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The UK’s largest manufacturer of Pallet Racking, Shelving and Lockers
AN E-COMMERCE WHITE PAPERTaming the e-tail tiger
© REXfeatures
CONTENTS
Page 3
Introduction 4
Executive summary 5
Chapter one:
Evolution or Revolution 6
Rise of e-tail 7
Evolution moves to revolution 8
Customer demand drives European e-footprint 10
The ‘last mile’ impact 11
Collaboration: Key to Europe’s e-commerce success 11
Chapter two:
Market voice – industry reaction to omni-channel 12
Logistics reaction 14
Speed = Sales 15
Parcel delivery developments 16
Warehouse response 17
Chapter three:
Ports unlock key to distribution prize 18
Port centric solutions 19
Ports: Gateway to the UK’s e-tailing network 20
Expansion of port centric shore solutions 21
Chapter four:
Technology takes hold 22
Influencing consumer behavior 23
Click and collect 23
The nightmare returns 24
Retail: the throw away sector 24
Logistics and packaging respond to the click and collect challenge 25
Rise of the robot 25
Advanced automation and shelving solutions 26
Integration, integration, integration 27
Chapter five:
Spotlight on the grocery market 28
Cold facts 28
Distribution centre deployment 29
The dark art of dark stores 30
Stand and deliver – the race is on 32
Battle lines 32
Margin pressure vs delivering the promise 33
Fresh start 33
Chapter six:
Reaching out to the future 34
Complex and unplanned challenges 35
Conclusions 36
Page 4
This white paper makes interesting reading. Not just because of the
enormous opportunities that e-tailing provides across the supply
chain, but also because it is a salutary wake-up call for the industry.
I fully acknowledge that when we first started working with e-tail
customers, whether large established multinationals, small business
start-ups or SMEs, we had a lot of ground to make up developing
our e-tail offering, as did many of our traditional retail customers.
We needed to quickly understand a fast developing concept.
The e-tailing evolution is dynamic and we have witnessed change
beyond recognition during the past few years as developments in
technology and reliance on mobile devices have driven wide
reaching changes to the retail sector and its supply chain, especially
distribution. The e-tail sector won’t stand still and will demand
constant innovation, and this has been the approach that we have
adopted at Link 51, in order to support the growth in supply chain
developments that the e-tail sector demands.
INTRODUCTION FROM JOHN HALLIDAY, LINK 51 MANAGING DIRECTOR
In compiling this report we were surprised at the findings which varied dramatically on a number of levels. Our findings ranged from one respondent who freely admitted they ‘didn’t have a clue’ about e-tailing and had no knowledge or understanding of how it would impact on their business, through to established logistics providers struggling to adapt traditional practices to cope with e-fulfilment to 3PLs (third party logistics) and retail clients who have e-commerce strategies focused on their customers’ service requirements.
This lack of understanding from some logistics organisations was mirrored by other areas in the supply chain, where their only interest was essentially B2B. Those who touched on retail, not surprisingly, had a strong awareness of the e-commerce evolution and how to tackle it. The point is that all of us, across the supply chain, whether it’s the supply of automotive components, foodstuffs or white goods, need to be aware of the threats and opportunities that e-tail presents. Even so, most of the awareness is geared towards sales infrastructure, mobile and customer experience, and less so to the practicality of warehousing, distribution and stock management.
We’re experienced in designing storage systems to cater for palletised bulk storage and hand-picked items in either large volume or on a smaller scale. This approach has enabled us to deliver combined solutions for a wide variety of online retailers, fulfilment houses and traditional distribution centres, in addition to meeting port centric logistics needs and estate portfolios.
We have analysed our market and product offering, to establish what is impacting on our customers and consider how change is dictating their future. Our intention is that this report confirms the direction for those who are on the path to developing e-tailing solutions and helps those who have been on the side-lines to seize the initiative. We will be keeping a close eye on this important segment of our industry and keeping ourselves and clients updated on this exciting market. Hopefully the strategies explored in this report will help organisations who are relatively new to benefit from this paradigm shift to apply the e-tailing concept and understand how it impacts on their business.
John Halliday Managing Director, Link 51
Page 5
Taming a tiger presents many challenges and ‘Taming the e-tail tiger’
is no different. One thing is sure, e-tailing is here to stay and
ignore it at your peril. But what are the future trends? Why should
warehousing and distribution operators, 3PLs (third party logistics)
and end users need to be ahead of the game?
EXECUTIVE SUMMARY
• Dramatic developments in customer service expectations and the push for quicker fulfilment is impacting on warehouse and distribution centre design.
• Awareness and analysis of consumer behaviour by retail clients is changing the dynamics of the supply chain.
• Global supply chain and environmental considerations are defining a new geographical location for the “golden triangle” and traditional RDC strategies.
• Storage and distribution providers are having to find effective fulfilment solutions to the increasing demand for grocery, especially chilled produce.
• Demand for warehouse space is adapting to cater for ever changing needs for space, format and productivity.
• Technological developments continue to enable omni-channel marketing driving increased flexibility into the supply chain.
• Choices can be made anywhere – at point of purchase, in delivery method, in returns process – and changed tomorrow, requiring flexibility and future proofing in the supply chain.
The answer is market forces dictate the shape and speed of this dynamic sector. Second place doesn’t cut it in e-tail, and that’s why the entire supply chain needs to be fit and smart enough to gain that all important competitive edge.
Unwittingly this evolution in retail process is causing changes to the way that logistics planners think about how they work. This has ramifications on the supply chain and that runs from transhipment and port centric logistics to warehouse property and real estate configuration, through to transport hubs and delivery to the end user – and not forgetting of course the returns process. This by definition adds to costs and potentially builds in inefficiencies if unplanned in terms of systems, sorting and storage.
When mapped out this all makes absolute sense, but those who are slow to put e-tailing strategies on their ‘to-do’ list will either meet a challenge to catch up or perhaps face the ultimate penalty for being slow to keep ahead of market changes. Anticipation and planning is all part of success in business today, whether on a local or macro scale. Geographies may change and adapt, but forward thinking and innovation are the essential ingredients of a successful business.
The lesson learned from witnessing this paradigm shift in how logistics and goods are procured and delivered to the end user requires all those involved in the supply chain to keep up with the pace of change or potentially be left behind.
E-COMMERCE “Business transacted
for goods or services
by transferring data
electronically, especially
over the internet.”
M-COMMERCE “Business that is conducted
on the internet through
the use of a mobile phone
or other wireless hand
held device.”
E-TAIL “The selling of retail goods
on the internet to the
end user.”
DEFINITIONS
The technological revolution of the 1900s is still sending ripple effects through the 21st century.
Our desire to live in the present, demanding immediacy from every aspect has now resulted in the
birth of a whole new way of doing business and especially through the prism of retail. If you were
to order from a catalogue 20 years ago, you would be looking at five to 10 working days for delivery;
by 2014 next day delivery is a service most online retailers strive to provide in order to secure the
customer order. Now with online retail giant Amazon offering same day delivery to inhabitants of the
UK’s major cities on a wide selection of items, the demand for immediacy is slowly but surely being met.
It doesn’t stop there, as B2B wholesale and business operations, trade counters, building supplies and
component supply chain all increasingly answer to customers’ online orders.
