David McLean: If you look at parts of Europe, about 40% of all parcels are picked up outside of home and so we know the trajectory for out of home pickup is going to grow in Australia in line with everybody else. If you ever see me on one of those Shark Tank style spins, talking as if I know everything, you have every right to punch me in the face because it's just not true. With some of the technology that we're putting in place now, we can actually potentially provide upsells on that existing e commerce order when they've gone into that store.
[Voiceover]: Welcome to Add to Cart, Australia's leading e commerce podcast that express delivers all you need to know in the fast moving world of online retail. Every week Nathan Bush from E Suite and an e commerce industry expert will share the news, research and insights that you need to know to keep you at the top of your game and of course keep your customers adding to cartoon.
Nathan Bush: Hello and welcome to Add to Cart. My name is Nathan Bush, host of Add to Cart and Director at E Commerce Talent Agency E Suite. Now, have you ever wished that your local post office was at the end of your street and always open all of the time? Picking up puzzles would be such a dream and you wouldn't even curse those we missed you cards from the postie quite so much. Unfortunately, they still exist. David McLean is today's guest and he's found a way to make those cards disappear. David is the founder and the CEO of Hubbed H U Double B E D a technology solution giving e commerce businesses and their customers an alternative way to receive products. With Hubbed, customers can opt to pick up their package from the local corner shop, news agent or petrol station at a time that suits them. Hubbed partners with major couriers, has about 2200 pickup locations Australia wide and will turn on four further markets in Southeast Asia later this year. In this chat, David shares the benefits this solution can bring for retailers who actually become the Hubs. He talks about the sustainability impact that Hubbed is making and why he's asking for a punch in the face from me. Plus, I throw in my two cents on an idea for the future of Hub's pickup locations and I'll give you a clue.
Nathan Bush: It involves a cold one, naturally.
Nathan Bush: So thanks to our partners Shopify plus and Paclio, here's our conversation with David McLean, founder and CEO of Hubbed.
Nathan Bush: David, thank you for joining us on Add to Cart.
David McLean: Very happy to be here.
Nathan Bush: Now you've seen me in my very unnatural state. I rushed into this podcast recording in a suit and tie which rarely ever happens. And I had to literally undress in front of you. So I'm sorry about that, that it's an awkward way to start.
David McLean: I was very happy with the experience. Nathan. Nothing to complain about from my end.
Nathan Bush: I'm just glad it's an audio podcast. So, David, we are here to talk about Hubbed. Can you tell us the problem that Hubbed is solving, please?
David McLean: I always like to put it this way. If you go into the average shopping cart today to buy something and you get to the checkout, there are always about eight ways to pay now, but maybe two ways to deliver fast and slow. And so we kind of think that one of the things that needs to happen is customers should have more delivery choices. And that's what Hub is about. It's creating a network that enables more delivery choices for first mile and last mile parcels.
Nathan Bush: Great. So that's a lot there. What kind of choices are we talking?
David McLean: Well, at the moment it's economy and you might wait seven days, eight days or whatever, depending on, you know, your carrier or express, which is pretty expensive. And the research has shown that a lot of people actually pay more for an express delivery or same day delivery just because they want a level of surety that the parcel is going to arrive on time. Well, we've got 2,200 locations around Australia alone that allows carriers to drop parcels off in bulk. So what that means is they can actually deliver more, which improves the efficiency of the delivery and therefore improves the efficiency of customers getting their parcels. So if they're happy to pick it up on the way to work or the way from work, for example, they're more likely to get those parcels on time. There may be a cost benefit for them as well. They can pick up 24 hours, seven days a week based on our network. So they're not reliant on that horrible misdelivery card telling them they have to get to the post office by 4 o' clock or they're done.
Nathan Bush: The worst card ever. No one wants that card.
David McLean: Yeah, exactly. So they can pick up on a Saturday, they can pick up on a Sunday, they can pick up at midnight if they want, depending on the location. So that's what we consider real choice, convenience and control for the customer.
Speaker E: Great.
Nathan Bush: So you don't do the courier side of it at all. You don't do any. You organize the network of convenient locations for couriers and delivery companies to drop parcels off at.
