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Out-of-Home Delivery as a Solution of the Last Mile Problem in E-commerce

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DOI: 10.1007/978-3-030-61947-3_2

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Out-of-Home Delivery as a Solution
of the Last Mile Problem in E-commerce

Arkadiusz Kawa

Abstract According to the report Urban Logistics Opportunities-Last-Mile Innova-

tion, prepared by Frost & Sullivan, expenditure on logistics in the world is expected
to reach USD 10.6 trillion in 2020. 70% of these expenses will be generated by
transport and as much as 40% by last mile deliveries. In addition, there are many
social costs associated with urban supplies−traffic jams, noise, pollution, etc. As a
result, more and more logistics service companies and e-tailers are making changes
to eliminate the effects of problems arising from deliveries to individual customers.
These include both relatively easy organizational improvements and more complex
solutions that require investment. One of them is out-of-home delivery. The subject
of out-of-home delivery in e-commerce is a relatively new research area. There are
very few studies conducted on last mile so far have focused on alternative delivery
methods, especially its impact on satisfaction and loyalty of e-customers. That is
why the goals of this chapter are to identify the components of out-of-home delivery,
and to present their influence on satisfaction and loyalty in e-commerce. The studies
are empirical and are based on primary data. CATI (computer-assisted telephone
interview) was selected as a technique of information collection, which had been
preceded by FGIs (focus group interviews).

Keywords Last mile · E-commerce · Out-of-home delivery · PUDO · Parcel

lockers

1 Introduction

The Internet and its accompanying services have had a major impact not only on
the society but also on the economy since the very beginning of their develop-
ment. Recently, this impact has been increasingly noticeable. Nowadays, more and
more managers are indicating that the digital transformation is taking place in their
companies. This applies to communication, sales and distribution channels. Digital

A. Kawa (B)
Poznan University of Economics and Business, al. Niepodległości 10, 61-875 Poznań, Poland
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2020 25

P. Golinska-Dawson et al. (eds.), Smart and Sustainable Supply Chain
and Logistics – Trends, Challenges, Methods and Best Practices, EcoProduction,
https://doi.org/10.1007/978-3-030-61947-3_2
26 A. Kawa

and physical processes are increasingly intertwined, creating omni-channel systems.

This is particularly evident in commerce, which is gradually moving to the Internet.
The value of the world trade was USD 25.04 trillion in 2019. USD 3.54 trillion was
generated by e-commerce, representing 14.1% of the total retail sales. E-commerce
is projected to grow to $6.54 trillion and will account for 22% of the total retail sales
in 2023 (eMarketer Global Ecommerce 2019).
Currently, almost all products that can be bought in stationary stores are sold via
the Internet, such as: apparel, footwear, consumer electronics, books, movies, music
& games, personal care products, furniture & homeware, household appliances, food
& beverages, toys & baby products.
Due to the lack of geographical limitations, the possibilities of buying and selling
are even greater, as almost everyone can be a customer. The only restriction is logis-
tics, especially product delivery to the customer. It is not always possible to deliver
a product to every place, because not all sellers offer such an option.
E-commerce logistics is associated with many challenges. Until the time of the
dynamic development of e-commerce, CEP (courier, express and parcel) operators
served mainly companies, i.e. the senders and recipients were businesses (B2B).
Currently, a large proportion of shipments is sent to individual customers (B2C). The
main difference between the two segments lies in the different time windows (time
slots) (Faugere and Montreuil 2016) in deliveries to individuals and companies. Very
often, at the time of delivery, recipients are outside the indicated address, which may
cause inconvenience to the courier company and generate higher costs. In addition,
CEP operators frequently compete with each other with low prices. B2C also causes
gradual cannibalisation of B2B—end customers skip middlemen. Another challenge
for e-commerce logistics is the relatively high variability of demand (seasonality of
demand, Christmas peak, accumulation of orders during the day, week, etc.) and
fragmentation of orders, which means frequent shipments of small batches of prod-
ucts. It is troublesome to send non-standard goods and difficult to deal with shipments
incorrectly labelled by shippers, e.g. recipient’s wrong address, incorrect postal code,
no phone number of the recipient.
Online shopping has accustomed customers to convenience. They can look for
products and order them anytime and anywhere. They also have similar expectations
in relation to the way they have their parcels delivered—they want to have influence
on where and when they receive their e-shopping. In addition, this overlaps with the
extended working time and an increasingly active lifestyle. Therefore, e-commerce
and its operation have an impact on the logistics services. E-customers do not only
want to receive the ordered product quickly and get free shipment, but also to pick
it up at any place and time.
Most of the goods ordered via the Internet are delivered by courier to the indi-
cated location. Door-to-door deliveries are not always convenient because either the
customer has to wait for the courier at home or s/he is away when the courier tries
to deliver. Therefore, alternative services have been created to solve this problem.
These include late hour deliveries and pick-up and drop-off points, automatic parcel
terminals (Kawa and Różycki 2018).
Out-of-Home Delivery as a Solution of the Last Mile Problem in E-commerce 27