EVOLUTION OR REVOLUTION
Chapter 1
Page 6
1875 1900 1925 1950 1975 2000 2014
Telephone Light BulbBallpoint Pen Television Computer Satelite Lava Lamp Microwave Floppy DiscApple
Computer
www
World Wide Web
PentiumProcessor
Video Disc iPod Facebook Twitter iPhone iPad ?
Rate of I.T. evolution
© Deutsche Post DHL
Will ‘within the hour’ deliveries by drone soon become a reality for consumes in our major cities? If so, how will this impact on the location, size and design of urban distribution hubs.
Page 7
Rise of e-tailThe retail sector has developed from having competitors only located across the street to eBay bidding wars and price comparison sites introducing clientele to international sellers.
Retailers now have 24/7 access to their consumers, tailoring offers and promotions to individual shoppers; the internet gave retailers the opportunity to cash in on this unlimited direct access. To date 28 per cent of online shoppers are choosing to subscribe to stores or product newsletters and updates to stay informed.2 Data also reveals that 28 per cent of customers who complete a purchase can be directly contacted with promotions and news, thus increasing the exposure of a brand beyond the visit to the online platform or the bricks and mortar store.
But where did all this come from? Why have we developed this passion for online shopping and the demand for receiving goods as quickly and efficiently as possible? There are many contributing factors, but the solution may be relatively simple. The increasing pace of technological developments in the hands of customers has enabled sales channels to communicate more effectively, engage more comprehensively and close more efficiently, personalising offers based on behaviour; and all this, 24/7. Commercial channels can be open all the time providing choice at every level. The infrastructure and logistical processes required to fulfil this online demand are the cornerstones of any successful venture and having a system finely tuned to this online process is integral to the operation.
Since the 2008 economic nosedive the UK has been steadily finding its feet again, with retail leading the way. Consumer confidence has been the spearhead for recovery and that fuels demand for goods.
This steady increase in online shopping is evident; for every £5 spent on non-food items, £1 is spent online.1 The birth of the internet in the early ‘90s changed the face of retail forever, as tech-savvy retailers saw the opportunity to expand their reach not only on a national but international scale. By association, logistics and storage solution firms had a new and exciting market to expand into.
FOR EVERY£5 SPENT ONNON-FOODITEMS...
£1 ISSPENT ONLINE
1875 1900 1925 1950 1975 2000 2014
Telephone Light BulbBallpoint Pen Television Computer Satelite Lava Lamp Microwave Floppy DiscApple
Computer
www
World Wide Web
PentiumProcessor
Video Disc iPod Facebook Twitter iPhone iPad ?
These new strategies mean that small retailers are no longer restricted to targeting their local patrons, but instead can distribute and ship items over a much wider geography. Retailers aren’t held back by the traditional methods of point of sales displays and back of house storage. As a result of the support provided by the distribution and logistics sector, they can conduct business from large capacity warehouses and integrated supply chains; enabling them to offer a wider range of products with a larger back-stock of items. As the sales and marketing channel delivers the logical result is an increase in frequency and volume of orders picked, packed and fulfilled by the warehouse.
To assume that the arrival of e-commerce was the result of a revolution would be a mistake. There was no loud bang or a battle for web space but rather the steady, yet unrelenting, developments to the skeletal structure of retail. Retail has demonstrably been the driving force for adoption of online strategies.
The Evolution of Retail logistics*
*Based on non food distribution in developed markets3
1970’s Direct store replenishment by suppliers or wholesalers
E-fulfilment Centre2000’s E-commmerce model involving parcel network
1990’s The rise of global sourcing
1980’s ‘CENTRALISATION’ of deliveries through retailer distribution centres
Returns
Customer home
Collection point
Delivery point
Parcel Hub
The future of e-commerce is not set in stone
Evolution moves to revolutionFrom the invention of the internet in the late ‘60s to the world wide web in the late ‘80s and the first online order in the mid ‘90s the pace of change has been steady, evolving as technologies emerged that enable the faster paced change of the last 20 years - the dawn of e-tail.
The evolution of retail has now left the sector unrecognisable from the supply chain of the 1970s:
Page 8
Overseas Supplier Shop
Shop
Overseas Supplier Shop
Overseas Supplier
Overseas Supplier
Shop
Shop
Shop
Shop
Shop
Shop
Overseas Supplier
Domestic Supplier
Retail Distribution Centre
Retail Import Retail Distribution
Delivery CentreSortation Centre
Local Depot (urban logistics)
Domestic Supplier
Domestic Supplier
Page 9
The future of e-commerce is not set in stone, with a whole host of contributing factors; economy, technology, logistics, customer service to name but a few, all impacting on the world of e-commerce; over the coming years the future is an exciting place and promises attractive opportunities for innovators. Professor of supply-chain strategy at Cranfield University School of Management, Richard Wilding, shares in the sector’s enthusiasm for this ever moving evolution.
He goes as far as suggesting that the developments that will take place in the immediate future will resemble more of a revolution rather than evolution as the pace of change increases whilst the impact of those contributing factors becomes apparent: “The next 12 months are absolutely critical. We will learn the true picture of what is actually going on. We will find out who are the winners, who are the losers, probably by about January 2015. Businesses are investing heavily in this – it is the biggest revolution in the retail industry for a generation.”
Professor Richard Wilding
“E-commerce… is the biggest revolution in the retail industry for a generation.”
© Tesco PLC
© Tesco PLC
Where next?What impact will Omni-channel have on our shopping habits in the future?
Page 10
With modern consumers becoming increasingly dependent on
instant gratification and the immediate supply of goods, the ability
to provide products to the consumer with little fuss and minimal
supplier expenditure has become paramount. More retailers are
choosing to represent their products online and as a result, the future
of e-commerce is driving businesses harder and nurturing new target
markets overseas.
CUSTOMER DEMAND DRIVES EUROPEAN E-FOOTPRINT
The Centre for Retail Research claims that: “In 2014 online retailing in Europe grew by a weighted average of 18.4 per cent to £132 billion.” On the surface these figures appear staggering but The Centre for Retail Research estimates the growth will continue at 18.4 per cent between 2014 and 2015 brining estimated expenditure to £156.67 billion for the year.4
With Europe’s spending steadily increasing over the coming years, what is the effect on the sellers?
The retail evolution has been spreading its wings steadily over recent years, helped along by the recession, driving bargain hunters in their masses to find the best deal online.
Dealing across EU borders is becoming increasingly popular and as stated by the gov.uk website, “the aim is that doing business with other EU countries should become increasingly like doing business within your own country.”5
Last year Marks & Spencer6 launched an international service delivering to parts of Europe where it currently has no physical footprint. This enabled customers in France, Germany and Spain to buy clothes and other goods from its existing website, marksandspencer.com, at a delivery cost of £10. Fashion and home wear retailer Next uses nextdirectory.eu, an English language site, to deliver across Western Europe for a charge of €5 (£3.98).
With international delivery charges now equal to a local supermarket home delivery service, increasingly more customers are willing to make cross border purchases, in order to buy the product they want.