David McLean: That's exactly right. We map out the network around the country where people live. We tend to Want to have a location within a kilometer of most people's homes and most people pick up within a standard trip on the way to work, from work to the shops or whatever, so it's convenient for them. And then we make sure that we've connected with all of the carriers so they can use the network and we arm them with a bunch of technology for notifications and that sort of thing.
Nathan Bush: Awesome. And can you share some of your most prominent partners in terms of those locations?
David McLean: Yeah. So we work with National Storage, BP Petrol stations, we work with Pack and Send and we also work with a lot of sort of independent news agencies and retailers. We do a lot with BP, I think I've now mentioned and 7 11. So we've worked with a lot of pretty good sort of standardized retail networks so we can really drive compliance through them. But also some really good independent retailers who love having new customers come in really appreciate the foot traffic and it's a way of bringing that E comm business back to their stores in a way and make it localized. I wax lyrical about this, but I say, you know, in years gone by, you know, the news agency was a place where the community congregated to get their news. And those days have changed. You know, E commerce have changed and digitalization of information has changed that. Well, why don't we bring those people back to the community by they being the locations where you come and collect your E comm stuff, you're looking after that small business, you're supporting them even whilst you're going online. So we feel pretty good about the work we do there.
Speaker E: Stationary brand Milligram are the prodigal sons of Shopify. Starting life 10 years ago as a Shopify store before packing their bags for an adventure with another platform. Milligram are back over to Shopify Plus. Milligram now have over 100 employees and four physical stores. So they needed a platform that had integrated content and commerce, reduced technical debt, the ability to have promos live immediately and most of all be reliable in peak season. As an added bonus, they were able to optimize their search bar conversion rate from 4% to almost 8% with Shopify Plus. Now that's something to write home to mum about. To read more of Milligram's story and to see other case studies, visit the customer section on shopify.com/plus.
Nathan Bush: So is there any commercial benefit for your outlets apart from we'll just drive foot traffic in for you?
David McLean: I'm a firm believer in the fact that they are providing a service so they get a commission for every single parcel that they look after. I mean, if you think about it, they're little warehouses, you know, they hold these parcels for typically up to five days for us. They keep them secure, they make sure that they're available to the customer at their convenience. And quite frankly, people should pay for that service just like they do with anything else.
Nathan Bush: Yeah, no, I love that term mini warehouses because it's so true. I walked in, I once ordered a Kogan TV and I wasn't home and it got left at my local news agent and the poor people had this like 60 inch TV just behind where they were trying to pull lottery tickets out. And I'm like, oh, I'm so sorry. I tried to get here as quickly as I could.
David McLean: Yeah, I could tell you I know the carrier that did that. So you give them a call and
Nathan Bush: tell me from a customer's perspective. So I'm going through my favorite website, get to check out, I'm checking out and I get to the delivery options. How does it integrate then with the hub service?
David McLean: Yeah, so if you look at ebay, for example, we provide this service with them. So you. Exactly right. You get to the checkout and then you're picking the delivery choice. And one of those services will be click and collect. You click onto that, you put your postcode in or your suburb and a list of the hub locations within a sort of geo fenced area around where you want those items deliver up here you pick one of those and that in effect changes the delivery location from say your home to that location. Then what happens is once that parcel is received into the location, a notification is sent to you by SMS and email. Your parcel is ready for pickup. Here's where it is, the place that you selected. Here are the opening hours and here's actually a Google map to actually tell you exactly how to get there from where you are right now. And then you go in at your convenience, show the guy behind that person behind the counter your id. Typically, you know, just Australian id. You give them your unique PIN number which only you have, which we've sent you via text. They check that into the system and the system says release the parcel and then they give you a parcel. Job done. Takes about 30 seconds.
Nathan Bush: Amazing. And I can bet that there's a bit of customer surprise when they get to the likes of ebay and the checkout and they go, there's a click and collect option. Like I thought you were purely online.
