PayPoint is putting goods on retailers’ shelves for the first time and is to develop its own parcel lockers following a bumper Christmas period.

Despite the total number of PayPoint’s CollectPlus-partnered stores falling by 2.5% last year, Christmas parcel demand in stores was up 11.3%. In an interview with Better Retailing, PayPoint’s head of strategic partners & parcels, Nick Williams, said early 2022 performance was also up and PayPoint would be looking to bring more stores on board, launch new services and find higher margin opportunities for shops.

The fall in its parcel store estate was attributed to Tesco removing PayPoint from its stores last year. Discussing plans to add more shops to grow the network again in 2022, Williams said the focus would be on local shops. “We’ve done analysis on where people actually live to make sure we are putting stores in where people live or travel, not so much a destination,” he said.

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Expansion will also come from the launch of PayPoint parcel pick-up and drop-off lockers. Despite the parcels boss saying he was “not convinced” by the concept, he said the firm would put some in and “see where it takes us”. However, he said a lack of space inside and outside of local stores meant they were likely to be installed elsewhere, but promised no impact on existing parcel-partnered PayPoint stores. “It’s extra volume on top of that,” he said.

PayPoint is also on the hunt for higher-commission parcel services similar to the latest expansion of its Randox lateral flow testing for travel scheme. As well as customers being able to click & collect a home testing kit in 2,500 CollectPlus stores, as of last week, customers can also buy the kits directly off the shelves in 300 PayPoint sites, stocked on a sale-or-return basis.

While the 2,500 stores receive 50p commission (double the standard parcel commission), the 300 shops ranging the kits in aisle receive a higher reward. Williams explained: “On shelf, they sell for £19.99 and we are giving the retailer much more – £3.”

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Challenged on whether PayPoint would recognise rising cost pressures faced by stores by raising retailer parcel commissions, Williams responded: “We acknowledge it’s tough for everyone. Increasing commissions? Honestly, right now is unlikely because I have the same pressure from the other end of the supply chain[…] I think it’s more like Randox, finding other things that are similar, and we’ve got a couple ideas out there.”

The parcels boss said footfall remained the main benefit and work is underway to bring more parcel customers through its partners’ doors. This includes hopes to allow any parcel to be returned at any CollectPlus site, negotiations to redirect all failed carrier doorstep deliveries to the nearest shop as standard, and putting store data such as parcel collection times and busiest hours online to help shoppers.

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