Out-of-home delivery services are certainly more convenient for CEP operators
because they reduce the last mile problem. They are therefore increasingly popular
and promoted by e-commerce entities. However, a question arises whether customers
are willing to use such services and whether they are satisfied with them.
The subject of out-of-home delivery in e-commerce is a relatively new research
area. There have been very few studies conducted on the last mile so far, and they
have focused on alternative delivery methods, especially their impact on satisfaction
and loyalty of e-customers. That is why the goals of this chapter are to identify the
components of out-of-home delivery, and to present their influence on satisfaction
and loyalty in e-commerce.
The studies are empirical and are based on primary data. CATI (computer-assisted
telephone interview) was selected as the technique of information collection, which
had been preceded by FGIs (focus group interviews).
The chapter consists of 9 sections. The structure of this chapter is as follows.
The last mile issue is described in Sect. 2. In Sect. 3 the door-to-door delivery
method is presented. Section 4 introduces out-of-home delivery method, especially
parcel lockers and PUDO points. The relationship between out-of-home delivery
and customer satisfaction is outlined in Sect. 5. In Sect. 6 methodology of research
(research stages, data gathering, and measures) are described. The analysis and
results of research are discussed in Sect. 7. In Sect. 8 the development directions
are given. Section 9 concludes the chapter and presents managerial implication,
research limitations, and further research steps.

2 Last Mile

At the beginning, the Internet was mainly used for cooperation between companies.
As already mentioned, B2C transactions are now beginning to dominate e-commerce,
where the product is ordered by individual customers and sent by businesses. In both
B2B and B2C, the so-called last mile service emerges. It is the last stage in the
transport of a parcel by courier to the place designated by the customer. Most often,
the parcel goes to the customer’s place of residence or work.
The last mile is also called “the last leg of the delivery process from a regional
depot to the recipient” (Orenstein et al. 2019) and “the final leg of the journey where
a product lands in a consumer’s hands” (Capgemini 2019).
The last mile is one of the most important phases of the online order process and
is a critical touchpoint in the e-customer journey (Vakulenko et al. 2019) because
that is when the only direct contact between the courier company and the recipient
takes place. The courier becomes a representative of the seller.
This is often the weakest link in the supply chain—the service quality at the last
stage is decided by the person who delivers the shipment on time and in the right
condition, while logistics processes at other stages are automated and optimized. It
is worth to add, however, that the last mile phenomenon is not only a feature of e-
commerce. It also includes supply from municipal warehouses or distribution centres
28 A. Kawa

and transfers between branches. According to KennisDC Logistiek (2017), 80% of

urban transports are currently performed by companies on their own, not by profes-
sional logistics service providers. This leads to lower efficiency in urban transport
networks because of the lack of load consolidation from many senders. It creates
many social costs associated with urban supplies−traffic jams, noise, pollution, etc.
(Kawa 2019a).
Handing the last mile is the most difficult process in e-commerce logistics. Each
parcel is first picked up by a courier from the warehouse and then delivered directly
to the customer. As a result, about 100 parcels require almost the same number of
repeated actions. What is important is that the courier still has to correctly identify
the recipient’s address and set the delivery route accordingly, so that it is optimal. In
addition, the customer must be at home at that time to be able to pick it up.
That is why the last mile is related to a significant part of the costs in the CEP
industry (McKinsey 2016; Orenstein et al. 2019). According to the report Urban
Logistics Opportunities—Last-Mile Innovation, prepared by Frost Sullivan (2017),
expenditure on logistics in the world is expected to reach USD 10.6 trillion in 2020. 70
percent of these expenses will be generated by transport, and as much as 40 percent
by last mile deliveries. That is why more and more logistics service companies
and e-tailers are making changes to eliminate the effects of problems arising from
deliveries to individual customers. These include both relatively easy organizational
improvements and more complex solutions that require investment (Kawa 2019a).
Just like companies, local authorities are trying to reduce the negative effects of
vehicle traffic, particularly in city centres (Sitek and Wikarek 2019). They regulate
the principles of organizing the delivery of goods and courier shipments in selected
areas of the city and indicate the types of vehicles and their drives. Restrictions apply
to the times of the day in which deliveries can be made, and the time of loading and
unloading goods (Kawa 2019a).
The key to success in the last mile is effective logistics solutions and good commu-
nication with the recipient. For example, according to the World Economic Forum,
“advanced analytics and Internet of Things-based solutions such as load-pooling and
dynamic re-routing could contribute to an overall scenario that reduces emission by
10%, unit cost by 30%, and congestion by 30%” (Vakulenko et al. 2019).