David McLean: Yeah, that's a big one. Nathan. We've been pushing this line now where when people think about click and collect, they think, I've gone to Rebel Sport online and I'm going to pick up from Rebel Sport in store. So we've really turned it sort of click and pick, pick your products online, pick your location, pick your time, and then it's up to you. And then what that does is it gives the pure place the opportunity to have an omnichannel experience, as it were, because they can now pick up from all of these locations around the place. So it really helps an online retailer who's trying to compete with an Omni Channel retailer that has locations. And then the argument we have is that, look, I'm sure that retailer has some great locations, but are they truly convenient for you if you live in Des Moines, where I live in, in Sydney, I've got the local petrol station and I've also got the local newsagent that I can select. Both of those are on the way home. One's on the way home from work and one's on the way to work. So that may be more convenient for me than the post office and the set times around that. So it really is about giving these pure plays the opportunity to add another option around delivery. That's an advantage to them and their customers.
Nathan Bush: I love that convenience play too, because you think about the post office, they're open, what, 9 o' clock till 10:30 every second day on the third Monday of each week. Having something like a service station that's open almost 24, 7 is an amazing option.
David McLean: Yeah. And with respect, I'd say a lot of these retailers, they're really happy to see people. These are customers that typically wouldn't go in. If you look at a newsagent, the average age of a news agent customer is about 57. So to get all of these different types of people coming into those stores, what I actually say to a lot of these retail partners is start to think about the services and the products and the offers that you can actually entice into those customers. Doesn't have to be a lot of ticket, necessarily. What else could you provide? And with some of the technology that we're putting in place now, we can actually potentially provide upsells on that existing E Commerce order when they've gone into that store. So there's a lot of things that we're looking to do in the coming months in that area. But for these retailers, it's like, look, I'm basically paying you to have a customer come in and you have an opportunity to sell Something new to them. So go back to being a salesperson versus just the service orientated retailer.
Nathan Bush: Do you see the way that we use those stores at the moment? So, you know, petrol stations, news agents that have changed a lot over the years. I remember BCF did like a in store little mini shop within these service stations. Do you see them fundamentally changing a lot in the next coming years?
David McLean: Yeah, look, they're really thinking about innovation and what the digital economy is doing to them and other things. I mean, let's be fair, you know, petrol stations, thinking about vehicles and what that might mean for them and what they are as a retailer. And so I think they're looking to provide additional services to these habitual customers that they're seeing every week. How do they remain relevant to them? Well, the reality is relevance to everybody now has something to do with online. So how do they bring that together maybe with some other life services and life services that they can provide to these customers? And E commerce is just sort of a slam dunk solution. Everybody's online, they're coming into your stores. Until we've all got Star Trek teleporters and nobody has to move and their products going to turn up in their home, they need to pick those parcels up or get them delivered. So how can they play a part in that? And I think that's the kind of thing that they're all looking at right now and seeing how they add some more value there.
Nathan Bush: Amazing. And from a retailer's perspective, to be able to add Hubbed as one of the options, whether they currently do it direct through couriers or or use a shipping solution, what's the best way to integrate?
David McLean: Well, if you are on one of these standard platforms, you know, Shopify, WooCommerce, Magento, BigCommerce, all of them, you literally just go to your marketplace and download the Hub plugin or install the Hub plugin into your website and then immediately from there you've now got click and collect in your website. So there's nothing more for you to do. If you got to customize site, you know, contact us and we've got standard API integrations that we can use to connect you in and then you customize that. Do you want all of our locations available? Do you want certain locations available? Have you got a preference for particular opening hours or those sorts of things? My view is leave them all up and let the customer decide. But you know, everybody can customize as much as they want, so it's pretty easy to connect Hubda and to have that as Another delivery choice in your cart.
Nathan Bush: That's cool. And from a commercial perspective, do retailers pay per delivery?
David McLean: There's actually three answers to that. Sometimes the retailer might pay the service fee for processing those parcels and storing them. Sometimes they pass it on to the consumer and the consumer pays just for the added choice or value. But more often than not, my belief is that the payment should be absorbed by the carrier. And the reason for that is just think about the math of it. The average courier can do 120 to 130 deliveries a day. Well, if they can drop off 10 or 20 parcels to one location, they've just increased their capacity to deliver. And the value proposition of dropping those 20 parcels off versus an individual delivery, there is some cost benefit in there and I think that that should be passed on. It's not a popular thing for me to say, but that's what I think.