The fundamental challenge experienced by retailers in this area is logistical; how to transport goods across borders in a consistent and collective manner? The answer is remarkable, as there are no apparent consistencies in the sector for cross border logistics. Each retailer has their own way of managing cross border logistics and in most cases these solutions are designed to fit in with each individual retailer’s margins, budgets and requirements. In the absence of a ‘one size fits all’ solution there is a broad amount of inconsistency in this area which many experts agree requires further support and assessment.
For example Amazon is more inclined to build smaller ‘sub fulfilment centres’ which manage the distribution of goods to smaller regions, rather than relying on the ‘mega fulfilment centres’.
EUROPEAN ONLINE RETAIL GREW IN 2014 TO £132 BILLION
UP18.4%
The Centre for Retail Research estimates that 2015 will bring estimated expenditure to £156.67 billion for the year.
Page 11
Other retailers favour the use of third party logistics (3PL) to distribute goods, for example UPS and FedEx who will distribute the goods as a subcontracted support network.
Outsourcing the logistical challenges that 3PL’s face, in some cases, is a cheap and effective method of managing ‘last mile’ delivery. Choosing to source and subcontract to firms who specialise only in logistics, gives the retailer the freedom to focus on the more intricate inner workings of their business; these logistics experts, who have the knowledge and facilities to manage the logistical expectations of their client, will deliver and collect items from customers and transport the goods between destinations, whilst permitting the retailer to focus on the back of house management of their business.
TOTAL ORDERS DESPATCHED BY UK RETAILERS EXPECTED TO REACH 1.3 BILLION IN 2017
The ‘last mile’ impact
The number of overseas deliveries despatched from the UK could double within three years, according to the IMRG MetaPack UK Delivery Index June 2014. 7
An expected 161 million orders posted cross-border this year may rise to 384 million in 2017 if current trends continue. The total number of orders despatched by retailers in the UK is expected to top one billion next year, and reach around 1.3 billion in 2017.8
With this volume of dispatches taking place annually across Europe, a unified approach to logistics across European borders is required. The most favourable solution to date appears to be the use of ‘sub fulfilment centres’
Collaboration: Key to Europe’s e-commerce success
where orders can be managed on a local basis using infrastructure, fulfilment centre design and practices that reflect those in the home territory for efficiency and consistency. In doing so the carbon footprint of retailers would be reduced, returns would be managed locally rather than returning products across continents to the ‘mega fulfilment centre’ and deliveries can be completed in shorter time windows which will provide a more pleasing customer experience. We will examine the returns challenge in the ‘Ports unlock key to distribution prize’ section of this white paper, from page 18.
Page 12
The UK has the world’s most developed online retail market,
according to a ranking by commercial real estate company Cushman
& Wakefield9, and the global online grocery market is set to grow by
an impressive 50 per cent from £21bn to £31bn in just two years.10
As a result of statistics such as these, there is a perception that the
internet is taking spend away from bricks and mortar stores; this,
however, “is one of the biggest misconceptions,” said Kantar Worldpanel.
“Having an online offer helps retailers to secure additional revenue.”11
MARKET VOICE – INDUSTRY REACTION TO OMNI-CHANNEL
Sebastian James, chief executive of Dixons Retail, owner of Currys and PC World, recognises the impact of retailers having both online and store propositions, as more than 80 per cent of customers use both outlets to make their decisions: Being able to research online, see and touch the product in-store, while also receiving expert advice, is hugely valuable.”12
It also allows the consumer to have the opportunity to conduct a price comparison search whilst in-store. Tina Spooner, Chief Information Officer at online retail association IMRG, revealed that 47 per cent of consumers have used their mobiles to browse a competitor’s website whilst in a store: “Much of this activity is likely to be comparing prices in order to get the best deal.”13 Competitive pricing is a strong persuader for customers to leave behind their allegiance to a brand if they can purchase an item cheaper elsewhere.
As e-tail evolves, we are now starting to see the appearance of omni-channel activity – multiple channels working in unison to provide the consumer with a seamless approach to shopping. Professor of supply-chain strategy at Cranfield University School of Management, Richard Wilding, sees development in the supply-chain sector approaching tipping point, as a result of this new wave of retailing.
“If you go back 10 or 15 years, we used to talk about multi-channel retailing. You would have had your store channel, your internet channel, most likely then warehouses, customer-service team and so on, all completely separate entities. The problem is now consumers do not think that way.
“For example, to make a purchase today, I might go into a store and choose the item to be delivered to my home, or order it on my smartphone, or use click-and-collect to fetch it myself, but then put it into the
post to return it. So what is happening for retailers is that it has to be seen as one big omni-channel, a whole customer-service offering.”14
As omni-channel grows, there is an increasing requirement for ‘back office’ support to be in the same league as its consumer facing staff and outlets. But what impact will omni-channel have on store footplates and the balance between sales floor and stock room? Will stock rooms have to cater for e-fulfilment activity as well as store sales? If so, will stock rooms need to be bigger, multi-tier and more efficient?
David McCorquodale, Head of Retail, KPMG, added: “The onus is on retailers to better connect with consumers online and deliver innovative, personalised campaigns which will capture the average shopper’s imagination and encourage them to spend online and in store.”15
Chapter 2
“Being able to research online, see and touch the product in-store, while also receiving expert advice, is hugely valuable.”
Page 13
Multi Channel Growth in Retail
Web
84%
96%
96%
Store
79%
78%
90%
Mobile
37%
41%
68%
Call Centre
44%
51%
59%
Social
30%
28%
32%
2011
2012
2013
Retail footplates are changing, with large leases failing to be renewed and smaller retail outlets are being selected as a ‘shop window’ approach, to encourage customers to purchase more products online – seen by some as a “change or die” moment.16 The impact on the use of space means that smaller storage systems are required, as the volume of stock is no longer an issue. However, the storage needs to be flexible and deliver more efficient utilisation of space in order to adapt to changing trends and demand.
Not every online sector is growing as quickly as The British Retail Consortium (BRC) and KMPG reveal. Online sales of non-food products only grew by 10.6 per cent in June, in comparison with the previous year, which is its lowest rate since July 2013; despite this, the BRC remains optimistic, as the proportion of online sales keeps increasing, referencing how distribution and logistics play a key role.
“This is due to the enhanced online shopping experience which retailers have worked hard to provide for their customers. Retailer’s sophisticated multichannel propositions are especially convenient for shoppers who do not want to brave busy stores during the summer sale season. Scale is becoming a key differentiating factor for the online market. Large retailers with a more advanced online services proposition and able to utilise efficient distribution and logistics can now offer on their website brands from other retailers who don’t have sufficient scale online,” commented Helen Dickinson, Director General, British Retail Consortium.17
Page 14
Logistics reaction It’s not just the retailers who have realised the impact of online shopping, which is driving significant change across the supply chain, but also the logistics sector. But how is it reacting to developments in e-tailing?
Logistics companies will play a key role in providing vital supply chain management solutions that are able to evolve with consumers’ changing shopping habits and the growth of online retail. Casting an eye towards its future is DHL, whose “Global E-Tailing 2025” 18 study, describes the role which electronic retailing will play in people’s lives in the year 2025, how international online retailing will change consumer behaviour, and therefore the world of retailing as a whole, and what challenges the logistics industry will then be faced with.
