Technology Spotlight: GFS

One of our key investment themes over the past few years has been the importance of technology platforms that connect service providers and customers in fragmented markets. There’s a long list of well-known consumer-facing businesses that have successfully created digital marketplaces and new ways to do business. The model is just as relevant in the business to business world and in the latest in our Insight series, we look at how Global Freight Solutions (GFS) is helping to change the eCommerce parcel delivery market.

Phoenix invested in GFS in 2017. GFS provides fast-growing online businesses with a software platform that connects them to more than 50 parcel delivery companies, enabling them to offer multiple parcel delivery options to their customers, including same or named day delivery and locker pickup. Neil Cotty, CEO of GFS, explains how the company is helping these businesses keep up with the internet giants in this fast-changing digital landscape.

Neil Cotty says:

“How often do you try to buy something online but then abandon your purchase because the delivery options on offer don’t suit you? It happens more than you think. In fact, in the IMRG Consumer Home Delivery Review 2018/2019 which was sponsored by GFS, almost one third of the 2,000 homes surveyed stated that they had abandoned an online purchase because of delivery concerns – and 30% of those stated this was due to the lack of a convenient delivery option. At GFS, our mission is to make it easy for businesses to offer the widest choice possible of delivery options to their customers and use this as a lever to minimise cart abandonment rates on the one hand and increase acquisition and retention on the other.”

Next day delivery is now the ‘new normal’ for many shoppers, and some retailers even offer same day delivery and 1 or 2-hour delivery. Growing online businesses typically lack the technology infrastructure and operational resource to meet ever-changing customer expectations. To provide a range of delivery options to suit the differing needs of modern shoppers, online retailers usually need to work with multiple carriers. But managing all those carriers and integrating them into their eCommerce platforms and dispatch systems is a logistical, technological and commercial challenge, as is tracking all those parcels, invoicing them and dealing with any problems that arise with the delivery.

By taking advantage of new and innovative technological solutions, these smaller players are able to offer the rich variety of delivery options and convenience that online shoppers expect in order to compete with eCommerce giants. GFS not only provides a software platform that gives access to over 1,000 delivery options and plugs directly into the retailer’s website, it also takes care of all the logistics and administration involved. Apart from enabling businesses with GFS technology, the company also provides multi-carrier, managed parcel services at competitive prices due to its aggregated buying power across the industry. It levels the playing field, by harnessing the power of technology to make it possible for retailers to give their customers the convenience, choice and personalisation they are asking for.

Neil Cotty adds:

“When it comes to the mechanics of delivery, in the UK, tried and tested methods such as home delivery and left-locker services still dominate the market. In international markets, the trend towards choice and convenience is being catered for in novel and somewhat extreme ways. In Germany, for example, many consumers are prepared to provide couriers with access to their cars so parcels can be left in the boot of their vehicle while they are at work. In France, drive-thru parcel shops are popping up. These are similar to drive-thru restaurants but, instead of picking up a burger, customers collect their online shopping. We’re also seeing the introduction of other innovative delivery mechanisms. Drones, for example, have garnered many headlines. Where is all this heading? We believe the future is in personalised delivery. Each customer will have their own preference for how they receive or collect the goods they order online, and successful retailers will be those who are able to cater to their needs. Retailers will be increasingly obliged to not only make all of these options available but to anticipate them and ensure they are built into the ordering process.

It is accepted wisdom that the most successful retailers are those with a multi-channel offering. The more we can assist companies on the delivery front, so they can be more competitive and behave in the same way as some of the internet giants, the better. Those who are using GFS’s technology to innovate on their eCommerce strategy, as well as offering great products at attractive prices, will be the ones who are around for the long haul.”