Nathan Bush: And are you able to. This might be a sensitive question, but are you able to give us a range of what you would expect to pass onto that convenience outlet as an additional cost?
David McLean: We charge around $2 for the management of a parcel. That's our standard rate. Sometimes a little bit more, sometimes based on volume, a little bit less. So I would expect as a minimum that that could be passed on, quite frankly, especially if you absorb it across the total volume of parcels that you've got moving through your networks.
Nathan Bush: Especially if you've got high value goods, which I expect that you would have a lot of people wanting their parcels going there if they're high value. Right.
David McLean: I have this ongoing piece of banter with people who say to me, oh, it's expensive, you know, $2 a parcel. And I say, when's the last time you walked up the street? Remember when we used to use money and you go into, you walk past a Commbang ATM and it would charge you $1.50 to take out 50 bucks. And you could walk 10 meters up the road to the St. George, but you couldn't be bothered. So let's talk about. At the end of the day, it's a convenient price point and if it's convenient to you to have that, you place an order for a dress on a Thursday night because you want to wear it on Saturday and for some reason you're just not sure if you're going to be home or you're concerned that it might get delayed, but it could be delivered on Saturday morning to the BP and you're not worried about it. It's going to cost you two bucks for that convenience. I Don't really think it's a big ask.
Nathan Bush: I love that ATM comparison. That's so good. Have you noticed that the use cases for IT have changed a lot? Obviously pre Covid, we had that big rush of people having everything delivered into offices and, you know, office admin assistants and stuff, getting overwhelmed by the volume of parcels coming in. And now we've moved a lot to in home. Have you noticed that that's changed how people use hubbed?
David McLean: Well, pre Covid, you started to see a bit of change in offices around what they would allow people to do in terms of shipping to the office. And there started to be some restrictions on that and some major sort of corporates made some decisions around that and there were also some oh and S issues there within the mail rooms and the capacity for that stuff. So there was some change happening there and we were seeing more parcels coming to our network. When Covid hit, everything sort of ground to a halt, to be honest, because everyone was at home. So why are you going to a collection point? You're at home. There were no more missed deliveries. Everything was was able to be delivered. In fact, if anybody was putting parcels into our network, it was the carriers because they just had so much capacity and they couldn't manage all the deliveries, so they put them into the network in some instances. So Covid was a horrible hub. What happened since COVID was that we've now got some people staying at home more than they did before and people going back into the office. So our volumes went back up again and then they started to grow in line with the growth that there was with Ecom. But some people are now, am I going to be home? Am I going to be at work? Not really sure do I want it to be? Am I happy for it to be left outside? No, definitely not. You know what? I'm going to do that. I'm just going to make sure that it's redirected to my hub location, so I'm not worried about it. And so we've seen an increase in our volume on the back of that.
Nathan Bush: So it's more of a peace of mind offering for them.
David McLean: Yeah, I think so.
Nathan Bush: I can imagine too, in what you were saying there around being able to siphon a whole bunch of deliveries into one central community pool, that there's a sustainability or environmental impact there as well.
David McLean: We did some work with the Carbon Reduction Institute of Australia and they did a case study on Hub. It's still on their website, actually, and it talks to the fact that if parcels are dropped into the hub network. It reduces carbon and carbon equivalent emissions by almost 50% on home delivery. So we definitely are. Even though we already offer carbon offsets on our parcels anyway, we're actually generally reducing emissions and congestion. And it just makes sense if you've got a driver who can drop off 20 or 30 parcels rather than doing 20 or 30 individual deliveries, and those customers are not creating a new drive to collect those parcels, they're doing it in an existing drive to work from work or commute, then you are generally reducing emissions. And we know that retailers are quite passionate about that and in actual fact the carriers are starting to be quite passionate about that. But it also works for them because it's driving efficiency and increasing capacity. But at the end of the day, our vision has always been to transform the sustainability of the last mile. And to do that, you know, we want to put as many parcels for our networks because we know that reduces congestion and emissions. So all of those things work together. And we're quite proud of the fact that we know that every time we manage a parcel we're reducing CO2.
Nathan Bush: Amazing. And I bet you've probably had a lot of carriers come to you looking to potentially acquire or partner you to fix up that last mile. Have you having many of those discussions?
