Paz Oil Company Ltd.'s (TASE:PZOL) Yellow chain of convenience stores will try to grab a share of the growing online shopping market through a last-mile solution. The company will station electronic lockers in its filling stations available for collection 24 hours a day.
The system, called Yellow Box, is currently installed at 50 of the 276 Paz filling stations around Israel. Deployment of the electronic lockers will extend to 100 stores by the end of June, and the service is expected to expand to 200 filling stations with 10,000 lockers. Yellow has signed an initial cooperation agreement with the UPS international delivery company.
The measure , which began a year ago, involves an investment of hundreds of millions of shekels in placing the lockers, the operating system, cameras, and hiring dozens of additional employees for the customer service center. Yellow currently has 1,750 employees, not counting the filling stations. Yellow stores average 48 square meters of space, and the large stores cover 400 square meters.
Paz group CEO Yona Fogel said today, "The main need we see today is connecting the unlimited realm of online consumer possibilities to the physical infrastructure needed for making purchases. The consumers, who have a busy schedule going between work and their private lives, are no longer willing to waste their time waiting for a delivery. They need service tailored to them, not the other way around. Studies show that 25% of consumers do not shop online because of the delivery problem, and that is exactly where we come in. Our aim is a 10% share of the electronic market in Israel."
"Globes": Are you competing with the Israel Postal Company or Boxit, which already offer a similar service?
Fogel: "Competition is with the post office, although at a certain stage, I assume that the post office will want to join the service. Boxit operates at 44 points in Israel, 14 of them in our filling stations. They are not my competitors; I make money from them," Fogel answered.
Fogel added, "The market is so big that if it continues to develop, I see no problem of an excess supply of solutions. The idea is efficient management for both customers and businesses. Our operational capability is as a network with logistical deployment, including daily distribution throughout Israel. Even if the lockers remain empty, UPS is paying for the services, so I still make money."
The retailers determine the price of delivery to Paz's collection lockers, which should be less than home delivery, but more than registered mail.
"I give the logistics provider a price, and he sets the price for the consumer," explains UPS Israel VP business development Jonny Alster, "depending upon whether he chooses to make money on the delivery or to provide free delivery. The point of departure is that people are willing to pay for the product, but are highly sensitive where delivery is concerned."
The shopping operation and selecting the collection point will be easier on Israeli websites, where a map for selection will be opened. For overseas purchases, there will be an option for selecting the collection point closest to home, without the buyer having the option to select a specific filling station.
The lockers stationed in the front of the convenience stores are well-lit and covered by security cameras. The packages can be collected with a personal code sent to a mobile phone or e-mail address, and will wait 72 hours for collection. The size of the lockers is modular, and includes an option for accessible lockers. Because of the requirement for identification upon purchase, alcoholic beverages cannot be collected, so such deliveries can be collected from Yellow stores, as well as deliveries of large products, such as television screens.
Products can be returned through the lockers until the end of the year, while a solution for P2P deals in which private sellers conduct deals with private purchasers will be offered - a service that is relevant to small businesses.
Another service launched today by Paz is a venture for online orders of fruits and vegetables directly from the field in cooperation with the Moshavnik website - a venture by Avi Yaakov, a farmer from Moshav Matzliach. Through the Yellow website, a box of fruits and vegetables can be delivered to a car at any one of 100 Paz filling stations in Israel.
Published by Globes [online], Israel Business News - www.globes-online.com - on May 10, 2017
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