Kinek Package Delivery Service
Addressing a Customer Pain Point with a New Business
By Ronni T. Marshak, Sr. VP and Sr. Consultant, Patricia Seybold Group, January 14, 2010

NETTING IT OUT

Why Is This Important to Customers?

A widespread customer pain point is not being home to receive packages. Here’s how one company eases this pain that is experienced by so many of us.

Why Is This Important to Your Company?

What is particularly noteworthy about the Kinek business model is how a company can take a very specific, but virtually universal, customer scenario and build an ecosystem of partners to solve customers’ problems. The company is providing new business revenue opportunities for itself and for a growing network of partners, by making it really easy for them to join the ecosystem.

ECOMMERCE DELIVERY ISSUES

Improving the Package Delivery Experience

Just a few weeks ago, I told you about my experience with UPS. To summarize, I received a notification from UPS, sent to me via snail mail, that a package couldn’t be delivered to me because they didn’t have the correct street address. Yet they sent the notice to my correct address! Since there is a UPS distribution center not too far from my home, I picked up the package, since I didn’t want to have to wait around at home on the new delivery date. The UPS employees at the center speculated on what happened: “The driver couldn’t find the package when he got to your house, and when he finally found it, he was across town, so he just wrote down ‘wrong address’ and went on with his day.”

The Potential Problems with Package Deliveries

As someone who works out of a home office, I don’t have the luxury of having packages delivered to a business location where there is always someone to receive them. I live in a condo building in Boston, and I have experienced the following problems receiving packages:

•I’m not at home to “buzz” the delivery person in so she can leave the package in the lobby. So one of those useful “Couldn’t Deliver” stickies is attached to the front door of my condo.

•Even if someone else is nice enough to buzz the delivery person in, I am required to sign for the package. Then one of those useful “Couldn’t Deliver” stickies is attached to the front of my mailbox.

•When the package is left in the lobby, there is the chance of damage or theft at the hands of anyone who goes through the lobby (not only residents, but guests). If it is damaged (once, some guests leaving a late night party decided to jump on the package for fun), it’s your loss since it was delivered safely. If it is stolen, you might not even know that it had been delivered at all and keep waiting for it!

•Occasionally, the delivery person gets lazy and just leaves the package out on the front stoop—an invitation for theft! In one case, the package was still there the next day when I went out, but we had had torrential rain, so the books inside were ruined.

I admit that the first two scenarios are the most likely, but then you have to arrange a new delivery time (and make darn sure you’re home that day) or else go to a pick-up location, which isn’t typically convenient, and is rarely open when you aren’t working.

Having dealt with all these problems, how appropriate that I should be briefed about a new service from a new company focused on solving some of the problems associated with package deliveries. See Table A for a look at what most consumers want in a package delivery scenario.

The Online Consumer’s Package Delivery Scenario

Please download the PDF to see the table.

Table A. Most online consumers have specific things they want about package delivery. Not wasting time—having the delivery be convenient for them—heads the list! But they also don’t want to pay exorbitant shipping charges.

KINEK’S NATIONAL NETWORK OF DELIVERY LOCATIONS

Kinek is a privately funded software solution provider for e-commerce logistics headquartered in Canada with its U.S. office in Sunnyvale, California.

Value Proposition

Very simply, Kinek maintains—and very correctly—that sometimes people need a convenient, alternative delivery location for packages. As the company points out, in many US families, both adults work, single working professionals are not at home during the day, and many corporations will not allow receipt of personal goods at your place of work. Besides the delivery problems I mentioned above, Kinek points out that having a safe and always manned delivery locations addresses the following issues:

•Wine and other alcohol deliveries require adult signature, so children cannot accept the deliveries to the home if the parents aren’t there.

•Many consumer electronics also require a signature in order to be delivered.

•You can keep birthday and holiday gifts a surprise by not having them show up on the doorstep.

•Flowers, fruit and other perishables are received immediately, so there is no danger of spoilage (unless, of course, you don’t pick up your delivery within a day or so from the Kinek point).

•Many courier companies offer lower shipping rates to consumers if they send parcels to a business address. So shipping your parcel to a Kinek Point versus your home may save you money on shipping fees.

To address these issues, Kinek has teamed with local businesses to create a nationwide network of “Kinek Points” where people can ship parcels to a convenient location close to their homes, offices, or along their every day commute. By shipping to a Kinek Point, customers can be sure that deliveries are always made on the first attempt. (See Illustration 1.)

The Kinek Value Proposition

© 2010 Kinek

Illustration 1. Although not as convenient as having packages delivered to your home when you are home and ready to receive them, by shipping to a Kinek Point, customers can be sure that deliveries are made on the first attempt. Signing up is free, but there is a per-package delivery fee charged by the Kinek Point that receives the delivery.

Kinek Point Locations

According to the company, almost any business has the potential to become a Kinek Point so long as it has established hours of operation, a computer with an internet connection, and an area in which deliveries can be securely stored. Examples of current Kinek Points include convenience stores, retail locations, video outlets, and home-based businesses.

There is no cost for signing up and becoming part of the Kinek Point Network. Kinek Point partners charge a fee for parcels received at their locations—the fee per package is up to the individual Kinek Point. Kinek makes its revenue by charging a $1 fee per package, which the Kinek Point pays via PayPal. This fee, of course, is subject to change. Kinek is currently supporting Kinek Points in the U.S. and is recruiting Point partners in Canada. Currently, there are over 350 Kinek Points in 39 states nationwide. The company’s “hot zones,” where it has done the most active partner recruiting to date, and thus has the most Kinek Points in operation, include San Francisco, Dallas, and Ft. Lauderdale.

As mentioned, fees are set by individual Kinek Points. While Kinek recommends a fee of $1.50-$2.50, this is merely a guideline. The company encourages Kinek Point partners to consider geographical location, available storage space, and the number of competing Kinek Points in the area when determining a fee structure.