Podcast: A Greener Logistics Solution For London

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We spoke to Sebastian, CEO of Parcelly, about how their logistics solution favours efficiency and sustainability.

Chaz:    Sebastian, thank you for coming in. I love this market. I think it’s a fantastic place to be. Before we talk about Parcelly, let’s really talk about Sebastian. So, first of all, who is Sebastian and what is Parcelly?

Sebastian:    Alright. Well, thank you very much for the invitation first of all. My name is Sebastian Steinhauser, 34 years old from Germany.

Chaz:    34? You look about 25.

Sebastian:    Fantastic. I love hearing that. Thank you very much. I did some international studies. Basically, a year in the UK, a year in France, another in Germany, and I returned in 2008/2009 to London to start a career in investment banking in finance. Being pretty much taken by this financial career thing, I started to struggle with essential basics. Basically being not able, for example, to go shopping within normal business hours when shops were open, and at the same time, starting then to develop a habit to buy basically everything online. Then this entire problem emerged with how to receive those parcels you order.

Chaz:    It’s ludicrous, isn’t it? I go through the exact same thing. Unless you can order to the office, which a lot of the time you can’t and it’s inconvenient and sometimes you might not want to order some private things to the office. If you’re ordering a new set of knickers you might not want them arriving at the office. So what did you then do to address this problem?

Sebastian:    So there are two things. First of all, I used to have no problem with that. Back in Germany, not only is it completely normal to send your parcel to your neighbour or so, we had also at the time already very successful parcel lockers, so these kind of metal boxes installed everywhere in the city.

Chaz:    You Germans and your engineering.

Sebastian:    Yes. We love it. Anything we can put together with screws and bolts. So, coming over here, although I would have, in the first two or three years, a ported building, I would move west and have suddenly this daily problem. The company I was working for was in the first place allowing you to send personal parcels to the mail room but then banned it at some point. Understandably, since everybody would go nuts over Christmas and literally doing anything and sending all sorts of items of all sizes as well. We had a washing machine being announced.

Chaz:    Did you really?

Sebastian:    Yes. Not me, but we had a washing machine which was announced to be blocking the mail room, and so on and so forth. The idea was that we could literally replace, with a mobile solution, this entire problem. This was how the idea started developing. Over years, literally years and years ago, but as with many business ideas you come across, you sometimes think, ‘This seems to be too straightforward to be actually something of interest or something I would jump off my corporate career for.’

Chaz:    Before we talk about what is Parcelly and how it works, as I said to you briefly earlier, a lot of our listeners are in that process. They are in investment banking or other corporate roles or professional services, whatever it may be, they’re toying with an idea, they’re going through exactly what Sebastian went through four or five years ago. What would you say to them right now? What were your first steps?

Sebastian:    Well, that’s an interesting one. I guess everybody will find his or her own way of dealing with it. I was literally having that idea in the back of my head for years. I loved my job. I really liked the team I was working for, and everything was great. At the same time, I always had this type of entrepreneurial spirit, I think. Background-wise, both my parents run their own businesses. It was part of me at all times, and it would just come naturally that when this idea with resolving [last mile 0:04:35] would develop that this could be something I could do myself, and how I would actually do it, it was in the first place planned to be something as a side project. So where I would become the first investor and potentially the chairman over weekends but would actually fund a team who would roll it out, but I would just not find those people. I wouldn’t find those people who would share the vision and passion for it. So besides working in my corporate job I would start sourcing talent and I found a fantastic development team, two people who would become friends eventually, who would not only bring in the knowledge but most importantly the time to develop, while I was still in my corporate job, this app, and, since I don’t have a tech background, literally introduce me to this entire tech world. Then, at some stage, it was the decision whether we as a team would stop developing or I would resign and do it myself, and we would suddenly have somebody who could commercially roll it out. This was then the point when we went on our… my girlfriend at the time, today my fiancée, went with me…

Chaz:    Congratulations.  

Sebastian:    Thank you very much. We had our summer break, annual leave, and it was literally a decision taken within those two weeks that I would come back on the Monday and resign from my job. It was a fantastic moment.

