PUDO System: Models and Trends
With the PUDO System, having a delivery point to leave the goods purchased by the consumer can be better than home delivery
The PUDO System (Pick Up & Drop Off) was created in France, in 1983, by the company Relais Colis. The aim was to create an inexpensive and alternative method of delivery for customers who spend more and more time away from home. The idea was simple: define a place for consumers to pick up what they had bought on their own. At the time nobody thought about online commerce. But when virtual sales began to increase, especially now, in the 21st century, having a delivery point to leave the goods purchased by the consumer became, for many people, better than receiving the product at home. After all, it all depends on each one’s routine. In time: Pick Up & Drop Off, translated from English to Portuguese, means “Catch and Drop”. Drop! In other words, the PUDO System has also become an option for returning goods, a process included in today’s reverse logistics.
According to the Liveuniversity website, there are five versions of the PUDO System currently being used:
- “ LOCKERS — You’ve probably heard of this model. Lockers — the best known on the market so far — are smart cabinets that offer the possibility of picking up goods at the most convenient time for the consumer. They are usually open 24 hours a day, seven days a week. Responsible for popularizing the service was Amazon, spreading more than 2,800 units in the United States. Regarding the investment, the locker requires a high investment, since it is necessary to have a network with several scattered units, in addition to the need for a well-located space to leave them close to consumers.
- CLICK & COLLECT — Major retailers in Brazil, such as Magazine Luiza, C&A, Renner, Via Varejo, among others, already use this model. When making the purchase on the e-commerce of one of these brands, there is the option of directing the merchandise to one of the physical stores closest to the consumer. This is a great solution for retailers that have an online (e-commerce) and offline (physical stores) channel, as it brings an omnichannel experience to the customer, reducing shipping, delivery time and increasing sales in physical stores. On the other hand, there is a need for a high investment in physical stores for the model to work.
- PICK-UP POINT — Translating the term into Portuguese, “pick-up points” are commercial establishments, such as markets, pharmacies, malls, gyms, among other accredited places, to receive and store goods purchased over the internet for up to seven days. These businesses go through selection criteria, such as opening hours, appearance, location and space availability. They also receive constant training, technology and support to carry out the operation of receiving and delivering the goods. In addition to solving logistical problems, the pick-up point optimizes e-commerce branding: it offers the option of having an exclusive point with the company’s brand in strategic locations with a high flow of people.
- KIRANA — Kiranas receive goods purchased online by people near their location. They perform the last stage of delivery, taking the goods to the customer’s home and receiving a commission for the operation. With this option, e-commerces and carriers reduce the number of employees in their logistics areas — they outsource this last step to reduce costs and problems.
- SOCIAL PICK UP POINT — Social Pick Up Point is a variation of Pick Up Point. It allows anyone to use an idle space in their home as a pick-up point for goods purchased over the internet. And still promotes an extra income (at no cost)! The objective, in addition to logistical optimization, is to create relationships between residents of the same neighborhood. At the same time, it ends up influencing the reduction of violence because everyone knows each other. That’s why it has the “social” in the name.”
Another variation is CURBSIDE PICKUP , or curbside deliveries. Although not widespread in Brazil, this is yet another way to deliver quickly, conveniently and safely. At least in other countries.
And the System, created in the 80s of the last century, brings a series of advantages. See now some of them, listed by the site Ecommercebrasil:
- “ MUCH MORE ECONOMIC — A production bottleneck for deliveries is door-to-door demand. With PUDO, it is minimized or ceases to exist, since deliveries are now concentrated in registered commercial establishments (or strategically distributed cabinets). We don’t even have to go very far to conclude that it’s much more affordable for those who have to bear the delivery costs, right?
- DELIVERIES IN LESS TIME — PUDO also saves time. Instead of going through several addresses to make deliveries, you can leave several orders at previously chosen points. This makes it easier to schedule delivery routes, which can be completed at times with less traffic. In other words: PUDO helps to deliver faster because it also helps to avoid the always inconvenient traffic jams.
- INCREASE CUSTOMER SATISFACTION — Research by Small Business Trends reveals that 95% of people prefer one-day delivery, no matter what delivery method is used. Therefore, the PUDO model is yet another way for you to make your customers more satisfied, after all, what matters to them is the speed of delivery.
- REDUCED DEMAND FOR VEHICLES — Not to mention that, with shorter journeys to complete, your demand for vehicles tends to drop significantly. With a smaller fleet, you save on fuel, spare parts and labor costs. It is worth mentioning that, in Brazil, road transport is predominant, however, this is not accompanied by a quality road network. So, by joining PUDO, you also provide a solution to this logistical problem.
- DECREASES GAS EMISSIONS — Fewer vehicles in circulation also means less emission of greenhouse gases into the atmosphere. By choosing the PUDO model, you are indirectly contributing to improving air quality, a problem that mainly affects large urban centers.
- HELP LOCAL TRADE GROW — Commercial establishments that register as collection points are remunerated for providing this service. In addition to the financial gain, the e-commerce partner merchant also gains from the increased flow of customers in his store. In fact, it is estimated that 30% of people who go to an establishment to look for products end up buying something there.
- HEALTH SAFETY — As you know, among the measures to control the pandemic is social distancing. PUDO helps in this regard, as systems such as lockers prevent contact between the delivery professional and the customer.
- GREATER LOGISTICS EFFICIENCY — Logistics costs are always heavy and, if not rigorously managed, can get out of control. To avoid this, the ideal is to minimize the demand for vehicles as much as possible, either with smaller fleets or by reducing routes. The system of collection points is perfect in this regard, since, as we have seen, there is a significant reduction in the mileage to be covered. As a result, your company gains more space in its operations and, therefore, becomes more efficient in its routines.
- LESS PRESSURE — In large cities, problems such as robberies, traffic jams and the difficulty of parking create even more challenges for e-commerce. By reducing the need to fulfill routes, PUDO helps to reduce these pressures, improving the performance of your company as a whole.”
Of course, there are challenges when implementing the PUDO System. It is necessary, among other things, to create a planning of processes, to acquire the appropriate tools (hardware and software), to define the needs of productive capacity, considering the seasonality, the analysis of the location, the integration system and the establishment of standards. Hiring a consulting company might be interesting to find out which version of PUDO is best for your company.
According to Fernando Magnoler, product & pricing manager at Total Express, “with PUDO, the end of the absent customer and the address not located can be decreed. Around 12% of purchases made in Brazil are not delivered on the first attempt, which leads to:
- 50 million wasted deliveries or;
- More than 80 million km driven or;
- 56 million spent on gasoline at R$7 or;
- 10 thousand tons of CO2 emitted.”
Magnoler also states that “PUDO is widely used in China and East Asia. In France, for example, it is cheaper to deliver this way. In Brazil, the use of the modality is timid, but it has potential for growth, as there are currently 5 thousand delivery points that can be explored ”.
( The text above was written using information from the websites ecommercebrasil.com.br, liveuniversity.com and oihandover.com)