Is it Possible (and, if so, why hasn't it been done already?)

Unlike the massively ambitious and scientifically challenging alternative energy and carbon sequestration projects our governments are funding to the tune of billions of pounds, this scheme doesn’t require any new science – just a lot of engineering and some money. Well, quite a lot of money actually. A lot more than the average start-up has the luxury of risking but at least an order of magnitude less than either of the aforementioned initiatives. All of the components and skills needed to deliver the vision set out above are readily available today.
We simply need to pull together the best of existing:

Technology is constantly improving and it is always tempting to wait for the next generation of products and tools but, to paraphrase the Bard: there is a tide in the affairs of technology,

“Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows, and in miseries.
On such a full sea are we now afloat;
And we must take the current when it serves,
Or lose our ventures.” Shakespeare: Julius Caesar Act 4, Scene 3

Given that it will take several years to roll out the service in volume, we ought to be developing it now, even though some aspects of it may be only marginally economically attractive today. By the time the system is in place, Moore’s law will have worked its magic some more.

Why hasn’t it Been Done Already?

There have been many attempts to deliver parts of what is proposed here (Ref 8). Many of these have foundered because they are too timid in scope and hence did not offer enough value to win much business. But even had they tried to be bolder, they would have been constrained by short-term payback and/or limited funding requirements.

It's not really new

Milkmen have been offering to deliver basic groceries on and off for as long as I can remember (without much take-up as far as I can tell) but taking a look at the landscape we see a host of initiatives, many of which have already gone bust and the remainder are not exactly setting the world on fire.

A combination of house to house deliveries used to exist in a smaller scale, although in an un-coordinated and disconnected way in many local communities. As well as regular deliveries of bread, fish, vegetables, soft drinks and coal I have been told that my grandparents had buttermilk and eggs delivered to their door – as well as three grades of milk, by their milkman each morning.

Taking a trip down memory lane, I recall that in the nineteen seventies our bread, cake and pastries were delivered by a purple van-man who also carried a variety of other useful household items including children’s comics. My brother and I looked forward at Christmas to having the Beano and Dandy annuals brought to our front door - postage free.

At this time too, farmers throughout rural County Londonderry welcomed the city butcher’s delivery vans not just for the sausages, mince and meat that they carried but to learn the latest prices of cattle and sheep at the local livestock markets they passed through. Much of this was private enterprise on the part of the drivers of course and it was all before today’s instant communication. Not everyone had a telephone then and mobile phones and the internet were unheard of.

More formally organised in many European countries, including the United Kingdom, are postbuses that combine the functions of public transport and mail delivery/collection. Mostly started by the national post delivery services, some were privatised or operated by local councils.

Stimulated by rapidly declining local rail and bus services in rural areas and to provide a community service, Royal Mail introduced postbus services in the United Kingdom in 1967. Unsurprisingly more remote areas are better served than more populated regions and although a number of unprofitable services to the Scottish highlands and islands were discontinued in 2009 some fifty thousand passengers are carried each year.

Unattended Delivery Boxes

The Hippo Box (from Giraffe Marketing) and ParcelEater are simple, mechanical containers into which delivery companies can safely place items until the recipient returns and collects them. The Hippo Box is a simple metal container with a door that is left open until the parcel is placed in it and then locks till you open it with the key.
The Parceleater overcomes this and allows multiple couriers to access the box on the same day but the interlocking bin mechanism reduces the size and number of parcels that can be stored in a given box volume.
These very simple boxes retail at £120 (ParcelEater) and £215 (Hippo-box). Homeport locked boxes to a stake in your garden back in 2001 but have since gone under.

Field Service Deliveries

As with many markets, we can find examples of the same techniques being applied initially to niches that can afford the higher costs. The number of customers is lower and the prices higher but these users can justify the expense. A good example of this is with Field service engineers who need to be supplied with spare parts every day. These people are being catered for by companies such as:

Neither of these scales very well into the consumer market as the number of collection points would have to rise dramatically from the few hundred needed by their current customer base.

Consumer Collection Points

In Spring 2006, a new wave of Business to Consumer (B2C) plays were being heralded as “phase two of the home delivery revolution”.  Most of these appear to be providing alternative collection points where you go to pick up your parcels as an alternative to having them delivered to your home. These ones are still in business but don’t appear to be setting the world on fire.

 I tried to find my nearest Kiala collection point but was advised that Kiala is not operating in my area. This highlights one of the problems of this business model which is the need to rapidly obtain coverage across a wide area. Until you do that, your market and advertising opportunities are limited to the regions you do cover.

CollectPoint was a similar venture, now defunct. These start-ups have been fairly convincingly trampled by the gorilla in the UK market. Royal Mail introduced their Local CollectTM service which uses the entire network of Post Offices as collection points. Good luck to anyone trying to compete with this – though at the rate Post Offices are closing that may get easier!

In smaller communities, it is much easier to reach the hygiene level of coverage throughout your market. This is evidenced by ByBox’s consumer business on Jersey – which can be served by a small number of locations. It was being noted in 2006 that the thorny question of standards to allow different companies to access a single type of box would probably have to be tackled if the concept is to become mainstream.