Chaz:    That’s what it’s all about. So let’s talk about what is Parcelly? Talk to me about what it does, how it’s built, where people can get hold of it.

Sebastian:    Parcelly in the first place is a mobile application which allows consumers to collect their parcels, wherever they buy them and no matter who the carrier is who delivers, when and where and how they want. That was the initial idea of Parcelly. Basically, you are buying something online and not worrying anymore whether it is delivered with a specific carrier and not thinking of anymore what the delivery options and the checkout form might be. It is all preset by yourself. You take control. Ultimately control of where you want the parcel to be ending up. Parcelly has evolved now over time. We offer not only the parcel collection but much more services, such as parcel return. Very important nowadays. So you try something on and it doesn’t fit, you want to put it back into the parcel and send it back. Or, alternatively, which will come up very soon, shipping. So parcel services as such, and how it works is basically we have two angles of the product. One is the consumer application, which you can download on the App Store, which if you haven’t, all the listeners obviously please do, and check it out, and you would create an account. You would then choose your preferred Parcelly location, which would then generate your unique Parcelly address. An address which includes the address and the credentials of this location, which might be your local dry cleaner or a gym, or petrol forecourt, you name it, alongside your unique Parcelly ID. This address is now the address you would use as your own whenever you checkout on a retailer’s website. So whenever you get to this point where you need to enter your shipping address, you enter your Parcelly address.

Chaz:    So you stop getting those annoying red notes. No one likes seeing the red notes. It destroys all the excitement in receiving that Amazon parcel or whatever it is. That’s awesome. You’re exploring logistics as well. Talk to me about that. I know that you’re talking to existing logistics players in the market. Where do you see that bolting-on to your current product?

Sebastian:    Exactly. So the second arm of the solution we are offering, apart from this consumer app, is a b2b part of the business where we integrate with online retailers directly who offers Parcelly on their checkout form. So you would find us as one of the delivery options on a growing number of online retailers, directly in the checkout form. You can find those brands on our website. Alongside that, there are obviously all sorts of different stakeholders within the supply chain which can tap into what we are doing. So we have today a nationwide network of 900+ locations across the country in 40+ cities and a carrier, for example, who can’t afford running their own click and collect network, can tap into this network and use it as their own white label solution. This is how it all evolves. We have all sorts of different supply chain members who can, as well, use us for the return piece, storage and so on and so forth. This is how the partnership angle works.

Chaz:    It’s absolutely fantastic. So exciting. So you’re also looking into the key exchange service. Talk me through that. That’s super cool.

Sebastian:    The idea was born by one of our team members. We initiated a thinking process where we said, ‘Right, how could we use the existing process where we know how much storage capacity each of our locations has in real-time through this technology base we have built?’ and we engaged with everyone on the team to say, ‘How could we use this available storage capacity in different ways?’ Facilitate potentially other ways of exchanging items, and the key exchange idea was born. So we work together today with a property management company as well in this startup world here in London, and they exchange keys for their hosts with potential guests, such as the actual tenant or a maintenance or a cleaning person. All this is done through the very same process. As mentioned earlier you get, as a Parcelly user, your unique Parcelly ID, and this ID would not now be printed on a shipping label and attached to a parcel but instead, printed on a tiny label which you attach to a key. From a location perspective, it doesn’t change anything, it is still the same check-in check-out of an item, still the same that somebody comes in and goes out, and from a consumer angle, it facilitates from a host perspective everything. They suddenly have a place where they can drop-off a key early in the morning, not worrying when the tenant or cleaning or maintenance person can come over and collect it, and literally pay as they go.

Chaz:    This I like. I’m thinking about Fat Lama here because a lot of our users, obviously at the moment the way it sits, it’s up to both the lender and the borrower of items to communicate and coordinate a pick-up drop-off time where they both have to be there. Obviously, that can be pretty tricky. People living different lives, different locations, especially because more and more we’re seeing some of the niche items being exchanged. All sorts of weird and wonderful things that we won’t go into, but people come from different parts of London and so on, so very interesting. Effectively, we could have our lenders leave their items in your storage locations and the borrowers could then pick up from those locations.

