what3words | delivery - post - logistics

what3words | Addressing the world

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WHAT3WORDS FOR DELIVERIES How 3 words reduced missed deliveries by 83% for one UK courier Direct Today are one of the many UK Couriers that struggle with poor addressing and geocoding on a daily basis. When they can’t find an address, they can’t make a delivery easily and this costs the business time and money. By utilizing the what3words innovate addressing system to pinpoint delivery locations they have seen an immediate reduction in missed deliveries.


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MISSED OPPORTUNITY

The UK boasts one of the most efficient delivery networks in the world. Ubiquitous ecommerce penetration, fierce competition amongst couriers and the distribution-friendly size of the UK makes it easy to send and receive parcels. But according to the IMRG Metapack Delivery Index, only 89% of UK consumers can expect their online shopping to be delivered on time and to their expectations on the first attempt. That’s over 1 in 10 orders not meeting customer expectations. Over 100m orders a year [1] don’t reach their destination first time. This costs the industry an estimated £1bn in re-deliveries [2]. Overall 0.5% of all deliveries fail in the UK due to poor addressing [3]. Of course, there are many reasons for this – the individual not being home when the package was delivered, a box could be damaged or lost in transit, poor labelling or perhaps even bad traffic. But imprecise addressing is also a key factor.

“The ‘Last Mile’ is often the least efficient link, comprising up to 28% of the total cost of delivery” PARCEL2GO.COM

Whilst the UK is fortunate to have one of the most advanced addressing systems in the world with a postal code system stretching over almost 60 years of continued usage, it’s far from problem-free. Postcodes can cover large areas, new houses are built and building names change. There are 2.4m address changes in the UK every six weeks [4]. The process of getting a house onto a map is called geocoding. Writing for The Guardian in 2014, the now-what3words-CTO Gary Gale stated that: “getting to that elusive 100% accuracy rate hasn’t been done yet and probably never will.” [5].


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Consequently, whilst most addresses appear on maps, some don’t and when they do they are often in the wrong place or are just dropped in the centre of a large building complex rather than at an entrance.

This means that a street address entered onto checkout pages may not be easily found, leading to the inevitable “I think I’m here, where are you” call from your courier. Not finding the right delivery point easily is frustrating for the consumer and costs businesses money. On average the ‘last mile’, ending up at the consumer's home or business, accounts for an average 28% of all delivery costs [6].

“A reduction of one mile per driver per day translates to savings of up to $50 million a year” Jack Levis, Director of Process Management UPS [7]

Improving addressing and saving a few hundred metres on some of the average 120 deliveries each driver makes daily would have a significant impact.


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ADDRESS VALIDATION CAUSES CHECKOUT ABANDONMENT

Many customers don't know which company is delivering their order, but if something goes wrong it's the store where you bought the item which usually gets the blame. To avoid the risk of a failed delivery, many ecommerce outlets enforce address validation. According to a 2012 article on Econsultancy, enforcing validation of postcodes led to checkout abandonment rates of 2.5% in the case of Autoglass owner Belron [8].

Customers leaving their shopping cart means lost revenue for retailers and whilst address validation confirms a property’s existence, it doesn’t always mean a courier will be able to find it.


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DIRECT TODAY COURIERS

One delivery company that has struggled with addressing challenges is Direct Today Couriers, a subcontractor for a major global courier in the UK. They deliver mainly into rural counties and are responsible for the ‘last mile’ express delivery from a hub to the customer’s front door.

“Undelivered parcels cost us time, fuel and administration and can cause a huge issue…we want to get it right first time” Paul Creaney, Head of Operations, Direct Today

The challenge their fleet of 100 drivers face is finding named properties in rural areas where the centre of a postcode could be a mile or more from the customer’s house. If lost, a driver has no option but to phone for directions to a property. What makes Direct Today’s situation a particular challenge is that they don’t have access to the retailer – meaning the address they receive on the parcel is the only information they have and they don’t have the customer’s contact information. In February 2016, Paul discovered what3words and decided to put it to the test.


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100% GEOCODING ACCURACY

what3words is a global addressing system that has divided the world into 3x3m squares and pre-assigned each of them a unique 3 word address.

what3words is a simple way of referring to the delivery point of every property in the world. The address can be both viewed on a map and navigated to - the elusive 100% geocoding accuracy. The system is available via the what3words web site and app and 3 word addresses are also accepted in a range of GIS, navigation and routing software and apps.

