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Case Study: A tech startup and a popular mass-market retailer joined forces to solve logistics challenges for online shoppers in inaccessible areas

The implementation of Pargo’s last-mile logistics solution on the HomeChoice platform solves the delivery challenge of reaching online shoppers in inaccessible areas.


Overview

 

HomeChoice, the largest home-shopping retailer in Southern Africa, partnered with Pargo in 2016. The partnership was formed to solve the difficulties that HomeChoice faced in delivering to inaccessible areas in South Africa.

HomeChoice, one of the leading omni-channel retailers, targets a middle-income market in South Africa. Before their partnership with Pargo, HomeChoice primarily relied on the South African Post Office (SAPO) for their deliveries.

In the initial stages of their partnership, HomeChoice utilised only 25 “X-Large Pargo Pickup Points” that catered to their large homeware delivery needs.

Following protest action by the SAPO workforce in 2018, Pargo stepped in to assist HomeChoice in an effort to help with the growing backlog of deliveries. The mission to alleviate delivery constraints to inaccessible areas resulted in the total number of pickup points increasing to 189 across all nine provinces.

   

The Problem

 

The main problem that HomeChoice faced before partnering with Pargo was the inability to reach customers in inaccessible areas. This, coupled with the national postal strike, left HomeChoice with no choice but to make use of costly traditional home delivery. Home delivery also came with its own set of challenges, as it did not combat the issues related to inconclusive addresses and inaccessible areas.

   

The Solution

 

Pargo has enabled HomeChoice to provide a seamless method for customers to Click and Collect their purchases with two solutions.

   

A Full Integration With Pargo

 

HomeChoice made the Pargo Click and Collect functionality available to their customers by simply integrating the Pargo delivery app on their check-out page. Customers can now simply select a Pargo Pickup Point from which to collect their order and Pargo oversees the parcel’s entire journey from HomeChoice to pickup point.

   

HomeChoice Uses Pargo’s Infrastructure and Innovates

 

In addition to the X-Large Pargo Pickup Points Homechoice added additional pickup points in informal settlements using revamped shipping containers. The HomeChoice delivery points rely on Pargo couriers and technology to manage the software behind the system. This innovative method has allowed 95250 customers to fulfil deliveries from HomeChoice despite delivery challenges.

   

Unique Benefits Of The Partnership Include:

 
  • Reduced courier costs
  • Pargo offers decreased costs through consolidated deliveries, meaning it is more affordable to make use of Pargo’s Pickup Points compared to traditional home delivery.
  • 100% delivery success on the first attempt
  • Pargo’s 100% Click and Collect success rate translates to superior customer experience. No more missed deliveries
  • Pargo takes control of the entire parcel journey
  • Pargo manages the customer journey from check-out to the selected pickup point
  • Customer communication
  • With automated communication systems and an on-the-ball customer service team in place, Pargo customers are updated about their parcel’s movement at all points of the journey
  • Easy online tracking
  • Customers can see where their parcel is at all stages of the journey by making use of Pargo’s user-friendly tracking interface.
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    Success Recipe

     

    While Pargo’s focus on tech is strong, the logistics company believes that human relationships and collaboration are crucial in achieving success. As a result, Pargo invests a fair amount of its time and budget into nurturing relationships with courier partners, suppliers and pickup points. A designated team engages in regular communication and training sessions to ensure that there is a smooth transfer of parcels along the supply chain.

       

    The Results

     

    As a result of the partnership with Pargo, HomeChoice can successfully deliver parcels to customers across urban and rural areas without incurring the high costs associated with traditional courier delivery. The quick project has enabled over 103, 000 HomeChoice customers to receive their parcels through the Pargo network, of which nearly 80% have been collected.

    Pargo has also superseded the Post Office in establishing points of access across the country. To date, 2500 Pargo Pick-up Points cover 87% of the nation’s postal codes. SAPO currently has 1483 offices.

    Logistics Manager at HomeChoice, Terry Watt relays HomeChoice’s appreciation for Pargo, saying:

    “Pargo offers top-notch quality service and rates across the board. We are always very pleased with their work. We are particularly pleased with the fact that we have received extremely positive feedback from our valued customers every time we use Pargo to send parcels.”