Sebastian:    Absolutely, and vice versa. The borrower could drop for return something off into us to have the lender collecting it from there.

Chaz:    So from a business perspective, you were talking about this white label solution. How does that work? Is it an API that you’ve built that can just bolt-on to a platform?

Sebastian:    Totally. So different companies already bolt within the API straight into our backend. Particularly on this online retail space, we facilitate the integration through designed cartridges to all those major e-commerce platforms, and then it’s basically a process which you use as your own. Obviously, we can take care of everything which is communication, sending out the right notifications to the right stakeholders within the process, but all this can be managed on demand.

Chaz:    Fantastic. I want to move into a more holistic business view now. I know that a lot of our listeners are interested in that. So where are you at as a business both in terms of funding, scale-up? Talk me through that.

Sebastian:    We came a long way. The business was set-up in 2014, as mentioned earlier, and today we have not only the network but most importantly a team not only in London, in our headquarters, but also in Hamburg where our developers are sitting, and a tiny operation in Manchester. So literally trying now to scale nationwide, and this is from a funding perspective exactly where we are as well. We have closed our second round last year and have now institutional investors onboard who would love to see this as a European, potentially international solution. This is exactly what our vision is. Most importantly for the world of parcels, but who knows? There are so many different applications.

Chaz:    I’m thinking in my head there are so many angles that you can take this. Super cool. So who are your customers then? What is your ideal customer, from both the business perspective and a consumer then?

Sebastian:    So from a consumer perspective, signing-up for Parcelly individually directly. It’s those with busy lifestyles. Most likely within the range between 23 and 29 years old. A lot of female customers, so the overall average is rather female than male. Shopping online regularly and just being forced since they live in a non-ported building that they have an alternative delivery address whenever they buy something online.

Chaz:    From a business perspective? So your locations, what’s the average consumer look like on that side?

Sebastian:    On the business partner perspective, it is literally the entire range, from generation-wide to retired people, working from home, freelancers and all sorts of different people who not only buy online but sometimes, as being part of the key exchange product, exchanging items through the locations as such, or have a parcel which is generally just sent from one to another person. It’s literally the entire parcel world as you could think of.

Chaz:    What’s your plan for growth? What does this next two years look like for you?

Sebastian:    Obviously, as you know, from a startup angle you think in quarter, perhaps annual terms rather than one, two years, but, nevertheless, the strategy vision needs to be there and it’s in place. What we envisage is that we will cover the UK towards the end of the year with 2,000 to 2,500 sites. So being available in all major cities with a dense network such as we have established here in London already. Alongside with this obviously in smaller villages, and businesses of any sort and type can start offering the Parcelly service, but on top of that, we are already experimenting with two pilots, one in Denver US and one in Spain on the Canary Islands, in fact, to basically start offering this service in continental Europe. This is basically what we foresee. We have a number of markets now identified. We would love to expand and start to internationalise, basically, what we are doing here in the UK right now.

Chaz:    That is absolutely awesome. To round things up, for our listeners, what’s the best way for them to contact Parcelly, be that from a business perspective or from a consumer?

Sebastian:    From a consumer perspective, the easiest thing to do is to visit our website and find out more, www.parcelly.com. Or simply go to the App or Play Store and download the app and give it a try. Your first parcel or month subscription is free, so there is no harm to just give it a go, and we should find a Parcelly location in your neighbourhood. If not, you can tap a button and we set-up a location on demand. From a business partner perspective, it’s all on our website. So we have a very specific range of partnership opportunities from corporates to logistic or retail partners and they can find everything there and also the respective contact details to get in touch.

Chaz:    Fantastic. Sebastian, it has been awesome to have you on the podcast. It’s always good to have a German. I think it brings the engineering back to the UK, so thank you very much and it’s been a pleasure having you.  

Sebastian:    Thank you very much for the invitation, guys, and it has been a pleasure to be here today.

Chaz:    Thank you, Sebastian.

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