The online delivery war heats up


Transport and logistics provider, Toll Holdings Limited (ASX: TOL) has announced a deal with Victorian newsagents in a bid to grab a larger slice of the online shopping delivery market. The company plans to build a network of more than 3000 online shopping pick-up points across the country, offering choice of delivery times, weekend deliveries and alternative parcel pick-ups.

Toll is also in talks with a chain of service stations, which would offer parcel recipients even greater collection flexibility. Imagine filling the car up with petrol, picking up bread and milk, getting cash out and collecting your parcels – at 11pm on a Sunday night! Seems like service stations are becoming the little corner shop of old.

Toll managing director Brian Kruger has told the Australian Financial Review,

“Online shopping is one of the few areas in Australia, outside of resources, which has grown quickly, and looks like it will continue to grow quickly.”

PricewaterhouseCoopers has estimated that online spending was around $13.6 billion last year, and has predicted that annual online spending by Australians would almost double to $27 billion by 2016.

Toll is just one of a number of companies trying to cash in on the online retail boom. Let’s face it, everyone’s doing it.

Australia Post announced a partnership deal yesterday with a new online shopping service, Tarrazz.com.au, to deliver customer purchases. Tarrazz currently has 250,000 items including products from retailers like Wal-Mart, but plans to increase that to more than 3 million items within the next year.

Digital mail boxes

Speaking of Australia Post, the government-owned organisation also has plans to set up new digital mailboxes, which would be different to email services. Australians will be able to receive utility bills, rates notices and government mail at a secure digital mailbox, rather than in the post. Not only will we be able to view the bills, but we’ll be able to pay them online as well, from within the digital mailbox. Earlier this month, Telstra Corporation (ASX: TLS) was announced as the host of the new Australia Post service, which is expected to be operational in 2013.

This is not really a new concept. Share registry Computershare Limited (ASX: CPU) and junk mail king Salmat Limited (ASX: SLM) announced in March 2012, that they had joined forces to launch Australia’s first digital postal service, which would allow Australians to access mail from various companies including banks, insurance, utilities, telecommunications, government and share registries.

The Foolish bottom line

Online is king apparently. Many sectors are facing structural changes as consumers increase their online transactions. If companies don’t embrace the change, they could be left for dead.

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Motley Fool writer/analyst Mike King doesn’t own shares in any companies mentioned. The Motley Fool‘s purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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