3 Door-to-Door Delivery

Until a few years ago, products ordered via the Internet were delivered mainly by
courier companies and postal operators. The dynamic development of e-commerce
has made CEP services available to the public (mainly through courier brokers). The
biggest advantages of courier services are the door-to-door system and short delivery
time. Neither the sender nor the recipient of the shipment have to go out to use this
service (for this reason the service is more and more frequently treated as a premium).
Delivery is usually made by the next working day. The disadvantages of this solution
are quite high a price of the service, lack of information about the exact delivery date
Out-of-Home Delivery as a Solution of the Last Mile Problem in E-commerce 29

and difficulties in determining the correct address, or the addressee’s absence. The
last problem is the biggest one. Some customers feel the stress of not being at home
when a parcel is being delivered (Faugere and Montreuil 2016). That is why avoiding
the need to synchronize with the courier is desirable for many recipients (Orenstein
et al. 2019). This problem is solved by the customer indicating the workplace as the
place of delivery. However, some employers do not allow parcels to be picked up
at work due to the fact that these are private matters for employees. The greatest
problem, however, is that customers have to adapt their schedule to the wide window
of delivery time and wait for the parcel at home (Faugere and Montreuil 2016). In
the case of postal delivery, in turn, the biggest advantage is the price of the service.
A disadvantage is longer time than in the case of courier deliveries and a lower level
of customer service. In addition, parcels often must be collected from the post office,
and these places are often crowded by other customers.
CEP operators undertake various actions to eliminate the effects of problems
arising from deliveries to individual customers (Vakulenko et al. 2019). These include
both relatively easy organizational improvements and more complex solutions that
require investment. One solution is to send information to the recipient about an
incoming shipment (Sitek and Wikarek 2019). This allows the recipient to better
prepare for the collection of the shipment, which increases the effectiveness of deliv-
eries at the first attempt. Another solution that improves the final delivery stage is
the possibility to pay for COD orders by card. An even better solution is to adjust
the delivery time of shipments to the time when the recipient is present in the place
of residence. Shipments to individual customers are therefore delivered in the after-
noon and evening hours. On the one hand, this reduces the number of undelivered
shipments, but does not eliminate them completely, as some of the addressees are
not present at the indicated place of delivery at that time, either.
CEP operators also offer the possibility to manage the place and time of delivery.
It is possible thanks to special IT tools designed to support interactive delivery
management. The customer receives information about the incoming shipment well
in advance and can either redirect it to another location or change the delivery date,
or select a delivery period to a specific address. Due to the fact that couriers need to
service a large number of clients (mainly business) during the day, it is an expensive
solution because it requires additional staff (Kawa and Różycki 2018). Another way
is to enable the customer to dynamically change the place and time of pickup. The
customer receives information about the upcoming shipment in advance and redi-
rects it to another place or delays its delivery. This increases the number of effective
deliveries and reduces the number of empty runs. On the other hand, the option
of changing the delivery time or adding a time window requires reorganization of
the couriers’ work, which increases the operating costs of the CEP operator (Kawa
2019a).
30 A. Kawa