David McLean: Yeah, look, we work with every major carrier in Australia except one. Well, mentioned them, but we work with everybody else and we are an agnostic network and so that means to us, we don't care who you are, you know, come one, come all. We make it very easy for our carriers to integrate with us now. And we work at everybody, you know, Toll, Korus, Police, SENDAL, DHL, UPS, FedEx, everybody works with us in some of the key marketplaces like ebay. So I think we are a value added partner to them because we are helping solve that last mile problem.
Nathan Bush: On a retail side, do any retailers come to mind that you're working with? You've already mentioned ebay, but that have really been able to articulate and sell the hubbed offering as a benefit to
David McLean: their customers, a few of them, and to a large extent through the carriers, because some of the relationships for us have, have come via the carriers. So we manage consignments for the likes of the iconic Jaggy, hi Fi, Maya, Kmart, everybody. So we have them through as to whether they do a great job on the messaging. I think everybody could do better. I think you can hear I'm quite passionate about it and I'm happy to assist in that a little bit more. So I do See that as an opportunity for people to do a great job. I've worked for a long time with a lady by Victoria Edgeman who runs a consultancy called Relievables and she is very focused on sustainability and E commerce and she does not like greenwashing and she does not like E commerce retailers talking about things that they don't truly support. And I sort of drunk that Kool Aid quite deeply. And so I'm quite persistent on retailers who talk about sustainability but aren't necessarily walking the walk of sustainability.
Nathan Bush: I'd say that's a pretty healthy Kool Aid to drink.
David McLean: Yeah, I think so.
Nathan Bush: And you mentioned the research that you did around sustainability and there were some really great figures. I also saw on, I think it was a website or news piece that came out that you did some research that showed that 64% of Australian shoppers say a lack of security was a purchase deterrent. 64%. That's a huge, huge, like two thirds of the population worried about security of their E commerce parcels. What are the most common types of security and fraud that you see in that last mile piece?
David McLean: Sports piracy. People picking parcels up on the side of the road. Is it a massive problem in Australia? No, it's growing. It's not as pervasive as it is in some other markets like the us. We know of some organized groups in Melbourne who literally follow courier vehicles around picking up parcels as they've been dropped off. And you see it on some, Everybody's seen the YouTube videos of some, some random person just walking up to somebody's steps and just taking a parcel. They don't even know what's in it. Right. So it is growing and there's a concern. And I actually think there's a few things going on here, Nathan. I think if you're buying something that's fast fashion and you don't really care or you know, it's not critical, not so much concern. But if you're buying something of value, a mobile phone, a PC, some electronics, whatever, that's where the apprehension starts to build. And I think what happens is sometimes you then decide, look, it's a great price on online for that, but just in case I'm not home or it's a missed delivery, I'll go into the store rather than the convenience of buying it there. So we think it's important, especially for high value items, that you make sure that your customer knows that there's a secure click and fix a solution so that they're able to say, you know, I bought It I've got a great deal, I'll get notified when it's ready and I'm not worried about ports piracy but yeah, it's becoming a real concern for lots of, lots of Australians and
Nathan Bush: I think it's two way too because it's also from the retail side that there's that concern. Especially when you get into your premium or high ticket items, you want to be able to do some beautiful packaging, you want that unboxing experience to be great. But if you're delivering something that you know is going to be on point porches, you don't want the brand name shouted out or hey, this is jewelry like and do that premium experience. So you've got to hide it in a dirty cardboard box. Right.
David McLean: You're hitting nail on the head there. Because one of the things I say to retailers is you've done a great job of building this beautiful website and you've got all of this packaging and you need to remember that the purchase experience doesn't end at the cart. The purchase experience actually ends the moment the customer's got that product in their hands and how they get that product is a part of that purchase experience. If you've got a physical retail store that's all done in one go, you're giving that customer a full experience when you're online, you kind of giving them this beautiful website and then you kind of in the hands of the gods in terms of what the experience is and then you got to do all this stuff, you've got to, you put this beautiful box and then you put it in this outer and you're trying to hide what it is and all of those things give your customers options so that you don't have to worry about that and that improves their purchase experience. It's likely to create some more stickiness. I say all the time it won't hurt you to try and give the customers that option and see what happens.
