In early June, Hubbed announced it received a $12 million investment round from The Australian Business Growth Fund. We spoke to the founder and CEO, David McLean, to discuss the investment, what's next for the last-mile landscape and why sustainability needs to be at the front of minds for businesses.
The Australian Business Growth Fund (ABGF) has invested $12 million into the tech-enabled last-mile delivery solution. Founder and CEO, David McLean, says that with this investment, he plans to transform the sustainability of last-mile delivery.
Hubbed is a certified NoCO2 business, driving the PUDO (Pick-Up Drop-Off) service, giving consumers, carriers and retailers an alternative delivery service from their home, and giving shoppers more choice for their parcel delivery options.
We sat down with McLean to discuss the expansion plans, the future of last-mile delivery, and how retailers can reduce the cost of returns.
Congratulations to the team at Hubbed on the $12 million investment from the Australian Business Growth Fund. What are some of the key steps Hubbed plans to take to accelerate its growth?
Our focus will be on two things, firstly accelerating the optimisation of our network in Australia, to ensure we have location to support the choice, convenience and control customers are looking for when collecting or dropping off parcels away from home. Secondly, we will accelerate the development of our platforms and release of new services in support of creating the delivery choices retailers need.
Sustainable retailing is a leading concern for consumers across Australia, but the sentiment doesn’t end with a retailer. Last-mile delivery companies must also take action. What steps does Hubbed take to initiate a sustainable future?
According to a case study by the carbon reduction institute of Australia, delivery to the Hubbed network reduces CO2 equivalent emissions by 0.43kg per kilometre on home deliveries. Simply put, delivering to the Hubbed network is better for the environment than home delivery. This is largely due to the density of volume dropped to our locations, coupled with the fact that most collections are undertaken as a part of an existing trip. Hubbed is working hard at educating consumers about these benefits in addition to ensuring that retailers can seamlessly connect to our platforms and networks so as to offer these delivery choices at the checkout.
Consumers dread receiving a ‘missed delivery’ card, and they are a pain for last-mile couriers, too. How can Hubbed reduce missed delivery rates?
Direct injection into our network is increasing rapidly – this is where customers are offered the choice of redirecting their parcels to Hubbed before home delivery by carriers. In addition to this of course the more retailers that offer ‘click and pick’ from their carts so customers can select our locations at the check out the better.
What makes Hubbed different from other logistics solutions? Is Hubbed easy for retailers to enable?
Hubbed is agnostic, all carriers can deliver and collect parcels from our network, and retailers do not have to make any changes to their existing delivery partners.
Hubbed is seamless, retailers can take advantage of ‘click and pick’ for example by adding Hubbed from their ecommerce platform marketplace such as Shopify, Magento, WooCommerce, Neto, etc.
Hubbed is sustainable, our mission is to reduce congestion and emissions by putting as many parcels through our network as possible.
Payment options are plentiful, but delivery usually is limited to two. Why do you think that is and is it time for a change?
There has been rapid expansion in the payments market over the last number of years and retailers have been adopting the services aggressively in an effort to improve conversion rates. Delivery has never more clearly been a part of the purchase and brand experience; it is increasingly important in an effort to drive conversion rates to offer the delivery choices and sustainability options customers want.
What’s the future of delivery look like to retail?
Last-mile delivery is expensive whilst the demand for faster delivery continues to increase.
We expect delivery options to improve and delivery pricing to change. For example, free returns as standard, is unlikely to remain tenable for many retailers. Offering click and collect or returns services via Hubbed as a way to reduce carrier costs will increase as an alternative service to home delivery.
PUDO – how is this different from C&C, and what are the benefits for retailers and consumers?
Click and collect typically is an offering of omni-channel retailers giving customers the option to order online and collect in one of their physical stores. A PUDO (pick up, drop off) network allows pureplay retailers to offer convenient locations for customers to collect from that are not their own physical stores. The Hubbed ‘click and pick’ service provides exactly this solution for collection and returns. We are fortunate to also have omni-channel customers who wish to increase their delivery options by providing our network in addition to their own stores.
Delivery competition is fierce. What makes Hubbed different from the companies that have the lion’s share of the market, such as AusPost?
When a customer wants to collect or return a parcel other than from home, they typically consider choice of locations, convenience of opening hours and control of the experience. With over 2,200 locations with 24/7 access or extended hours, easy parking and a great customer experience regardless of the carrier Hubbed offers a compelling additional delivery choice for collections and returns.
Returns are a major painpoint for retailers. What are some ways that retailers can help reduce the cost associated with returns?
Hubbed offers highly competitive return rates, in addition to an easy-to-use platform that can be customised for a retailer’s brand. Enabling instant refunds once items are received into Hubbed locations can drive additional conversion with that customer and reduce overall costs. Further increasing the consolidation of returns can drive carrier efficiency which will also drive down costs.
What’s next for Hubbed?
Hubbed has activated networks in both New Zealand and the Philippines with four new Asian markets coming online this year. Further we are expanding our logistics hub solution to support the increasing demand for hyper-local delivery at reduced costs.
Is there anything you’d like to add?
Delivery services must keep pace with customer expectations, retailers need more delivery options to maintain and increase conversion rates on the competition, and logistics are driving demand for more efficiency in the last mile. The retailers that take all of these factors into consideration as they plan for the future are more likely to be successful.
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