4 Out-of-Home Delivery

The solution to the delivery problems related to the door-to-door system is out-of-
home (OOH) delivery. It consists in delivering a shipment to a point or machine that
is in a convenient place for the customer. Such a parcel can be picked up on the
customer’s commuting path at convenient time, within a time frame of some days
(Faugere and Montreuil 2016). It allows to consolidate last mile shipments (Orenstein
et al. 2019; Sitek and Wikarek 2019), which increases delivery efficiency and can
reduce delivery costs. Resources (cars, couriers) and processes (dropping off more
parcels at the same location decreases the number of stops required and eliminates
unsuccessful deliveries due to an absent recipient) (Faugere and Montreuil 2016)
are reduced. Moreover, both the delivery costs and the average delivery time are
significantly decreased (Orenstein et al. 2019).
However, out-of-home delivery involves the customer in the last mile process.
Customers must do some of the work that the courier normally does, i.e. they must
go to the OOH point and pick up their parcels by themselves (Orenstein et al. 2019).
OOH is most commonly found in two forms: parcel locker and PUDO (pick up
drop off) point. Currently, they are some of the key trends in the last mile logistics.
They are also the fastest growing service and the most frequently chosen form of
parcel delivery in China, Germany, Great Britain, France, Belgium and, also, in
Poland. In the further part of the paper they are described in detail.
Parcel Lockers
An automated parcel machine (APM), or just a parcel locker, is a machine that is used
to drop off and pick up parcels. Most often, it consists of several boxes. Therefore,
they are also referred to as secure locker banks which group reception box units
(Businesswire 2019; Iwan et al. 2016). Lockers are interconnected with the hub and
spokes system through the Internet of Things (Faugere and Montreuil 2016). Such
devices are most often open 24/7 and are fully self-serviced, so they are also called
unattended delivery (McKinsey 2016). They can be accessed via digital pickup codes,
QR codes or a mobile application (Orenstein et al. 2019).
Such machines are usually located in easily accessible places and highly
frequented areas, such as public premises, public transit stations, public locations
in living neighbourhoods (Faugere and Montreuil 2016), e.g. at train or bus stations,
gas stations (Orenstein et al. 2019). An advantage of this solution is that the customer
can indicate a convenient location and pick up the shipment at any time, so it is a good
solution for customers who are more mobile, flexible and want to have freedom. For
this reason, they are called “born out of the frustration of failed deliveries to shoppers
who aren’t home” (Orenstein et al. 2019). A disadvantage is that the customer has to
bother to go to such a point, and so “to make the final leg of the journey” (Iwan et al.
2016). There are also limitations in terms of size, shape and weight of shipments. In
addition, there are no or relatively few facilities of this kind in rural or less populated
areas. This can be an obstacle for people who are unable to collect the parcel, e.g.
Out-of-Home Delivery as a Solution of the Last Mile Problem in E-commerce 31

because of their disabilities. There is also a problem with larger goods, such as refrig-
erators, washing machines, garden equipment and tires. Parcel machines restrict the
weight and dimensions of a shipment. Large products are still delivered directly to
the address indicated (Kawa 2019b).
Delivery services to parcel lockers are provided by both CEP operators (e.g. DHL
PackStation in Germany, InPost in Poland), marketplaces (Amazon, JD.com) and
independent companies (Hive Box, SwipBox). In this case, the last mile service is
much easier and cheaper for the CEP operator. The courier transports a lot of parcels
at one time and delivers them to one specific location (Kawa 2019b).
More and more often, parcel lockers are equipped with new functions. For
example, they can be used for cash on delivery, to withdraw money (ATM func-
tion), charge a car or scooter (e.g. InPost), pick up groceries (automated food locker
by Cleveron). For this reason, they are also called smart lockers terminals (Faugere
and Montreuil 2016).
Parcel lockers usually have an on-line connection to the system of the network
operator and update information when the status of a parcel changes (delivered,
waiting for pickup, collected). Thanks to that, it is possible to track which lockers
are empty or full (Businesswire 2019).
Apart from parcel lockers, there are other solutions that have a similar function.
These are: a reception box—a locker which is permanently fixed to the wall outside
the customer’s house; a delivery box—a box of goods temporarily attached to the
wall of the customer’s house, which is accessible by means of a lock; controlled
access systems—a solution that allows the courier to access a closed area in order to
leave the goods inside, e.g. in a garage, car trunk (Iwan et al. 2016).
In addition to convenience, the benefits for companies and the environment are
also important. According to the World Economic Forum, they can “reduce delivery
costs by 2–12% and, at the same time, ease congestion by 5–18%” (World Economic
Forum 2020).
PUDO Points
PUDO are special points where one can drop off or pick up parcels. These points are
located in places that are relatively easy to access and that are regularly visited by
customers. They often have long opening hours (Iwan et al. 2016) and they are near
the recipient’s home or office address, or in the recipient’s favourite shopping mall
(Orenstein et al. 2019). Special points are located in places such as grocery stores,
newsagent’s, traffic kiosks, shopping malls and gas stations (Kawa 2019a).
This service originated from the click & collect concept, which was initially
developed by companies trading mainly in fixed locations (e.g. retail chains), but
gradually moving part of their sales to the Internet. Thanks to it, customers did not
have to wait for the courier and pay for the delivery (Kawa and Różycki 2018).
The points where one can pick up and send a parcel are not a new solution. Such
places existed much earlier, and they were post offices. It was only a few years ago
that CEP companies, which had problems with undelivered parcels to individual
customers, noticed them.
32 A. Kawa