Jürgen Gerdes, CEO Post – e-Commerce – Parcel at Deutsche Post DHL, said: “We don’t know for certain what the world will look like in 2025, but the study’s various scenarios show how rapid the global retail sector – online and offline – is changing and that logistics will be a focal point of these change processes.”
Referring to eBay’s purchase of delivery specialist Shutl, Harry Cole, vice president business development at DHL, said: “It’s quite interesting actually, this deal is going to link up all of these last mile challenges, and final mile couriers. Within an hour of ordering in a 15 mile radius a parcel can supposedly be delivered to your house from that store - this is another dynamic that we really need to think about.”
The customer has to remain the number one priority, said Emile Naus, head of logistics strategy at Marks & Spencer. “Whether you buy from mobile, tablet, or in store, it is a customer requirement and you have to fulfil it. Some customers will value and be prepared to spend money on e-commerce, and some won’t, so you have to have that flexibility.” Naus highlights that multi-channel has a high return rate, with customers taking charge of their own supply; what he calls a “feature of online.” “The ideal solution is that if you process the return, you assess it for quality very quickly, so you can get it back in stock,” he added.
© REXfeatures
Page 15
Speed = salesThe challenge for retailers and logistics companies alike is whether to charge customers for the same day or next day service. Head of business development logistics at Europa Worldwide Logistics, Mark Wallace, said: “The issue is that we have great parcel delivery here, so people don’t want to pay added value. If customers can shop online, and choose a next day service without paying any extra costs, why wouldn’t they?”
That said, more affluent customers who shop at luxury retailers such as Fortnum & Mason are prepared to pay a substantial premium for the quicker, same-day turnaround, according to director of retail and operations, Atty Hussein. “Customers in central London in particular want products delivered to their offices now, because it’s more convenient for them.”
The speed in which online sales has affected the supply chain has left some suppliers struggling to understand and meet the needs of the digital retailing channel. Derek Eccleston, commercial director at eDigitalResearch, says: “The general feeling among big supermarkets is that FMCG suppliers do not understand the online market.”19
“The general feeling among big supermarkets is that FMCG suppliers do not understand the online market”
However, Richard Jones, IGD senior business analyst, says the online market is moving so fast that retailers are highly focused on adapting themselves “so they find it a challenge to give suppliers sufficient clarity on how to adapt”.20
People have an initial fear of online according to head of logistics at Matalan, Nigel Prescott. “Although there comes a point where you realise you need it,” he said.
“Then you have to ask yourself why. Nowadays at one end of the scale we have the market online leaders, then at the other, we have the people morphing and trying to understand what online actually means. This shows that one size does not fit all, and one model does not fit all; it depends on where you are in the marketplace, what your demographics are, and what your customer expects. To succeed in e-commerce you have to understand your own business before you get to a place you may not need to be at that point in time – it’s about creating a road map into your future.”21
© Deutsche Post DHL
Parcel delivery developments The present day is just a small chapter in the e-tailing story with new developments, research and technology appearing on a regular basis, which affects the whole supply chain, from warehouses to delivery. UK e-tail trade association IMRG and e-Commerce technology provider MetaPack’s Delivery Index reports that 920 million parcels were dispatched by e-tailers in 2014; 20 million less than previously expected (including economy specifies, time slot, click and collection).
Improving economic conditions and the continued growth of online retailing have prompted IMRG and MetaPack to revise their 2014 annual delivery volume growth figure from 12.5 per cent to between 16-19 per cent. With the continued growth in this area and increasing volumes of stock that are handled, the processes throughout the entire supply chain need to stepped up; consequently there is a huge impact on security, ease of identification and speed of selection.22
UP940
MILLIONPARCELS
920 MILLION PARCELS WERE DESPATCHED BY UK E-RETAILERS IN 2014
Page 16
Delivery Index Year on Year
250
200
150
100
50
0
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
2011/12 2012/13 2014/152013/14
© IMRG / METAPACK DELIVERY INDEX
The latest Metapak delivery index shows 2014/15 developing a recognisable trend for the year. However the January fall although slightly greater than prior year is on the back of a 9.5% growth factor.
The delivery index is ideal for displaying trend information, however it is worth noting that the dataset displays an average of 5 million parcel deliveries in any one month and covers accumulative total of 215 million parcels to date.
920 MILLION PARCELS WERE DESPATCHED BY UK E-RETAILERS IN 2014
Page 17
WAREHOUSE TAKE UP BY RETAILERS OVER NEXT 5 YEARS
ON THE LAST 5 YEARS
UP 21%
Warehouse responseSavills and Transport Intelligence commissioned research in June 2013 to analyse the online retail sector, which concluded that the replacement of the high street with warehouses and home delivery is an extreme, and unlikely, view. ‘Click and collect’ will enhance the high street and out-of-town presence; there is a symbiotic relationship with this combination, as the process evolves but the shopper experience improves and grows. One will not be able to easily exist without the other.
Overall, the warehouse will have an increasingly important role going forward within retailers’ supply chains and a requirement for smart technology and efficient storage and retrieval systems.
Savills believe that warehouse take-up, by retailers only, will total 50 million sq ft over the next five years and that is a 21 per cent increase on the take up during the past five years; 13 million sq ft, more than a quarter of this future take-up will be within e-tailing specific property and is driven by online sales and probably with large footprint fulfilment centres.
“E-tail is a process that needs to be adopted, in order to prevent being left behind whilst competitors are successfully riding its crest.”
Mega footprints and consolidation of facilities do work when combined with smart configuration of racking and inventory management. Designer bathroom specialist and a leading supplier to trade customers, Crosswater, has embraced e-tailing. Crosswater holds some 5,000 stock lines, including products from the cutting-edge Bauhaus collection of bathroom furniture, and Simpsons and Crosswater Digital showers. In July 2014, the fast-growing company moved to a new, purpose-built headquarters at The Bridges, Dartford, with 138,000 sq ft of warehousing and 10 loading docks incorporating under one roof accounts, marketing, I.T, purchasing, sales, aftersales, warehouse and transport departments, alongside the new addition of Bathroom Brands and consolidation of facilities. The operational benefits of merging five ware-houses into one means that warehouse operators can pick orders quicker and easier, which provides additional capacity, moving from 6k of pallet space to 17k.
“E-tailing will help drive a new era of demand for warehouse space... although one size will not fit all,” commented Richard Sullivan, National Head of Industrial & Logistics.23 This highlights the need for bespoke solutions, adapting the current methods to suit a future model rather than forcing a square peg into a circular hole.
“It’s important that the industry is increasingly talking about e-tailing, as it has previously been one of those areas that no one knew much about and were sceptical about how it would take off – but look at how heavily reliant we are on email nowadays and the initial reaction when it was being used in the workplace,” said Kevin Blanchard, Major Account Manager at Link 51. “E-tail is a process that needs to be adopted, in order to prevent being left behind whilst competitors are successfully riding its crest. Innovative thinking, good communication with supply chain partners and speed are the essential ingredients to becoming successful in this emerging market.”
