UPS expands B2C presence with Kiala acquisition

UPS said this week it has acquired Brussels-based Kiala, a technology provider with a platform that allows e-commerce retailers (e-tailers) to offer consumers the option of having goods delivered to a convenient retail location.

Financial terms of the acquisition were not disclosed.

Established in 2001, Kiala has operations in Belgium, France, Luxembourg, the Netherlands and Spain. According to information from Kiala’s Web site, the company’s platform offers consumers with fast delivery of parcels to a convenient collection point, which is typically a store, and through the Kiala platform consumers can track their parcels online and are notified via SMS, e-mail, or phone when a parcel has arrived at a specific delivery point.

The Kiala network is comprised of more than 7,000 “Kiala Points” that handle up to 145,000 parcels per day, with more than 300 companies, including H&M, Esprit, and BrandAlley, among others, using its services.

In an interview with LM, Norman Black, UPS spokesman, said that this deal was not necessarily made for UPS to expand its business-to-consumer (B2C) presence, as much as it was that UPS came to the conclusion that it needs to be a leader in developing alternatives for e-tailers in order for them to satisfy their customers.

“Everyone knows what the Internet has done to the retail industry and we all know how fast e-tailing is growing,” said Black. “In the U.S., B2C volume is now up to 35 percent of our average daily volume [at about 4.7 million packages per day]. That has historically been a difficult area to serve profitably. It is not like taking a bunch of packages to one business to sell. When you have residential volume, it usually drives up your costs to serve.”

And in the U.S. UPS’s MyChoice offering, which gives consumers a one-day alert for when a package is coming and allows them to control the timing and location of the delivery. Black said that this helps both the consumer and UPS, because it makes it unlikely that UPS will not be able to make a delivery on the first stop or make multiple attempts to deliver a package.

Like the U.S., European countries are also seeing strong B2C volume growth, and Black said UPS is interested in any other approaches it can take to help e-tailers satisfy their customers, explaining that Kiala is interesting in that regard.

“Kiala has a network of convenient locations in each city they have a presence in,” he said. “So if a consumer is online ordering something and he or she knows they won’t be home or does not want to take a chance on missing a delivery, when ordering goods they can leverage a local store, like a dry cleaner, that is a Kiala shop and specify that the delivery be delivered there whenever it is convenient for their schedule. We call that business-to-retail.”

With the U.S. being the most sophisticated network for UPS in terms of technology, Black said UPS MyChoice fits its needs and is similar to what Kiala offers. But outside it does not have the same offering, which makes Kiala a good fit for the company, he explained.

Black said that Kiala has about 140 employees and that they will all become UPS employees.