PUDO eliminates problems related to determining the correct address or the recip-
ient’s absence from home. Using this type of delivery is really simple. When shopping
on the Internet, it is enough to select the appropriate point in the area and pick up
the shipment there later. When choosing a point, the customer pays attention to the
distance from the place of residence or work, so the density and distribution of the
facilities are important, too (Kawa and Różycki 2018).
Currently, there is a very strong trend towards the development of the PUDO
service, which is why CEP operators continue to expand their network of points
independently and through external partners. They promote it as convenient for the
customers—they can pick up or send a shipment at a chosen place and time. Due to
greater consolidation of shipments, the cost of delivery to the points of sending or
collecting a parcel is lower than the cost of door-to-door courier services. However,
this does not always mean a lower price for the customer. Some shipments are
redirected after the courier cannot effectively deliver the package to the addressee,
and some go directly to the PUDO points. This creates the cost of the delivery to the
points and the cost of handling shipments at those points. Yet, because of the growing
costs of the last mile (mainly due to rising labour costs), the differences between the
prices of direct delivery and that to the points will keep increasing.
A drawback of PUDO is the limitation of the service availability through the
opening hours of the points, which has become an impulse to automate the service
on the basis of the previously described self-service terminals offering 24-h access.
PUDO is characterized by, similarly to parcel lockers, limitations on size, weight,
etc. of the shipments to be accepted.
Most points are available through only one operator. This means that the customer
cannot pick up all products in one place. For this reason, agnostic networks that
include multi-brand services are needed. In such points customers can pick up and
drop off parcels from different CEP operators. However, this requires cooperation
between competitors (World Economic Forum 2020).
The pick up and drop off points are also a very effective solution for the CEP
operators and online retailers, as they involve fewer questions from recipients who
automatically receive information about the status of their shipment. They also reduce
the number of undelivered shipments due to the recipient’s absence. PUDO points can
be successfully used for returns. Recipients can easily and cheaply, and sometimes
even free of charge (depending on the seller’s offer), send back the product (Kawa and
Różycki 2018). As the OOH network develops, CEP operators expand their services
by opening special points. For example, the DPD Pickup’s and GLS’s offer includes
many additional services, including shipment insurance, international shipping and
cash on delivery. Customers who buy clothes or shoes online can try their order on
in the dressing room and return it immediately, if necessary.
Out-of-Home Delivery as a Solution of the Last Mile Problem in E-commerce 33

5 Out-of-Home Delivery and Customer Satisfaction

A network of PUDO points and parcel lockers is currently an important element

in the development of CEP operators and e-commerce companies. This is related
to the growing challenges for city logistics and the requirements of city residents.
On the one hand, this solution reduces the volume of courier traffic in cities, and
on the other hand, it gives the customer the freedom to decide how and when to
collect his/her order sent from the online store. The operators’ priority is to give their
customers the greatest convenience and flexibility possible in using courier services
and the possibility to choose between deliveries: to their own hands, to their home,
workplace, parcel locker or PUDO point. This makes the customer shopping online
more satisfied (Faugere and Montreuil 2016), and causes a feeling that the e-tailer
understands their needs, which later leads to recommendation to buy at a specific
shop.
On the basis of the above considerations, the following hypothesis has been
formulated:
H1: The out-of-home delivery has a positive impact on customer satisfaction in
e-commerce.
Numerous studies show that customer satisfaction leads to increased customer
loyalty (Cyr 2008). If a customer is satisfied with their online shopping, it is very
likely that they will buy this product again or choose the same seller the next time.
This observation leads to another research hypothesis:
H2: Customer satisfaction has a positive impact on loyalty in e-commerce.
The out-of-home delivery can directly affect the loyalty variable. Therefore, a
research hypothesis has been put forward which is as follows:
H3: The out-of-home delivery has a positive impact on customer loyalty in e-
commerce.