Nathan Bush: Yeah, love it. And now I was amazed to look back because you hear what you've described here and this is a complex network like Last Mile I think is one of the biggest challenges for retail and service providers to the e commerce industry and what you've pulled together here, 2200 pickup locations, working with retailers, working with couriers, developing the team tech, that's a complex network. You started this 10 years ago so it's not a Covid baby.
David McLean: Yeah, no, no.
Nathan Bush: What's been the most challenging part of getting it to this point?
David McLean: I'd say a couple of things. The first thing I'D say is that I didn't know what I was doing at the beginning. Let's be honest, if you ever see me on one of those Shark Tank styles things, talking as if I know everything, you have every right to punch me in the face because it's just not true. We made every mistake possible. We thought it was going to be pretty straightforward building an alternate network to Australia Post that gave people the opportunity to manage and process parcels. I think the hardest thing at the beginning was the actual network and making the network compliant with the management of parcels. And there is some compliance required. You know they've got to store them securely and out of sight and away from customers. Customers don't like walking into stores and seeing parcels everywhere gives them a sense of a lack of security and a lack of care. And then when you're looking after carriers such as DHL Express whose brand is really up there and they really care about every single movement of those parcels, you've got to do a good job to be compliant. And if you aren't compliant quickly enough, it's costly and therefore it's hard to make money when the margins are so low. So compliance was the first thing that was of real importance and making sure we have the right configuration. In actual fact, Nathan, we turned off over 600 locations over the last four or five years due to non compliance. Just not caring enough. So we want to work with retailers who are really passionate about customer service and looking after people's parcels. So that was the first thing and that's an ongoing issue and hard.
Nathan Bush: You've refreshed your website. The new range is about to drop. You've never had more customer service options. Hey, but take a look over there at that boring pile of packaging boxes.
Nathan Bush: Ugh, ugly.
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Nathan Bush: You're obviously dealing with both a physical space compliance and a customer service compliance on the physical space because you've got such a different industries and locations. How do you roll that out at scale to make sure everyone's compliant?
David McLean: So the first Thing we do is we do an assessment of the store in terms of size. How many parcels can that store handle both in and out, how many drops can they manage a day? And then what's the compliance and what's the. Therefore, what's the capacity that we're. The capacity management requirement. We tend to only want about 80% of the actual capacity being managed at any one time, just because of any variation in our estimates of standard sizes of parcels. So that's, that's the first thing. Then the second thing is that the system, the checking in and checking out of parcels. So when a courier drops parcels into the store, they must check them into the system within 15 minutes because the moment it's checked in, the notification goes to the customer and the customer's on his way or her way to collect their parcel. So that compliance, checking names, checking id, making sure you're processing against the PIN so that the wrong person doesn't receive the parcel. All of these things are important in compliance and also with the carriers. If a parcel has been sat there for five days or more, each carrier has a different policy on what the returns are. So the system will tell the agent it is time to check those parcels out so that we can send a notification to the carrier to collect those parcels. So there's a bunch of work around compliance there. And then as I said, you know, making sure the parcels are kept behind the counter and that you're respectful and operate with some friendliness and customer service to them.
Nathan Bush: It makes sense why you want to make sure that you reward those outlets. Because this isn't a passive income. Right. Because you actually want them to be proactive around the experience. Yeah.
David McLean: And they put a lot of effort, they put a lot of effort into it to manage these parcels. So what I'm trying to do with them is we want to move around that so there's other benefits that they can have. And then there are different parcel types. You know, we've got some of our locations that actually now do shipping. You can actually come to them to ship parcels rather than going to a post office. So there's all these sorts of services that build around it. So we are trying to get them to see themselves as little sort of mini hubs for, for parcel management.
Nathan Bush: That's cool. And are you doing the return side of it?
David McLean: Yeah, absolutely. So the drop off is a little easier because the customer literally just comes in, hands the parcel over and leaves. And then we scan that into the system and it notifies the carrier that there are parcels to be returned. One of the things I say to retailers on that is we've seen some stats around returns that say only 33% would rate their experience with returns as easy and 82% would buy more if they could get a refund. At the moment they've dropped the parcel off. Well, our system allows you to do that as a retailer. When the parcel is dropped off, we scan it, there's a notification, they can actually release that return. How good would it be? As the customer's walking out, they see a text message saying, your return is now back into your account, your refund is into your account. So it creates all of these experiences that we think make it better for the customer to feel good about buying, feel good about returning, feel good about engaging more and more with that particular retailer.
