Critical Mass

To get off the ground at all, localnet needs to be (effectively) the sole distribution mechanism within its catchment area of at least a few thousand properties. Further benefits start to accumulate when it starts to serve a significant proportion of the customer base for certain products.

Localnet must dominate deliveries within each catchment area

Localnet cannot work unless all - or at least almost all - deliveries in a neighbourhood are made via the localnet infrastructure and fleet. This means not only that competing delivery firms must be barred from operating in the catchment area but also that the vast majority of properties in the area make use of the service. Using the good old Pareto rule, we really need to take on 90% of delivery types to at least 90% of the properties in a catchment area. This gives localnet 80% (81 for pedants) of the deliveries in the area. If the rule works properly, we should find that we only need to cover 20% of the miles to deliver this lot (though that may be stretching the rule a little further than can be justified).

At present, this requirement can only be met on a green-field site under strict control. A large-scale development such as an Eco-town or the cities being constructed in China and Korea are obvious places where this could be made to happen.

Further benefits as localnet becomes a “significant” distribution channel

Further benefits kick in once a significant proportion of deliveries of a product are made via localnet. At this point, businesses will start to tailor their product to exploit the distribution mechanism. Bottles that were just too tall for the  OmniBox will become shorter and squatter so they fit standing upright for example, Products will be designed from the ground up with localnet standards in mind.

More products may dispense with outer packaging altogether. Bulk solids and liquids may be repackaged in bulk containers from which individual localnet SolidsBoxes or LiquidsBoxes can be filled automatically.

Some larger products that do not currently fit inside either standard box may be redesigned to incorporate the fixings of a localnet box within them so that they can be easily transported and shipped via localnet. This could give them a shipping cost advantage over their competitors.