened up to other logistics providers, making the parcel logistics infrastructure network truly agnostic.

For a dense parcel locker network to be tenable, Kerr and Różycki argue that companies should team up with their competitors and gain the advantages of a cost-efficient, consumer convenient parcel locker network as delivery infrastructure. This implies that logistics providers that are not willing to team up and join the shared business model will be left with an inefficient, inconvenient and incapable service. The future belongs to shared economy - a future where the winners share it all!

1. Kurt Matzler, Viktoria Veider and Wolfgang Kathan in MIT SLOAN Management Review, December 16, 2014
2. Rachel Botsman & Roo Rogers, What’s Mine Is Yours: The Rise of Collaborative Consumption, February 3, 2011
3. https://www.merriam-webster.com/dictionary/agnostic
4. Why carrier-agnostic parcel lockers are the future
5. PostNord and SwipBox expand their pilot in Denmark