PUDO System: Existing models and trends
Having a delivery point to drop off the goods purchased by the consumer can be better than home delivery
The PUDO System (Pick Up & Drop Off) was created in France in 1983 by the company Relais Colis. The goal was to create an inexpensive, alternative delivery method for customers who spend more and more time away from home. The idea was simple: to define a place for the consumer to pick up what he had bought on his own. At the time, no one thought about online trading. But when virtual sales started to increase, especially now, in the 21st century, having a delivery point to drop off the goods purchased by the consumer became, for many people, better than receiving the product at home. After all, it all depends on the routine of each one. In time: Pick Up & Drop Off, translated from English to Portuguese, means “Pick Up & Drop”. Drop! In other words, the PUDO System has also become an option for the return of goods, a process included in today’s reverse logistics.
According to liveuniversity.com, there are five versions of the PUDO System currently in use:
- “LOCKERS – You’ve probably heard of this model. Lockers – best known on the market so far – are smart cabinets that offer the possibility of removing goods at the most convenient time for the consumer. They normally operate 24 hours a day, seven days a week. The person responsible for popularizing the service was Amazon, spreading more than 2,800 units in the United States. Regarding investment, the locker requires a high investment, since it is necessary to have a network with several units spread out, in addition to the need for a well located space to keep them close to consumers.
- CLICK & COLLECT – Large retailers in Brazil, such as Magazine Luiza, C&A, Renner, Via Varejo, among others, already use this model. When making a purchase on the e-commerce of one of these brands, there is the option of directing the merchandise to one of the physical stores closest to the consumer. This is a great solution for retailers that have an online (e-commerce) and offline (physical stores) channel, as it brings an omnichannel experience to the customer, reducing shipping, delivery times and increasing sales in physical stores. On the other hand, there is a need for a high investment in physical stores for the model to work.
- PICK-UP POINT – Translating the term into Portuguese, “pick-up points” are commercial establishments, such as markets, pharmacies, malls, gyms, among other places accredited to receive and store goods purchased over the internet for up to seven days. These shops go through selection criteria, such as opening hours, appearance, location and space availability. They also receive constant training, technology and support to carry out the operation of receiving and delivering the goods. In addition to solving logistical problems, the pick-up point optimizes e-commerce branding: it offers the option of having an exclusive point with the company’s brand in strategic locations with a high flow of people.
- KIRANA – Kiranas receive goods purchased online by people close to their location. They carry out the last stage of delivery, taking the goods to the customer’s house and receiving a commission for the operation. With this option, ecommerce and carriers reduce the number of employees in their logistics areas — they outsource this last step to reduce costs and problems.
- SOCIAL PICKUP POINT – Social Pick Up Point is a variation of Pickup Point. It allows anyone to use an idle space in their home as a pickup point for goods purchased over the internet. And it still promotes extra income (at no cost)! The objective, in addition to logistical optimization, is to create relationships between residents of the same neighborhood. At the same time, it ends up influencing the reduction of violence because everyone knows each other. That’s why it brings the “social” in the name.”
Another variation is the CURBSIDE PICKUP, or curbside deliveries. Although not widespread in Brazil, this is yet another way to deliver quickly, comfortably and safely. At least in other countries.
And the System, created in the 80s of the last century, brings a series of advantages. Here are some of them, listed by the website ecommercebrasil.com.br:
- “MUCH MORE ECONOMIC – A production bottleneck for those who deliver is door-to-door demand. With PUDO, it is minimized or ceases to exist, since deliveries are now concentrated in registered commercial establishments (or strategically distributed cabinets). We don’t even need to go far to conclude that it is much cheaper for those who need to pay the delivery costs, is it?
- DELIVERY IN LESS TIME – PUDO also saves time. Instead of going through several addresses to make deliveries, you start to leave several orders at points previously chosen. This makes it easier to schedule delivery routes, which can be completed at times with less traffic. In other words: PUDO helps to deliver faster because it also helps to avoid the always inconvenient traffic jams.
- INCREASES CUSTOMER SATISFACTION – A survey by Small Business Trends reveals that 95% of people prefer one-day delivery, no matter what method they use. Therefore, the PUDO model is another way you can make your customers more satisfied, after all, what matters to them is speed in deliveries.
- REDUCED DEMAND FOR VEHICLES – Not to mention that, with shorter routes to be fulfilled, your demand for vehicles tends to drop significantly. With a smaller fleet, you save on fuel, spare parts and labor. It is worth noting that, in Brazil, the road modal is predominant, however, this is not accompanied by a quality road network. So, by joining PUDO, you also provide a solution to this logistical problem.
- DECREASES GAS EMISSIONS – Fewer vehicles in circulation also means less emission of greenhouse gases into the atmosphere. By preferring the PUDO model, you are indirectly contributing to the improvement of air quality, a problem that mainly affects large urban centers.
- HELP LOCAL COMMERCE GROW – Commercial establishments that register as collection points are remunerated for providing this service. In addition to the financial gain, the e-commerce partner merchant also gains from the increase in the flow of customers in their store. In fact, it is estimated that 30% of people who go to an establishment to pick up products end up buying something there.
- HEALTH SECURITY – As you know, among the measures to control the pandemic is social distancing. PUDO helps in this regard, as systems such as lockers prevent contact between the professional who makes the delivery and the customer.
- GREATER LOGISTICS EFFICIENCY – Logistics costs are always heavy and, if there is no strict management, they can get out of control. To avoid this, the ideal is to minimize the demand for vehicles as much as possible, either with smaller fleets or by reducing routes. The collection point system is perfect in this sense, since, as we have seen, there is a significant reduction in the mileage to be covered. As a result, your company gains more space in its operations and, as a result, becomes more efficient in its routines.
- LESS PRESSURE – In large cities, problems such as robberies, traffic jams and the difficulty in parking generate even more challenges for e-commerce. By decreasing the need to fulfill routes, PUDO helps reduce these pressures, improving your company’s overall performance.”
Of course, there are challenges when implementing the PUDO System. It is necessary, among other things, to create a process plan, acquire the appropriate tools (hardware and software), define production capacity needs, taking into account seasonality, location analysis, integration system and the establishment of standards. Hiring a consulting company may be interesting, to find out which version of PUDO is best for your company.
According to Fernando Magnoler, product & pricing manager at Total Express, “with PUDO, the end of the absent customer and the address not located can be decreed. About 12% of purchases made in Brazil are not delivered on the first attempt, which leads to:
- 50 million wasted deliveries or
- More than 80 million km driven or
- 56 million spent on gasoline at R$7 or
- 10 thousand tons of CO2 emitted.”
Magnoler also states that “PUDO is widely used in China and East Asia. In France, for example, it is cheaper to deliver this way. In Brazil, the use of the modality is timid, but it has growth potential, as there are currently 5,000 delivery points that can be explored”.
(The text above was written using information from the websites ecommercebrasil.com.br, liveuniversity.com and oihandover.com)