The Iconic and David Jones launch Saturday deliveries through Australia Post

NOVEMBER 05, 2014
news.com.au

SHOPAHOLICS rejoice. Or should that be beware?
You can now avoid the crowds, parking nightmares and giant prams plaguing you at every shopping centre on a weekend. Saturday delivery for online shopping is now a thing.
Fashion e-commerce retailer The Iconic will officially launch same-day Saturday delivery this week, starting with Sydney, following a successful six-week trial. If you put your order in before 10am on Saturday, your outfit could arrive from 1pm that same day. So that last minute party frock? All sorted for $4.95.
The Iconic is working with Australia Post’s Star Track courier division to roll it out. Australia Post has previously offered Saturday parcel delivery during the busy Christmas period, but flagged in May that it could be a permanent, year-round offer from the end of this year.
David Jones also launched Saturday delivery late last month with Australia Post as part of its relaunched integrated delivery service. However, DJs will charge you $15.
Offering Saturday parcel delivery as a product to its corporate clients is part of the company’s strategy to turn around its business model.
Australia Post has indicated it may cut snail mail delivery to every second day in response to an unsustainable slowing of traditional letters volume. In the 2014 financial year, Australia Post reported a $328.4 million loss in its letters business. Letter volume was also down by 4 per cent. The organisation has predicted its letters volume will be a quarter of peak 2008 levels by the end of the decade.
The Iconic’s managing director and co-founder Adam Jacobs said the company will again do
The Iconic’s managing director and co-founder Adam Jacobs said the company will again do same-day deliveries in the lead-up to Christmas, including Christmas Eve. Source: Supplied
But the phenomenal growth in online shopping has seen its parcel business go gangbusters. Australia Post’s parcel division reported earnings of $337.5 million, a 20.8 per cent increase on the previous year. It bought courier service Star Track in 2012, which has now been integrated into its core operations.
Australia Post general manager of business sales in the parcel division Gavin Gomes told news.com.au: “We’re under pressure in letters. [CEO] Ahmed [Fahour] has said we’re operating a two-speed business. Letters are in continued decline and parcels are in growth.”
Mr Gomes said The Iconic and David Jones are the first forayers in using Australia Post to get its deliveries to customers on a Saturday. “We’ve done research which says that customers want it,” he said. “Whether it becomes a continued service will depend on the consumer demand. There are many groups of consumers that it would be great for — professional couples, for example.”
Mr Gomes said Australia Post is in talks with several more companies about Saturday delivery with many players looking to see how the first flanks perform.
For its part, The Iconic’s managing director and co-founder, Adam Jacobs, said it was looking to see how it goes in Sydney before expanding the program nationally. If it goes well,
Melbourne will be the next market.
The Iconic’s decision to launch Saturday delivery is off the back of two things. The first is direct customer feedback. The second is data shows an increase in traffic in the second half of the week as people prepare for social engagements for the week. Since the beginning of the year, the site has seen an almost 40 per cent traffic increase on Fridays and 50 per cent on Saturdays. Average order value is also up 25 per cent on those days.
The growth in online shopping for years has seen a boon for those in the business of delivering those purchases. But the growth is slowing.
The NAB Online Retail Index has warned that while it is still growing and outpacing comparable spending in physical stores, it has been slowing gradually. For example, the latest report found online retail has grown 12.8 per cent in the year to September. Compare that to the 28.4 per cent year-on-year growth in September 2011.
Mr Gomes said Australia Post expects its parcel growth to be similar to NAB’s figures for online retail generally. But he stressed the need for continual innovation by the organisation in the face of a competitive market.
Today, Australia Post also launched Shopmate — a service which will allow Australian shoppers buy from American online retailers that don’t ship to Australia. Many services already exist in the space but Australia Post has the advantage of being a heritage brand that people trust.
In the meantime, players in the e-commerce game, including The Iconic, have their eye on the future. What the sector is looking at now is the viability of Uber-like delivery services which will see a delivery man come to you wherever you are — at a cafe or at the hairdresser, instead of delivering to a static address.