6 Methodology of Research

Research Stages
In this study, a quantitative method was used to investigate the dependencies between
out-of-home deliveries and customer satisfaction and loyalty. It was preceded by an
in-depth literature analysis, presented in the previous parts of this paper, which was
used to prepare a qualitative method for the research. Using this method was aimed
at preliminary analysis of the problem of the last mile in e-commerce and providing
information necessary for proper organization of the research with the quantitative
method, including first of all designing the measuring instrument (questionnaire).
A focus group interview (FGI) was chosen as the research technique. The selection
of respondents for the study was purposeful. The results of these interviews (Kawa
34 A. Kawa

et al. 2019) have become the basis for the preparation of the next step of research—
study of online retailers with the use of quantitative research. A tool in the form of
a questionnaire was created.
Data Gathering
In the third stage of the research, both computer-assisted web interviews (CAWI)
and computer-assisted telephone interviews (CATI) were applied. The investigation
was carried out between November 2017 and May 2018 by a research agency. The
database of polish online retailers was the sample of the study. Approx. 6 thousand
representatives of online retailers were invited to take part in the investigation with
usage of non-random purposeful sampling. It was 20% of the total population of
e-tailers in Poland. A restrictive condition, as in the FGI, was that each participant
in the interview had to conduct selling activity on the Internet for at least one year
as a necessary condition. A return ratio was 10%. We received 592 correctly filled
questionnaires—392 interviews from CAWI and 200 from CATI. This sample is
sufficient to generalise our results for the entire population of the polish e-tailers.
An acceptable margin of error is 3.99% with assumption that the confidence level is
95% and the response distribution is 50%.
Measures
Three constructs (latent variables) were distinguished in this research: out-of-home
delivery, customer satisfaction and loyalty. Based on an in-depth literature analysis
and results of focus group interview, the items of these variables have been devel-
oped. They have been included in the questionnaire in the form of statements. The
respondents evaluated these statements with the use of a five-point Likert scale. In the
case of the loyalty measure, the respondents were asked to compare their parameters
with those of other online retailers.
Out-of-home delivery was measured by the possibilities of picking up goods
ordered via the Internet (excluding door-to-door deliveries). Customers can buy prod-
ucts from online sellers who offer deliveries to PUDO points, self-service terminals
(e.g. parcel lockers), as well as the click & collect solution. Satisfaction was related to
the customer’s happiness with their purchases, their feeling that the seller understood
their needs and that they would recommend purchasing from the same seller to their
family or friends. Loyalty, in turn, referred to buying again from the same seller in
the near future, even if the conditions changed, i.e. the products, their delivery and
payments offered by other vendors would be more competitive (Cyr 2008).
With the results of the interviews, the exploratory factor analysis was used in order
to find the indicators with the highest loading values. The validity and reliability
analysis by the Cronbach’s α method has been used for this purpose. All Cronbach’s
α were above 0.7, indicating satisfactory internal consistency of variables (see Table
1).
Out-of-Home Delivery as a Solution of the Last Mile Problem in E-commerce 35

Table 1 Constructs, items and scales of the out-of-home delivery, customer satisfaction and loyalty
variables
Out-of-home (OOH) delivery
Cronbach’s alpha =0.74
• Customers buy from online sellers who offer deliveries to PUDO (pick up drop off) points
(e.g. a traffic kiosk. gas station)
• Customers buy from online sellers who offer deliveries to self-service terminals (e.g. parcel
locker)
• Customers buy from online sellers who offer click & collect solution
Customer satisfaction
Cronbach’s alpha =0.78
• Customers are satisfied with their purchases
Customers will buy again at my shop in the near future
• Customers feel that we understand their needs
• Customers will recommend buying at my shop to their nearest and dearest
Customer loyalty
Cronbach’s alpha =0.81
• Customers will continue to buy with them. even if the products offered by other online
retailers are more competitive
• Customers will continue to buy with them. even if the delivery of products offered by other
online retailers will be more competitive
• Customers will continue to buy with them. even if payments for products offered by other
online retailers are more competitive
Source own elaboration