Secure Access to the Home

If you can’t be at home to take a delivery, maybe you’d be happy to let the delivery driver in. Home Delivery Access attempted to offer this in the early 2000s but failed to achieve critical mass. Ahome4It is another approach to making the keys available to delivery personnel but it requires a certain degree of trust that may be lacking in many areas these days.

Generic Home Delivery

Where the previous ventures each tackled only a single aspect of the Localnet as proposed, there is one that stands out as having tried to bring several of the services together. Even this one only tried to tackle perhaps a fifth of the scope of the service set out here.
This was Streamline.com in the U.S. (Ref 9) who started in 1996. (This company is not to be confused with the credit payment company now using this brand name and website.)
Streamline delivered groceries to boxes in your garage and let you order a range of other items, from dry cleaning to prepared meals but only did so weekly.  There was a monthly service charge of $30 and a promise to save you three to five hours a week.
However, without encompassing the travel, postal and refuse aspects of the Localnet as proposed here the value proposition was far lower than Localnet can offer. This company had serious backing in the form of Intel, SAP and GE Capital but, unfortunately, following the Shakespearean metaphor, the tide had barely started to come in as they kicked off.
They were probably fifteen years too early.  Their business plan was ambitious for a start-up (aiming for $5 billion turnover by 2004) but even with this sort of backing, they could not reach critical mass before the money ran out. The company closed down in 2001.

How to Succeed where Others have Failed

I contend that the only way this is going to work is if we take a big-step as the baby-steps between here and the Localnet are too expensive to take in isolation and do not start to deliver real value until many of them have been taken. The mountain is too tall and steep to climb without aids. We need a metaphorical helicopter to take us to the top. Unlike carbon sequestration, and replacing fossil fuels however, we’re not trying to get to the next solar system – just the top of a mildly challenging mountain whose peak we can see pretty clearly. The view from the top will certainly be worth the climb!

Scope

I’ve failed to find anyone trying to combine delivery, collection and transport in the way I propose here. Within delivery, only Streamline came close to the vision – and they were far too early into the market. The other products and services discussed above are point solutions aimed at a single type of problem for which they provide a single approach. Hence they work well only for a subset of the people and a subset of the deliveries.

The ones that appear to have a sustainable, though not terribly exciting revenue are the “electronic box” providers. This is somewhat of a misnomer as the box is usually made of steel and it’s only the lock that has any electronics in it.  These are touted as a solution to “unattended delivery” but really only work for occasional deliveries. No-one wants to have to come home via another location, wrestle with more traffic, try to park and potentially stand in line to pick something up more than once in a while. The very people who hate this waste of time most are, unfortunately for these businesses, the ones who have most “stuff” delivered to their homes. They do this precisely because they don’t have the time to go out shopping or even to collect things. The pathological example of this is that your home delivery grocery order could be diverted to a storage box provider – sited back at the supermarket the groceries just left – for you to collect later.

Another issue with “occasional deliveries” is that they’re very often the large, fragile and/or perishable items that aren’t going to fit or survive well in a small metal box outside your local supermarket or wherever.

The other problem with occasional deliveries is that they’re occasional. The volume of deliveries isn’t there to let the business grow hugely. Even if there was, the space for the boxes and the additional parking needed in supermarket foyers or petrol forecourts is limited. The solution becomes less and less attractive the more you use it.  The business model has an inherent glass ceiling it cannot break through.
Others argue (Ref 8) that rather than having the deliveries taken somewhere else where you can burn some of your precious time collecting them, the real answer is for home deliveries to be better scheduled. This is somewhat of a pipe dream in congested cities where getting anywhere on time requires so much contingency as to ruin your efficiency. Even where schedules can be met, the same glass ceiling applies. The more things and the more you try to deliver, the greater the need for daily deliveries yet the more likely you are to be delayed. It’s much harder to still be on schedule at the hundredth property than it was at the first.

Timing

It is indisputable that the march of technology invariably makes it easier and cheaper to deliver these complex solutions as time goes on. That’s why we all consider putting off buying the latest TV or mobile phone for another month. There’s always a better, cheaper, more powerful model “coming soon”. With offerings like Localnet, there’s a “double whammy” to be had from waiting. It’s not just the rise in what you can do for your pound or dollar that is important here, it’s also the spread of the technology into your target market. The more houses that have broadband internet and Wi-Fi, the more retailers that have a significant online element to their business the easier and more profitable it is to build additional services on top of that installed base of technology and familiarity.
Waiting before starting is therefore probably the best thing you can do to improve your chances of success with a plan that requires large doses of technology. Unfortunately, however, the danger of someone else doing it before you grows the longer you wait. You are also pushing back the day you might see profits – although maybe only by one year for every three years that you keep your powder dry. Localnet was conceived in 1998 so has sat “ripening” in the cellars here for eleven years now. I believe the technology is there now for pilot deployments and the challenging or expensive pieces should be mainstream and much cheaper just about the time we need to use a lot of them to roll the system out in volume. It’s now time to blow the dust off the bottle and see if 1998 was a good vintage.

Challenges