Page 18
The integration of different storage systems to achieve the flexibility
required by e-tailers is a key factor in its success. Racking and
shelving systems combined with multi-tier capabilities work together
to maximise space efficiency without hindering pick rates and
productivity. Scalable strategies especially provide start-ups and SMEs
with the flexibility they need within their premises during the growth
phase. This is particularly important ahead of the need to invest in
new property or outsource to a mega footprint e-fulfilment specialist.
PORTS UNLOCK KEY TO DISTRIBUTION PRIZE
Distribution centre design has evolved from a ‘low and wide’ strategy to ‘narrow and high’, says TGW sales director Phil Steeds. Supply chain consultancy firm LCP recently reported that the non-food retail sector will invest heavily in automated warehousing over the next five years, as it gears towards the ‘omni-channel revolution’. As a consequence, DCs and warehouses are being reconfigured to meet increasingly complex fulfilment needs.24
For example, outdoor and leisure clothing supplier Regatta needed to upgrade its warehouse logistics to support the growth
Chapter 3
of its business, as a result in the rise of e-tailing; the company had to build a new shed in order to service both its shops and also its e-tail fulfilment, making the business more flexible to meet client demand. Regatta installed a mixed system that incorporated hand pick shelving, which was built into the traditional racking providing a solution that enables the warehouse team to handle e-tail, retail and also returns.
Whilst retail has taken a proactive lead on developing flexible omni-channel storage solutions, how have the UK’s ports responded to the revolution?
Courtesy of DP World London Gateway
Page 19
Port centric solutionsWith UK ports seeing 121 million tonnes of goods pass through our borders between January and March 2014,25 the management of the distribution would initially seem like a logistical nightmare.
There are three distinctive solutions each with their own impact on storage and handling solutions:
1 Mega e-fulfilment centres where the merchandise is stocked and picked at item level and often operate 24/7. These facilities, which are either operated by the retailer or a logistics service provider, are typically 500,000 sq ft to one million sq ft in size, or even larger. Customers typically want solutions that address the scale of the operation, but also provide the flexibility and capability in order to meet demand and effectively utilise floor and cubic space; for example, racking, automation and hand pick shelving and working across supply chain with integrators.
2. Parcel hubs/sortation centres which sort orders by zip or post code, so they can be delivered to the relevant parcel delivery centre for final delivery to the customers’ home or selected collection point. This is low impact on storage solutions.
3. Parcel delivery and click and collect centres which handle the ‘last mile’ delivery to the customer, and may require lockers cupboards and shelves, for example, which provide segregation, control and security.
Managing the receipt and distribution of goods is an area that the majority of retailers are focusing their efforts. Innovative storage and warehousing solutions are key to the effective management of warehouse goods and the efficient distribution of products to customers. With the popularity of e-tailing increasing daily, the seamless distribution of products has always been a priority for retailers. However, the challenge has grown to include complete fulfilment of the delivery of individual items to individual customers, as well as distributing bulk store stock to a high street outlet.
Courtesy of DP World London Gateway
Page 20
Third party logistics is leading to the growth of a more port centric logistics strategy and whilst some port operators have admitted to ‘being clueless on the impact of e-tailing on them and their customers’, others are ahead of the curve.26
PD Ports Group, is one operator that has grasped the nettle, and launched PD Portcentric Logistics at the 2013 Multimodal logistics event.
Port centric Logistics is an alternative to the traditional approach, which typically sees goods transported to the logistics ‘golden triangle’ (the central and southern England hub) for onward distribution, by offering customers the choice to go straight from A to B. The approach can save time, money and considerably reduce environmental im-pact and importantly dovetails with the JIT demands of e-tailing.
Geoff Lippitt, Business Development Director of PD Ports Group said: “Portcentric Logistics has very real commercial and environmental benefits. Every year, in total, our customers save millions of pounds in supply chain costs, road miles and significantly reduce their carbon emissions.
“We have a proven track record of delivering tangible results for businesses across a range of sectors, including clothes and food, adopting a port centric solution.” The Portcentric Logistics operation at Teesport has seen rapid growth in recent years, with major contracts including household names such as Asda, Tesco and Taylors of Harrogate.
Martyn Pellew, Business Consultant to the logistics sector (including those organisations specialising in infrastructure and ports) and together with the Teesport team, is seen as a pioneer of port centric logistics and has forecast the dramatic shift in the sector as e-tailing has taken off in the UK and Europe. He has witnessed the impact that e-tailing has had on the logistics sector and how RDCs were pulling away from the traditional model and moving closer to a port centric solution.
“The evolution of e-tailing is presenting a golden opportunity to redevelop logistics and fine tune its efficiency; London Gateway, Peel in Liverpool and Teesport, as already mentioned, are some who are doing just that.”
Ports: Gateway to the UK’s e-tailing network
© PD Ports
Town/City
Port
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Due to the trend of click and collect, more businesses are pulling away from RDCs located around the ‘golden triangle’ in the East Midlands and moving stockholding and order picking closer to ports, where large distribution centres are now helping to manage customer demand of wanting goods within a faster turnaround time. This saves valuable time by cutting out the traditional centrally located national import centres (the ‘middle man’) as the goods can be sorted at the port warehouse before being transported straight to the RDC.
Martyn Pellew continued: “Retailers are growing a greater range of stock and a faster stock turn than ever before. Therefore RDCs are taking up a larger share of the grocery market throughput, particularly chilled goods. The problem with the port centric model is that more ports are focused towards the electrical market rather than food, so storing and transporting chilled goods is a challenge – but also an opportunity to become more innovative and competitive.
Expansion of port centric shore solutions“The UK ports sector has done a lot of great work to tackle the complex UK planning procedures, which has attracted a lot of capital investment in infrastructure; however, more needs to be done to continue making improvements and continue the expansion of port centric solutions on our shores.”
Bernard Molloy, Global Industrial Logistics Director at Unipart Logistics and Chair of Liverpool City Region SUPERPORT Committee, also agrees that now is the time to create a new UK logistics strategy, commenting: “As the pace of growth in the UK and global economies quicken, retailers and manufacturers will need to review the structure of their domestic and international logistics operations to keep up with increased demand. Expanding capacity and delivering value to customers in a competitive market, that is conscious of cost and carbon usage, will make port centric logistics and the direct import and export of goods through Northern ports (such as Liverpool’s SUPERPORT), a strategic imperative.
“Port Centric Logistics has started to gather pace as a supply chain strategy, and a growing number of retailers and manufacturers are now looking to store goods and undertake logistics activities close to the port of entry.
“Potential for Liverpool’s SUPERPORT and port centric logistics activities looks set for a bright future. If nearly 20 million people can be reached more directly from Liverpool, why take any other route? The port has access to a potential five million sq ft of warehousing and there is a raft of large development sites close by. Access to 10 motorways within 10 miles combined with a closely integrated rail network and the new port near completion, sea, rail and road are easily brought together in tri-modal facilities that can reach out across the country. Being located near a port that facilitates the fast international movement of part completed and finished product will become increasingly important.”
