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  • Challenging retail multichannel operations

    December 8, 2014

    Retailers have to jump into on-line opportunity to keep best possible visibility and customer loyalty. However, this makes the supply chain logistics more complicated than a few years back. If seen as an opportunity this opens up new exciting possibilities to streamline logistics and surprise the consumer with an excellent service.

    The key trends in retail environment for 2014:

    • Discount stores are making it big across Europe. It is predicted that these types of shops are here to stay also after financial downturn and already now they are investing heavily in new sectors, for example Lidl will present a new fashion line in UK spring 2015.

    • The rise of convenience stores is completely changing the retail landscape, especially in Western Europe where convenience retailing sales are expected to rise more than 5% a year.

    Both models by respectively offering attractive prices and possibility to buy 24/7 give the customer full power to decide where, what and when to buy, which is the biggest trend to notice.

    Although on-line retail is slowly becoming a necessity to all retailers, it faces a challenge of having substantial logistics to ensure satisfaction of the consumer. Having a superb product with a right price is simply not enough. A lot of emphasis needs to be put on a delivery at the right way, time and especially cost.

    Although e-commerce is widely discussed and cited in newspapers and business magazines it is often forgotten and misunderstood how challenging it is to do profitable business with its principles.  Large return volumes is story of its own, but also as work normally done by the consumer will need to be executed as a service, margins can be minimal or even negative for at least online grocery. In our analysis significant cost, up to 10% of the value of a shopping basket will occur in home delivery, half of it in case retailer has chosen click-and-collect as its customer promise.

    Added complexity makes it crucial to find the most cost-efficient way to serve the e-commerce supply chain inside retailer’s whole supply chain. Success is not possible, if you cannot enable a smooth transportation and collection service for the consumers. And, if a company chooses to have click & collect and parcel lockers in addition to traditional home or other delivery spot, which are the best ways to optimize the logistic system behind the scenes?

    It is clear that more and more focus needs to be put on order-picking and delivery. Also, cold chain deliveries along with fruits and vegetables face the challenge of keeping items fresh and safe to be consumed after the delivery. All in all, multi-channel approach challenges traditional logistics in a new way. It can be said consumer picked deliveries should be initiated by using 600x400 mm plastic crates to meet the requirements, whilst trying to minimize added complexity and associated costs. Right base unit will make scalability possible as volumes ramp up later on.

    An experienced, solid partner specialized in logistics can make a real difference in analyzing and streamlining the whole process. Our expertise is to find the most cost efficient processes and load carriers to provide end customer with fast delivery solutions, tracking possibilities, flexibility of collection points and cost-efficient returns.

    K.Hartwall is concentrating on developing innovative solutions to support single item order picking for consumers and for more lean Retail Logistics. Solutions scale from manual handling of crates on wheels to sophisticated adaptor pallet solutions, fitting the needs of future automation.

    Please feel free to ask us how we could be of help in finding a best possible solution for your e-commerce challenges/questions!