Nathan Bush: I love that because there's something really nice about being able to help a customer just tick an item off their day to day to do list. But there's something nice about being able to go, yeah, it's finished. I don't have to wait around and look for the refund. I don't have to package it up. I can just get it done, job done, ticked off, move on with my day.
David McLean: That's it. Very important. And for us, I think the benefit and part of this, because we work on such slow margins, we've got the efficiency of these things down to what I would consider a reasonably fine art. But it's all about our business is based on volume. So we must find ways to make it attractive for the customer to want to use it. Therefore, let's focus on things that make it easy for them to work through these experiences. Yeah.
Nathan Bush: And speaking of volume, you are heavy on the expansion trail at the moment. I can see that you've gone into New Zealand and eyeing off further expansion. Do you feel that the Hubbed offering will be the same in other territories as it is here in Australia?
David McLean: Yes, with some differences. But we really, as I said before, our mission is to reduce the world congestion and emission by moving parcels through our network. So we've turned on a 2000 store network in the Philippines this year. That's going pretty well for us. We'll be turning on three other Southeast Asian markets this year. I think we're scheduled for Korea, Taiwan and Singapore. And then we have four other markets scheduled for next year, I think Thailand, Vietnam, Malaysia and Hong Kong. 5. So we're turning those on now. If you think about the carriers that we work with, we've done deep integrations into their backend systems and A lot of these carriers are global. So the fact that we look after DHL or UPS or FedEx for example, in this market means that we can look after them in any other market because we're already integrated. And so we think that our strategy is to continue to provide this service to carriers and their retail customers into marketplaces and to take aggregators and integrate with them in as standardized as possible a manner we can so that we can just replicate it in other markets when we establish the appropriate network. Makes sense.
Nathan Bush: And when you're looking at those new markets, do you look first and foremost at kind of high density, high commuter kind of locations or is there something else that you use to pinpoint the next move?
David McLean: From a market point of view, we look at where the carriers are asking for the most demand. So if carriers are saying, hey David, it would be great if you did something in the Philippines, then that's the first move because that means there's likely to be volume that supports the investment in the move to that market. From a network point of view, we look for standardized networks wherever possible so that we can manage compliance from the head office down because it's the most cost effective way to do it. And then we want standardization of the system in store. Even though our services, a SaaS service, it's all cloud based logins and the rest of it, the more standardized the platforms in store are, the more consistent the use cases are around the way that the staff engage. So we look at those things as well.
Nathan Bush: So good. And like we mentioned, you've got 2200 locations here in Australia, pickup locations. Is there anywhere and you can dream big with this that you would love from a convenience perspective to turn into a convenient pickup point.
David McLean: Kind of two things come to mind. The first thing is one of the biggest challenges with E commerce is bulky items. It's all very well for the one to five kilo packages, which is the vast majority, but something that's really inconvenient for people is managing bulky items, especially when they're not around for delivery. So I'd love to do more with storage networks. We do a lot of work with national storage. I'd love to expand that so that we can actually have facilities, our own facilities within those locations and we can have our own people manage more bulky items or heavier stuff so that Kogan TV should get delivered to a national storage where we actually have the space to manage it rather than that poor news agent, what have you done to me, Nathan? But also I think external lockers, we think that There are going to be more and more. If you look at parts of Europe, about 40% of all parcels are picked up outside of home. And so we know the trajectory for out of home pickup is going to grow in Australia in line with everybody else. And so we feel that if we give. Wouldn't it be great if there was a locker at the end of your street that you could literally pick your items up from? So we're looking at various models around locker management so we can put in places where the density maybe doesn't support a pudo and a locker makes more sense. So that's the sort of thing we're looking at doing.
Nathan Bush: Can I put a suggestion in?
David McLean: Yes.