Town/City
Port
Traditional Model
Portcentric Model
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TECHNOLOGY TAKES HOLD
PURCHASE VIA MOBILES HAS DOUBLED AND 4 OUT OF 5 MOBILE ORDERS ARE VIA TABLETS
20122013
Chapter 4
2013 was declared the Year of the Mobile27 and with the advent of
4G and faster connections, purchases made via mobile devices, such
as smart phones or tablets, doubled between December 2012 and
December 2013. In addition, more than two thirds (68 per cent) of
4G users feel that faster access to the Internet encourages them to
make more purchases from their smartphone, according to the latest
consumer research from IMRG and Voice of the Customer specialist
eDigitalResearch.28
But ‘being mobile’ hasn’t just affected customers. The consumer’s ability to make purchases on the move is an attractive opportunity for businesses; despite thousands or even millions of new apps being created each year, analysts’ estimate the number of app downloads in 2013 range from 56 to 82 billion and by 2017, there could be 200 billion downloads29 . However, IMRG/
Tina Spooner, Chief Information Officer at IMRG, said: “With over half of 4G users having shopped via their smartphones, compared with around a third of their 3G counterparts, it is clear that faster access brings a higher level of customer engagement via mobile. During the mid-2000s we saw a similar trend in overall e-retail, when the adoption of faster broadband connections resulted in a surge in online sales.
“Mobile has become an integral part of the online shopping journey, with a third of UK e-retail sales now coming via smartphone and tablet devices. Although tablets currently account for the lion’s share of m-retail, as 4G adoption increases and more users sign up to high-speed mobile internet services, there is little doubt we will see an increasing number of consumers shopping on the move.”
As a result, the impact on retailers and the supply chain will witness a growing need to know where stock is or isn’t located, how and when to replenish, and at what cost.
With online spending continuing to gain in popularity, the trend highlights the importance of having the capability to manage online purchases on a retail, storage and logistical scale.
eDigitalResearch research revealed that just 2 per cent of smartphone owners state that mobile sites or apps are their first port of call when they shop and browse, compared to 11 per cent of 4G users who said the same. Whilst this isn’t a particularly high number, it still accounts for a tenth of customer share, which is important not to ignore.
Year on Year Growth Table:Total e-Retail & e-Retail excluding mobile
20%
15%
10%
5%
0%
-5%
YO
Y G
row
th
Q1
2011
/12
Q2
2011
/12
Q3
2011
/12
Q4
2011
/12
Q1
2012
/13
Q2
2012
/13
Q3
2012
/13
Q4
2012
/13
Q1
2013
/14
Q2
2013
/14
Total E-Retail E-Retail Excluding Mobile
© IMRG
Page 23
The retail sector has become an expert in influencing purchasing decisions, including product placement in prominent displays to attract shoppers’ attention, price interventions, music selection and different scents’ selection.
A recent study funded by the Department of Health Policy Research Programme and carried out mainly by Cambridge University and East Anglia University has found that an estimated 30 per cent of supermarket sales come from aisle-ends and placing beverages in end-of-aisle locations uplifts sales sharply. If
COLLECTCLICK &
BY THE END OF THIS YEAR 65,000 EBAY SELLERS ARE EXPECTED TO OFFER ITEMS FOR COLLECTION AT ARGOS
Click and collectIf 2013 was the Year of the Mobile, then 2014 is the Year of ‘click and collect’. Click and collect is often the first step into e-commerce for established retailers and so they need to review their logistics, distribution and technology to support them in the delivery of this service. Tanya Lawler, the UK vice-president of eBay, said: “Retail has changed and shoppers are in the driving seat like never before. They want to shop anytime, anywhere, on any device, and British shoppers love to click and collect.”
Argos and Collect+ are examples of this evolution with both companies boasting a network of more than 5,500 local stores in the UK, “open ‘til late”. Argos extends an eBay tie-up to bring click and collect service to 650 stores and by the end of this year, around 65,000 eBay sellers are expected to offer items for collection at Argos, rising to 80,000 in 2015.
The online company has joined this growing retail phenomenon, through its partnership with Argos to enable online shoppers to collect goods at 650 stores.30 An article in the Guardian suggests that some see this idea as the “potential saviour of the high street, as it connects the fast-growing online shopping world with physical stores.”31 It has grown by such an extent, that more than half of British shoppers have now collected online orders from a store or another convenient location.
Many retailers are following suit, with collection lockers being deployed across the country. Amazon has plans to trial online shopping pick-up lockers in two London Underground car parks, which has already been tested by Asda, Tesco and Waitrose.
Network Rail has also recognised the potential to generate extra income, as it has set up a joint venture with Travelex founder Lloyd Dorfman to invest £24m in 300 Doddle pick-up-points at rail stations.
This requires secure storage and management of parcels, receipts, labels and scans, which adds to the cost and potential complications if the systems don’t work in harmony together. Organisation, efficiency and technology are imperative here.
Like e-tailing, click and collect began life at a slow pace, but is now enabling retailers to sprint ahead of the competition and according to Retail Week magazine, is “the most innovative period in the sector’s history.”32
Even though home deliveries are the preferred option by consumers, it is actually fundamentally inconvenient. “They want home delivery but if it’s not on their terms they will find a different fulfilment solution to fit their schedules,” maintains Neil Ashworth, chief executive of convenience store collection network Collect+. “With click and collect, the customer is in control.”
Collect+ sends follow-up emails to customers asking for feedback on their experience, which results in 10,000 to 15,000 replies per week; the collection business drops stores if they do not address negative feedback. The pick-up partners of Collect+ include BP garages, Co-op stores and a multitude of smaller retail outlets, all of whom need to consider product and parcel segregation, and security in the delivery of their service. Shelving kits, cupboards and lockers present ideal storage solutions especially where space is limited.
David Robinson, chief operating officer of Argos, said: “Fulfilment is the next retail battleground and Argos’s unique model is well placed to leverage this.”
product placement affects purchasing choices in a retail outlet, then it’s not surprising that this is also replicated in the online marketplace.
In its latest flagship report, “Food Processors Challenged by Online Growth Dynamics,” Rabobank, a global leader in Food and Agri financing, explores how new technology allows retailers to control what customers see. “In this algorithm-controlled world, retailers can steer customers in a certain ‘ordering direction’ with tailor-made promotions and substitutions based on
browsing or buying history, similar customer profiles, and standard shopping patterns (e.g. birthday parties).
“While this can benefit consumers, there are multiple incentives for a retailer to persuade a customer to change products too, which may lead to concerns around transparency and privacy online.” By influencing online decision making, it’s not surprising that e-commerce has had to create more innovative ways to make their service, what Rabobank describes as “online-proof”.
Influencing consumer behaviour
Page 24
But a new challenge has arisen; returns and reverse logistics. The way in which consumers return their unwanted goods has for too long played second fiddle to the distribution side of e-commerce. Some companies even go as far as claiming that their biggest ‘supplier’ of goods is their returns department. The rate in which customers are returning unwanted goods is now higher than the frequency that retailers are receiving new products from their suppliers. Inventory management and the maximisation of value have become an increasingly large bone of contention for many online retailers.
The problems surrounding returns can often take a back seat while outbound sales and logistics take the wheel. Where many retailers are struggling to manage is in the ‘Reverse Logistics’ of their business, which often results in loss and misrepresentation of stock; items that bought online can be returned to store stock, rather than back to the distribution centre. Consequently, the shop’s IT systems and delivery or collection logistics need to factor this in, as naturally there will be cost implications.