7 Analysis and Results

We analysed the data using one of the statistical measures—Pearson’s correlation

coefficient, which is particularly appropriate for testing hypotheses. In this way, it was
possible to confirm that the correlations were not accidental and allowed to generalise
the results of the conducted tests with a sufficiently high degree of probability (Kawa
2019b). The empirical models include out-of-home delivery (OOH), satisfaction, and
loyalty variables, and the interaction between them. Table 2 reports means, standard
deviation, and Pearson’s correlation coefficients for all variables used in this study.
Our empirical testing has shown that all hypotheses have been supported (see
Fig. 1). The out-of-home delivery has a positive influence on the satisfaction and the
loyalty variables. These correlations have been statistically significant but not too

Table 2 Descriptive statistics

Variable Mean S.D 1 2 3
1. OOH delivery 3.62 1.11 0.17* 0.134*
2. Satisfaction 4.01 0.92 0.444*
3. Loyalty 3.27 1.13
** p < 0.01; N = 592

Source own elaboration

36 A. Kawa

Fig. 1 Confirmed correlations between the out-of-home delivery, customer satisfaction and loyalty
variables **p < .01. Source own elaboration

strong. The strongest statistically significant relationship has been found between
the satisfaction and the loyalty variables. The research conducted has confirmed that
delivering the right value to the customers increases their satisfaction, which in turn
translates into customer loyalty and, further, into repurchasing (Chiou and pan 2009;
Chiu et al. 2009; Vakulenko et al. 2019). So, deliveries in e-commerce are a very
important component of value for the customer. It means that the more attention a
customer pays to out-of-home delivery, “the more satisfaction they get from shopping
and the more loyal they are, and thus the more they spend on shopping” (Kawa
2019b). Consequently, the sellers of goods who take alternative deliveries seriously
can expect better performance than their competitors.
It is important that the out-of-home solutions are created by entities supporting e-
commerce and providing complementary services, such as logistics, or parcel service.
This means that all e-commerce stakeholders should pay special attention to the issue
of alternative ways of deliveries, because creating value from them for the customer
will bring them benefits.
The results and conclusions are very important from a scientific perspective,
because the impact of the out-of-home delivery on the customer satisfaction and
loyalty, in particular in e-commerce, is rarely mentioned in the literature (Kawa
2019b).
Out-of-home deliveries are not only PUDOs in the form of traditional points and
parcel lockers, but include many other solutions that various e-commerce stake-
holders are working on. An interesting idea is personal parcel boxes, which can be
located at the place of residence. They fulfil a function similar to traditional mail-
boxes, but have greater capacity. Thanks to them, the courier or postman can leave a
parcel in the box, even if the customer is not at home. The customer can also send a
parcel. The box combines the advantages of courier deliveries (delivery to the door)
with those of automatic parcel lockers (possibility to pick up the package at any
Out-of-Home Delivery as a Solution of the Last Mile Problem in E-commerce 37

time). The parcel box can also handle returns. For the time being, such solutions are
mainly in the phase of testing or initial development, but in a few years’ time they
may become widespread, especially in the case of detached and terraced houses.
Another way to deal with the last mile problem is to use cars as mobile PUDOs.
When ordering products, the customer indicates his/her vehicle as the place of
delivery. The courier uses a disposable digital key to open the trunk and place the
package in it. Then, information about the delivery is sent to the customer. Such solu-
tions are tested or applied by retailers (Amazon), car manufacturers (Volvo, BMW,
Audi) and CEP operators (DHL). Similarly, a parcel can be left in a specific part of
the house (e.g. garage).