3 word addresses are distributed so that similar-sounding addresses are located far apart, often in different countries. This allows what3words to provide validation and auto-suggest tools which detect incorrectly entered addresses and suggest likely alternatives. This is impossible to do with sequential and hierarchical systems such as GPS coordinates where similar results will often be near each other.


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IMMEDIATE DELIVERY EFFICIENCIES

Using a mixture of the what3words site in the office to discover the 3 word addresses remotely, and the app when actually delivering, Direct Today have been able to build a database of customers’ 3 word addresses to solve the last mile challenge.

Despatchers use the what3words site in the office to discover the 3 word addresses remotely and communicate this to the driver. Drivers then use the Navmii app which accepts 3 word addresses. Navmii enables a turn by turn, offline navigation to the precise 3mx3m location. Paul states “I’ve seen a massive decrease in undelivered parcels from around 30 each day to just four or five, and these tend to be address label errors.” Since utilising what3words, Direct Today Couriers have seen an 83% reduction in orders not reaching customers on the first attempt. With an estimated 100m+ orders not reaching the customer on the initial try, there’s much more the UK courier industry can do to improve customer experience and save money at the same time.


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INTEGRATION ACROSS SUPPLY CHAIN

To make accessing what3words system as simple as possible it has also been integrated into a number of industry-leading mapping technologies, including Esri’s ArcGIS platform, QGIS, and FME. Drivers can also use route optimisation software that accept 3 word addresses, including RouteXL and ZipZap, so addresses can be automatically sorted to determine the quickest route.

Navigation apps including Navmii, who boast 24m users and fleet clients such as supermarkets Ocado & Morrisons, and DHL-provider Infoware allow people to navigate to a 3 word address. Allies the address verification platform that supports over 240 countries and is used by many of the UK’s top businesses, including IKEA, the NHS, and the Post Office, now accepts 3 word addresses.

Blackbay, the leading enterprise software company working with couriers and postal services around the world has also integrated what3words. “We’ve gone from waiting by the post-box for weeks, to getting pizzas on moving trains. Delivery companies are no longer delivering to an address, but to an individual. Delivery has become vastly more personal and more


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responsive, but consumer expectations continue to rise. With online shopping now second nature, we’re moving to an on-demand economy where a delivery could be required whilst shopping, or whilst visiting the park. With W3W, Blackbay is able to provide far greater delivery accuracy inside of post codes and to an individual on the beach, at a concert in the park but in all cases: to the individual.” commented Nigel Doust, CEO Blackbay.

Online retailers including Mmarket in Mongolia, are also integrating what3words into the checkout process to reduce cart abandonment, avoid couriers having to phone the customer for directions and improve the customer experience.


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NATIONAL ADDRESSING SYSTEM

Mongol Post, Mongolia’s national postal delivery service, has adopted the addressing platform what3words for postal deliveries to customers across the country. Mongolia covers an area nearly the size of the European Union, but has no consistent addressing system.

Mongol Post customers will be able to discover any 3 word address using the free app, and simply write it on an envelope or enter it on the checkout page of a shopping website. Every citizen now has an address. what3words will be integrated across Mongol Post’s internal systems, while postal workers will use the 3 word address to navigate directly to the 3mx3m square where they will find the customer’s front door. Mr. Batsaikhan Tsedendamba, CEO of Mongol Post said: “I have been working at the Mongol Post company for 10 years now. During this time, we have been presented with numerous local and international addressing systems and technologies. Of them all, I believe what3words is the most user-friendly and optimal technology. We are glad to be introducing this innovation, particularly as we see increasing numbers of postal consumers. We are confident that our cooperation will be a successful one.”


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SOURCES

[1] http://www.metapack.com/wp-content/uploads/2015/07/MetaPack-June-2015-Delivery-Index-May-2015-Mini-version-21.pdf [2] http://www.bbc.co.uk/news/magazine-18709348 [3] IMRG [4] https://www.geoplace.co.uk/ [5] https://www.theguardian.com/technology/2014/jan/13/google-maps-geocoder [6] Rodrigue, Jean-Paul; Claude Comtois; Brian Slack (2009). "The "Last Mile" in Freight Distribution". The Geography of Transport Systems (2nd ed.). Routledge. p. 212. ISBN 978-0-415-48323-0. [7] http://www.postaltechnologyinternational.com/news.php?NewsID=53712 [8] https://econsultancy.com/blog/10959-are-online-retailers-being-tripped-up-by-postcode-entry/

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