The nightmare returns
‘Throw-away society’ is an ugly term commonly used in reference to our society’s willingness to disregard food, clothing, technology and other products to the scrap heap when its purpose has come to an end. Now a new group of contributors to the pile of disregarded products is emerging.
Retail is dramatically becoming the ‘Throw-away Sector’, as an increasing amount of retailers are choosing to refund a customer the full amount for their online purchase, but do not wish to receive the product back as it poses a long list of reverse logistical issues that many retailers are unwilling to tackle for various reasons. The cost of postage, couriers, handling and sourcing a final destination for the product in many cases outweighs the cost of the item. In providing this ‘goodwill gesture’
Retail: The throw-away sector
“Where many retailers are struggling to manage is in the ‘Reverse Logistics’ of their business, this often results in loss and misrepresentation of stock”
the retailer is then making efforts to guarantee the repeat business of customers and maintaining their sales.
A recent study conducted by MICROS retail technology experts found that 50 per cent of the 217 retailers they reviewed had a shop front that permitted consumers to return unwanted goods directly to the store.33 This eases the demand for logistical solutions as many customers are inclined to return items directly to the physical store of the retailer. Alongside this is the challenge of shipping the item back to the manufacturer or identifying a solution for the final destination of the product, as it will eventually be placed on the shop floor for other customers to buy in the same way the majority of returns are purchased and returned to bricks and mortar stores.
StockScrap/Return storeWeb Sales
Supplier
DC / E-fulfilment CentreStore
DC / E-fulfilment Centre
Store
Drop Off
Post
Courier
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Logistics professionals are also becoming even more focused on fulfilment, in order to keep up with increasing consumer demand.
Tim Allison, logistics director of Dixons, has overseen the evolution of the electrical retailer’s entire supply chain to focus on offering true multi-channel fulfilment over the last four years. He highlights that the real challenge is in balancing the demands of joining up those channels and keeping stock flowing, without bloating the supply chain: “Meeting that demand, without increasing stock.”
Michael Kliger, eBay Enterprise’s managing director EMEA, believes that a more refined approach to click and collect could have even more potential, for example in the burgeoning convenience sector. “Another way retailers can get ahead is by realising the full potential of click and collect convenience. By making in-store inventory available for click and collect, they could fulfil orders not just same day but within a two hour window. Although the UK is a world leader for click and collect, few brands are currently servicing it in this way despite its benefits in terms of customer experience and brand loyalty.”
Whilst the logistics sector has significant issues to overcome, it recognises the need to tackle these challenges head on; using responsiveness is a key weapon.
Seth Pacha, global inventory management solutions manager for Neovia Logistics, commented: “By processing returns, inventory is returned to the global pool of resources and is allowed to move throughout the supply chain to the appropriate area still requiring that demand. Significant savings in inventory and purchasing exist by allowing recognition of this supply stream.”
The logistics sector isn’t naive about its position in the e-tailing market, particularly compared to other key players along the supply chain, but believes there is still plenty of work to be done.
Logistics and packaging respond to the click and collect challenge
Paul Young, head of DHL’s packaging services, said: “The packaging industry really hasn’t moved on much in the last 20 or even 30 years. We need to take notice of what today’s savvy consumer is concerned about, and that includes less waste.
“I am really concerned about the emergence of e-tailing and how this is affecting packaging. Increasingly, more and more retailers are selling more and more products over the internet. Little thought is given into how they should be packaged. This is clearly impacting on efficiency, but more worryingly we are seeing potentially harmful situations where liquids and solvents are being packaged into re-used cardboard boxes with little or no thought given to protection or barriers to prevent damage or leakages.”
Packaging is an essential stage in the e-tail supply chain, as products are handled so often and/or shipped in order to reduce the cost of delivery; correctly packaged goods help prevent damage and stock loss, therefore reducing additional costs to replace stolen stock.
Rise of the robotOnline sales fulfilment has a different profile to retail distribution logistics, as single item picking occurs more frequently than more efficient batch picking. Not only that but the short picking window as a result of next-day delivery and late order cut-off times mean that picking accuracy is crucial to the success of the operation, which must also be able to handle a high level of returns, particularly with fashion goods.
Consequently, to help with the quicker turnaround, warehouse bosses have been looking at alternative technologies, particularly the increasing deployment of robotics.
Perhaps the most eye-opening technology to be developed at Ocado, by teams at both Hatfield in Hertfordshire and in Krakow in Poland, are the “vision” systems that the company intends to apply to robotics.34
“Many applications of robotics, in terms of ‘statics’ or b-axis robots, are often quite learnt or repeatable actions, whether that’s stacking trays of lasagne or picking items off of a moving conveyor belt and putting them into an empty box. It does the same thing each time,” says Ocado’s technology director, Paul Clarke.
It also potentially leads the company into the realm of driverless technology and the possibility that driverless delivery vehicles won’t be far behind.
“The commercial applications of such technology are huge – not only from a cost point of view, but from a safety point of view,” says Clarke.
“Although the UK is a world leader for click-&-collect, few brands are currently servicing it in this way despite its benefits in terms of customer experience and brand loyalty.”
© Drew Kelly@WIRED
Automated handling systems allow cost-effective picking of smaller loads, such as cases, totes or single items, which can help to meet the logistics needs of e-tail. For example, a home delivery tote can be taken from a larger tote in order to make the distribution process much faster.
The returns process also benefits from an automated system, which ensures that returned goods are integrated back into the main stock, but the system knows its exact location to prepare for another customer purchase. Automation, such as pick-by-voice or pick-by-light technology, improves picking accuracy and therefore minimises the number of returns in the first place.
Toby Paxton, multichannel supply chain lead partner at Deloitte UK, said: “There is a growing reliance on the use of technology to support and drive the desired operational efficiency. Improvements in both the available software, such as voice picking and resource scheduling, and the scanning hardware has enable retailers to drive operational effectiveness and productivity in a conventional warehouse or retail outlet.”35
Shelving solutions need to be flexible in order to keep up with the development of technology and products, which vary in size as new technologies are created. This also affects the automated systems, as they too need to be robust enough to handle goods of different sizes and weights.
Shuttle racking is ideal for high density storage in warehouses. The remote- controlled shuttles carry palletised goods in and out of deep storage lanes, leaving operators free to perform other tasks.
For example, the Link 51 shuttle storage system stores pallets within a system that can operate to greater depths than conventional storage systems. Dagan Hyde, Commercial Design Manager at Link 51, explains: “The racking features rails that run the depth of the rack structure on which an automated shuttle travels. The shuttle is loaded into the lane and then pallets are loaded onto a shuttle at the front of the lane, which transports the pallet down to the other end; this function is repeated until the lane is full. The one shuttle is moved by a conventional fork lift truck to service the storage lanes required. Lanes can be used as first in, first out or even both. Multiple shuttles can be used within an installation at any one time.
“The in-built sensors on the shuttle are able to detect the position of pallets in the lane and place the new load at a predetermined distance from them, before returning to the start face, which can allow for load overhang that would cause problems with other dynamic systems. The shuttle movements are controlled via radio hand set, which allows the forklift truck and driver to be released for other tasks while the shuttle operates.”