Nathan Bush: Can you organize for pubs to collect parcels? Because then I will collect all the parcels for our family. There we go. Dad's been gone for 15 minutes. Oh, he's just picking up the parcels. He may have snuck in a cheeky beer as well while we're there.
David McLean: I think that's a great idea. As long as I'm allowed to tell everyone that it was my idea, because I actually think that's quite awesome. Seriously, Nathan, that has never occurred to me. I think that's a really good one. Commissions? No commissions. It was my idea.
Nathan Bush: No, that's the benefit of coming on this show.
Nathan Bush: We never know where we'll go. I love it. All right, David, thank you so much. You've shared so much and I've loved learning about the Hub model. I'm actually a bit embarrassed that I didn't know a lot beforehand, so it's been great to uncover all of that. We've talked about expansion into other territories. What's next for yourself and the hubbed team?
David McLean: We've got four key focuses and the first one is a focus on people and culture. It's all been that way. Look, when I left Microsoft, when I set Hub, I always wanted it to be a place that I love coming to work at, and we've worked really hard on that. And we continue to work hard on just making this just a great place to work, just a great place for people to enjoy being around each other. Even though it's funny, we've got a full remote working flexible model, but most people still just want to come into the office and be around each other, and I'm really quite proud of that. And so we want to continue to focus on that. The second thing you've actually raised is our brand. We've been so busy really being a B2B brand service in the carriers. We don't really talk to retailers directly, typically in the past, or consumers. And we've now decided that we just need to do a better job of making sure that people know that this service is available and what it does for the environment and how it gives people options and choices. Third thing is we're focused on launching a bunch of new products. We've some services around our logistics Hustler carriers, some services for our retail network that allows them to do some marketing to these customer bases and some other things. And then fourthly, we've mentioned the international expansion, so we're very, very focused on those four things.
Nathan Bush: Beautiful. Fifthly pubs.
David McLean: Yes, exactly.
Nathan Bush: All right, David, if we have people who listen to this, namely retailers or potentially convenience locations who have listened to this and going, I'd love to explore partnership with David and the Hub team, how can they best get in touch?
David McLean: We've got an email address, helloub.com I'd like to say that was my idea, that was something that the marketing team came up with and it seems pretty good. So, yes, hello, if you contact us@helloub.com we'll be all over it and contact you back. And always happy to have a discussion and talk about this industry and what's happening.
Nathan Bush: David, that's brilliant. Thank you so much for sharing the Hub story so far and what you're offering to retailers and customers. Can't wait to see it grow further.
David McLean: Thanks a lot, Nathan. Really appreciated the chat. Cheers, mate.
Nathan Bush: I really hope my pub idea gets
Nathan Bush: up and I'm going to be very happy to pick up my family's parcels this Black Friday.
Nathan Bush: If that is the case, here are
Nathan Bush: the three lessons I got from my chat with David. Number one, click and collect options for all. Now, whether you're an online retailer, an offline retailer, omnichannel retailer, there is actually no excuse now not to be able to offer your customers a convenient click and collect option, even if you have no stores, as we saw at Hubbed, but also with previous guests, such as Browse, the technology and the partner network is now set up to allow all retailers to offer Click and Collect if
Nathan Bush: your customers will use it.
Nathan Bush: Number two, porch piracy is a real concern and not just in the U.S.
Nathan Bush: but here in Australia.
Nathan Bush: Whether it's happened to them or not, customers are genuinely concerned about others stealing their parcels. And as we saw, you can offer options such as Hubbed, where the parcel doesn't get left at the door. You could also offer extra prompts for instructions on where to leave the parcel around the house, or offer extra discreet packaging showing customers that you are minimizing.
David McLean: Minimizing the risk of porch piracy could
Nathan Bush: be just the assurance they need to convert at checkout. And number three services are products too. I really like that David was up front with the cost to use the hub service around $2 per parcel, but when he put it in the perspective of the ATM and that we used to pay about the same amount to get our hands on our own cash, it made perfect sense. If you are offering services above and beyond the standard offering, whether that be delivery, gifting or personalization, don't be afraid to experiment charging for those services if
Nathan Bush: they are valued by your customers.
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Speaker E: to go next level on.
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Nathan Bush: Thanks for listening and until next time, keep those customers adding to cartoon.
