As Management Accountants we are interested in trends and how businesses need to adapt.
Lockdown has lead to a big increase in online shopping, but the existing model in its current form is not going to work long term either.
Home delivery not sustainable, says click-and-collect boss Lloyd Dorfman
The businessman is best known for founding exchange business Travelex.
Sir Lloyd Dorfman said home delivery is not sustainable long-term (PA)
By August Graham, PA City Reporter
August 19 2020 12:22 PM
The traditional model of online shopping might need a rethink as it is “not sustainable”, one of the country’s most high-profile businessmen has said.
Sir Lloyd Dorfman, the veteran entrepreneur best known for setting up Travelex, said home delivery is a norm that is creating problems for the industry.
“The whole ecommerce market is not sustainable long-term by having an increasing number of brands running around trying to wait for people to be at home to deliver the things,” he told the PA news agency.
Though best known for Travelex, which he sold years ago, the businessman has an interest in convincing people of this view.
After leaving the currency business in a £1.4 billion deal, in 2014 he focused on Doddle, a click-and-collect expert set up to help companies with returns and deliveries.
Critics have long said more delivery vans and excess packaging mean online delivery has an outsized environmental impact.
In anuary, a report from the World Economic Forum said that without government intervention the number of delivery vehicles in big cities will increase by more than a third in the next decade.
Click-and-collect rather than home delivery is an important way forward for this market and is much more climate friendly
Sir Lloyd Dorfman
That would push up emissions by 32%, and add an extra 11 minutes to the average daily commute as congestion leaps by 21%.
Sir Lloyd was speaking as Doddle signed a deal to partner with Yamato, a Japanese delivery giant which ships 1.8 billion parcels a year.
He said 99% of items bought online in Japan are still delivered directly to the front door of the shopper.
“Long-term that’s not sustainable from a climate point of view or from a cost point of view,” he said.
“Click-and-collect rather than home delivery is an important way forward for this market and is much more climate friendly.”
Online retailers are also regularly blamed for the decline of high streets around the world.
In recent months more than 41,000 workers have lost their jobs in major culls at UK retailers, many of them on the high street, according to analysis this week from the PA news agency.
Though much of this is due to the chaos caused by the pandemic, the high street had already been in decline for years, losing customers to online giants and minnows alike.
“The e-commerce market was already growing exponentially, and Covid has propelled that expansion,” Sir Lloyd said.
But as to whether online retailers should be made to help the sector they are pushing out, he is less sure.
“I don’t think you should force them to do things that are not in the interest of their business, and the heavier obligation is on the high street to reinvent what they do and how they do it.”
But, he added, online giants do sometimes invest in the high street if they see an opportunity to make money, pointing to Amazon’s takeover of Whole Foods in 2017.