Meet Hubbed: the brand disrupting online deliveries
How Hubbed tapped into customers’ cravings for convenience.
It’s a familiar – if frustrating – sight: a small note tucked under the door announcing that you’ve missed your parcel delivery.
While most people might spot a missed delivery card and view it as an irritating inconvenience, in 2012 David McLean saw something much more exciting: a business opportunity.
That was the year that McLean came up with the idea for Hubbed, an alternative parcel collection service that allows packages to be sent or dropped off at collection points, such as petrol stations or newsagents.
For consumers, Hubbed offers “convenience, security and reliability”, says McLean. “The, ‘I want to be able to pick up my parcel from a 24-hour, seven-day BP station. I know it will be there. I can pick it up when I want.’”
[Customers think:] 'I want to be able to pick up my parcel from a 24-hour, seven-day BP station. I know it will be there. I can pick it up when I want.'”- David McLean
Today, Hubbed has more than 2000 collection points around Australia, and partners with a range of retailers, from BPs to newsagents, plus all major delivery providers, including DHL, Couriers Please and Sendle.
As well as missed deliveries, Hubbed offers three other key services: click-and-collect, returns and the option for customers to pick up and send directly from a network location – all without standing in line at the post office.
Increasingly, McLean says, consumers are paying for parcels to be delivered straight to a collection point near them, by selecting Hubbed ‘click-and-collect’ via a plug-in at retailers’ checkouts. “Maybe they don’t want the parcel left outside their house because it’s valuable or they don’t have a safe place,” he says.
McLean launched Hubbed after spending more than a decade in sales and marketing at Microsoft. It was only after an intern quit to start his own (now-successful) business, that McLean, then 47, realised it was time to make the leap himself.
“I’d always been inspired by entrepreneurs, but I never really had the courage to do it. When I saw this young man doing that, I thought, ‘Well, if I don’t do it now, I most probably never will.’ As much as everyone thinks that start-ups are a young person’s game, I thought I had a lot of knowledge and experience with consumer products and retail.”
I’d always been inspired by entrepreneurs, but I never really had the courage to do it.”- David Mclean
The next step was to come up with a business idea, so McLean set about searching for an opportunity in the enterprise space, with which he was familiar, and in an industry that seemed ripe for disruption. “I thought about utilities, and one of those is managing, shipping and receiving parcels. I saw an opportunity there, and actually I was surprised it hadn’t been done before.”
McLean then spent a year researching the delivery market before pitching the concept to newsagents, petrol stations and delivery companies, who were all receptive. “For a retailer, it was a relatively easy sell: ‘I’m going to deliver customers and pay you for it,’” he reasons, noting that newsagents, in particular, were struggling to attract foot traffic. “The average age of a newsagent customer was 57, and online [shopping] was taking away some of their business. So, right at the beginning, I thought that Hubbed would be a way to bring the community back to the newsagent.”
For carriers, too, the collection model was attractive. “They're saving money because they're not having to bring parcels back to the depot and then redeliver it. They can just drop it at a collection point.”
[Couriers] are saving money because they're not having to bring parcels back to the depot and then redeliver it.”- David McLean
Next came the tech build. “I never had any doubts about [creating] the technology,” says McLean, who initially bootstrapped the business, before Singapore Post took a 30 per cent stake. “I have good people around me, and the technology will never stop being iterated and evolving.”
COVID-19 has been a boon for Hubbed, which was valued at $25-45m two years ago, with the surge in online shopping driving more demand for click-and-collect services. However, McLean believes that, even after the threat of COVID-19 subsides, flexible delivery will continue to grow, with retailers realising they need to offer it to remain competitive.
“Online retailers are increasingly understanding that the purchase experience no longer finishes at the cart. It actually finishes at delivery… and if you don’t give customers choice, convenience and control, that can affect your conversion rate.
“Because if you’re an online merchant and you only provide next-day delivery, and you don’t provide same-day or express delivery, a customer might move to a competitor of yours who does provide those services.”
Hubbed’s model is also more environmentally friendly than door-to-door delivery, says McLean. “If you think about a courier, he may be able to deliver 150 parcels a day, dropping off from house to house. If he or she is able to drop 20 or 30 parcels to one location, he’s just reduced a whole bunch of travel and congestion on the road and C02 generated, because most collections are done as part of an existing journey, typically to or from work or the shops on the weekend."
McLean says that the environmental benefits (some studies say collection-point delivery along with other initiatives reduces emissions by 30 per cent) are becoming more of a draw for shoppers, especially Millennials.
Promoting this benefit is one of McLean’s plans for 2021 – along with growing the international business. “We actually licence out technology to other customers now. We’ve now set up in New Zealand, and we’re just about to roll out in the Philippines.”
Here are David’s three tips for those starting out in business:
Embrace the struggle. “Without a shadow of a doubt, the constant self-questioning was the hardest part [of launching Hubbed] for me. I would think, ‘What am I doing? Why am I doing this? Why are they taking so long to sign up?’ I read a great book by Ben Horowitz, The Hard Thing About Hard Things, and there’s a section about ‘The Struggle’, which was great. It encourages you to embrace The Struggle because on the other side of that there’s more joy in the success of small things than I’ve experienced in my working career.
Be honest with yourself about what you’re not good at and surround yourself with people who are better. And then get out of the way.
Engage with companies and partners who move at the same speed as you as much as possible.
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