8 Development Directions

The question about the direction in which alternative means of delivering products
ordered over the Internet will develop is very difficult to answer unequivocally. Until a
few years ago, PUDO was used marginally and parcel lockers were at an early stage of
development. Today, it is difficult to imagine trading over the Internet without them.
However, new disruptive solutions may appear which will replace the previous ones.
The role of independent integrators is likely to increase in the near future. They
will consolidate the services of different entities in one place according to the one
stop shopping concept. In addition to the CEP operators, whose domain will be
transporting parcels from point A to point B, entities that will offer competence in
sending and receiving parcels will be very important. This is not only about the
physical points, but also about technology companies that will provide effective
solutions for the integration of many partners and the flow of information between
them. Co-opetitive activities, i.e. cooperation between competitors, may also develop
in order to reduce costs and compete together for e-customers.
A number of solutions based on automation, autonomy and robotisation (drones,
robots, autonomous vehicle deliveries with parcel lockers, etc.) (McKinsey 2016) are
currently being tested which are very important in the context of the last mile chal-
lenges, but they mainly concern door-to-door deliveries. Undoubtedly, such solutions
automate the process of parcel delivery to a customer, but it is difficult to imagine
that they will be used on a massive scale. Every day, millions of parcels are deliv-
ered and all cannot be transported by drones or robots. So they are used for urgent
deliveries, in hard-to-reach places and where there is a low density of recipients. In
addition, in many countries there are legal restrictions, e.g. flight at a certain height
under human supervision (Kawa 2019a). These solutions are also widely described
in the literature, e.g. (Vakulenko et al. 2019), just as using the concept of sharing
economics, in particular crowdsourcing. The society and its resources are involved
in the delivery of consignment services (Kawa 2019a). However, these are solutions
to the problems of door-to-door deliveries, which are not covered by this article.
38 A. Kawa

9 Conclusions

The Internet has not only revolutionised trade but has also had a major impact on
logistics. It is now one of the key factors in the development of logistics companies, in
particular CEP operators. More and more people buy things online, and that translates
into the number of shipments that have to be delivered to the final recipient. The
issue of the last mile, which appears at the last stage of the logistics process, is
becoming particularly important. Most often, shipments are delivered by door-to-
door couriers. As it was shown in the article, this type of delivery is not effective.
Hence, out-of-home deliveries are very helpful.
Deliveries to PUDOs and parcel lockers are characterized by flexibility of the
delivery place and date. When e-shopping, this is undoubtedly an additional argument
for customers who are more mobile and want to be free to choose the place and time
of delivery. Unfortunately, this can be an obstacle for those who need to go a long
way to such a point, e.g. living in rural, less populated areas or not being able to
pick up the parcel. For some customers, the door-to-door courier service will still
remain most convenient and reliable. There is also a problem with larger goods such
as refrigerators, washing machines, garden equipment, and tyres. PUDOs and parcel
lockers obviously limit the weight and dimensions of a potential shipment. Large
products are still delivered directly to the indicated address.
For the purpose of this study, interviews were conducted with 592 online retailers.
The hypothesis that the out-of-home delivery has a positive impact on customer
satisfaction in e-commerce has been confirmed. The customer satisfaction has a
positive impact on loyalty in e-commerce. There is also a direct relationship between
the out-of-home delivery and loyalty. It leads to the managerial implication that
greater attention to out-of-home delivery in e-commerce resulted in greater customer
satisfaction, and, in turn, in influence on customer loyalty. Managers representing
online sellers should offer alternative forms of delivery options (not only courier
services). It leads to a greater sense of control by customers choosing the best delivery
option for them and to good experiences in the whole process of online shopping
(World Economic Forum 2020).
The presented research has both methodical and substantive limitations. The
approach developed for the needs of the paper aimed to identify universal dependen-
cies between delivery methods, customer satisfaction and loyalty. However, such an
intention may result in disregarding other aspects of the impact on customer satisfac-
tion and loyalty, such as delivery monitoring, time of delivery. Inclusion thereof may
be a future direction of research, leading to an increase in the substantive value of
the approach. The limitation of the methodological nature of this study is the essence
of the approach itself, which simplifies the economic reality and thus reduces the
complexity of the actual state.
The development of the PUDO points and parcel lockers is undoubtedly one of
the most important trends in the CEP industry. It can be assumed that their popularity
will increase with the development of e-commerce; new solutions will emerge, and
they will slowly displace courier services, which will become premium services over
Out-of-Home Delivery as a Solution of the Last Mile Problem in E-commerce 39

time. Surcharges for delivery of parcels to the customer’s door are more and more
often discussed. This trend is worth observing. Therefore, future work can embrace
a rerun of this study with the addition of new forms of out-of-home deliveries.

Acknowledgements This paper has been written with financial support of the National Centre of
Science [Narodowe Centrum Nauki]—grant number DEC-2015/19/B/HS4/02287.

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