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SPECIMEN ANSWER - Evaluate the impact on the local stores from being involved in the distribution process with Hermes. (9)
One impact on the local store is that their own sales may decline because staff time will be taken away from other duties whilst collecting parcels. This is because, particularly during peak times, staff will need to be on the tills serving customers who are collecting their parcels which have been delivered by Hermes. These stores are convenience stores such as Co-Op, and the time dedicated to collecting these parcels will therefore take time away from duties such as replenishing the shelves with food items such as bread. This may lead to the store missing out on sales opportunities because customers are unable to buy items, despite the fact that they are present in the stock room. This means that any benefit from parcel commission is counteracted by the loss in revenue caused through the missed food and drink sales. As a result, the store will be no better off financially and may start to build a poor reputation for stock availability.
This is true to an extent, however, impulse and unplanned purchases are also likely to occur as a result of this type of agreement with couriers such as Hermes. For instance, a customer collecting their parcel may purchase confectionary whilst they are visiting the store. For the local store, this means a sale of their own products plus commission. Combined, this offsets any loss in earnings outlined previously, meaning that this partnership is likely to be a profitable one for the local store overall.