Other automated solutions include pallet rollers, high speed lifts and pallet racking, which need to be flexible in order to meet the key performance indicators (KPIs) of the business and encourage growth in this new area.
Automated material handling systems from KNAPP UK at John Lewis’s flagship distribution centre at Magna Park, Milton Keynes, have played a significant role in facilitating the growth in the company’s online business. The design of the handling system was complex due to a number of factors, such as the need for flexibility for growth, the required distribution strategy of ‘little and often’ replenishment and the specific delivery needs of the company’s 28 department stores and four John Lewis at home shops. 36
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Advanced automation and shelving solutions
© REXfeatures
Page 27
Integration, integration, integrationThe key to a successful operation is integration; combining the expertise and knowledge from some of the industry’s key players. For example, Matalan worked with integrators Dematic and KNAPP, to create an efficient storage solution for its homeware and garments.
Integrator Dematic’s UK Director Stuart Stables says that the business is gaining market share in existing segments and is benefitting from the growth in e-commerce, heightened consumer demands for rapid order delivery, and the push by companies to invest in more automated technologies to drive down costs and improve efficiencies.
Stables told delegates at a company conference that “e-commerce is probably the most obvious trend driving business for us and the industry.” Stables further commented that e-tailing is “requiring new approaches to customer fulfilment by many companies. “Dematic is capitalising on a push by companies to prepare for “omnichannel distribution,” where customers are served from traditional brick-and-mortar store inventory as well as from online fulfilment through a single channel, Stables said.
The solution set for multichannel distribution operations are centred on flexible modules that scale to changing operational needs and growth. Most designs incorporate a storage buffer strategy that shares inventory across multiple distribution channels. Furthermore, these solutions have peak capacity flexibility built in to accommodate seasonal, promotional and weekend pooled order surges.
Explains Craig Rollason, Head of Sales and Marketing for KNAPP UK: “A major challenge for KNAPP was the fact that we needed to provide store-friendly deliveries, despite the fact that every John Lewis shop is laid out differently. Within John Lewis, shop layout has always been the preserve of the branch managing director. In addition, the differing distribution needs of the retail shops and johnlewis.com had to be accommodated under one roof.” 37
The popularity of automated handling systems has grown to such an extent that by the end of 2014, there will be 10,000 robots operating in Amazon’s warehouses helping to process online orders more efficiently, according to CEO Jeff Bezos who revealed the scheme during a shareholder meeting. However, robots aren’t entirely new for Amazon, as there are already some 1,300 in operation across its distribution centres. The technology was created by Kiva Systems,
a company Amazon purchased for $775 million in 2012.
Elsewhere in the growing e-tailing segment, internet and multi-channel retailers or wholesalers can increase order accuracy, order processing speed, and worker ergonomics by implementing modern picking solutions. For example, goods to person configurations are compact; these solutions go up, not out and use 40% - 70% less floor space than other methods, which means warehouses can stage inventories closer to the replenishment and pick stations, thereby increasing productivity and order processing speed. The system utilises random slotting; pick faces are eliminated. Therefore, the ongoing slotting and re-slotting of the pick faces or shelving racks to accommodate SKU velocity is omitted. Inventory is secure in a controlled access environment, not susceptible to shrinkage, dust, becoming misplaced or damaged.
© REXfeatures
SPOTLIGHT ON THE GROCERY MARKET
Chapter 5
Cold factsThe UK grocery market was worth £174.5 billion in the year to April
2014, an increase of 2.8 per cent on 2013; £7.7bn came from Internet
orders, placed at grocers and online food specialists for home
delivery and customer collection.38 Retailers, distributors and logistics
specialists are having to take the growing popularity of online
grocery shopping more seriously than ever before; online grocery
spend is predicted to double over the next five years and sales are
expected to reach £8.4bn this year in the UK, which is still less than
5 per cent of total grocery spending in Britain. 39
The ultra-competitive nature of the sector has led to well-reported grocery price wars, focused on cost and quality. “Competitive pricing among the big grocers and deflation in the price of staple items such as vegetables, milk and bread has driven inflation down yet again”, said Kantar Worldpanel director Edward Garner, in remarks reported by The Grocer. “This naturally impacts on the overall growth of the grocery market, which has fallen to a 10-year record low of 0.8%,” he added.
He also noted the different strategies being employed by Asda and Waitrose to achieve growth, with the former focused on keeping prices on everyday essential items low, the latter running competitive offers on home delivery alongside offers for myWaitrose card users.
According to a report by JLL (‘E-commerce boom triggers transformation in retail logistics’), e-commerce models vary for online groceries. “While pure-play retailers have set up dedicated distribution facilities to fulfil orders, multi-channel retailers have a variety of fulfilment options, including picking from their stores, using existing distribution centres, opening dedicated e-fulfilment centres or utilising a combination of these depending on the density of customer orders.” 40
Whilst online grocery sales are a small percentage of overall grocery spending, JLL predicts it will grow: “We believe the next shift in online food retail will see an expansion of dedicated multi-temperature e-fulfilment centres from both pure-play and multi-channel retailers, focused
around major population centres. In our opinion, multi-channel retailers will switch from picking orders from stores to picking from e-fulfilment centres (sometimes referred to as dot.com centres), in areas where sales densities justify this.”
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Grocery Market Size
200
180
160
140
120
100
80
60
40
20
0
£b
n
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
YO
Y G
row
th (
%)
120.0 124.6 128.7 133.6 139.2 146.0152.2 157.3 163.2
169.7 174.5
3.6% 3.8%3.3%
3.8%4.2%
4.9%4.3%
3.3% 3.8% 3.7%
2.8%
© Ocado
Other Retailers£9.4bn
Online £7.7bnDiscounters
£10.8bn
Convenience Stores
£37.4bn
Small Supermarkets
£35.5bn
Hypermarkets and Superstores
£73.7bn
Sales 2014: £174.5bn
Page 29
“Although it’s up to our customers to store it once it gets to their office, we have to get it there”
UK ONLINE GROCERY SALES TO DOUBLE OVER THE NEXT 5 YEARS
Distribution centre deployment
As online grocery sales increase, the logistics support has had to step up in order to meet demand. For example, Tesco’s Livingston distribution centre (DC) is now the company’s only composite site holding both fresh and ambient products. “For larger stores in high density areas it makes no sense. For our convenience stores we also try to send fresh and grocery deliveries separately. But where there are delivery restrictions, some stores do get multi-temperature deliveries,” commented Steve Strachota, Tesco distribution director.
As reported in Motor Transport magazine, Tesco also has a national frozen DC in Daventry run by DHL Supply Chain and frozen foods are also stored at the Doncaster and Livingston DCs.
“Frozen products are trunked to the fresh sites and sent to the stores in multi-temperature drops,” says Strachota. “Less than a quarter of Tesco volumes are frozen.
“For our Express stores, frozen is a challenge. We need innovation here such as CO2 cooled containers to find different ways to provide frozen food to the stores. Frozen is becomes seasonal now – we do more fresh at Christmas for example.”
The complexity of different temperature regimes for fresh food can be a problem, but it’s a challenge that has the responsibility of a number of different players: retailers, storage, logistics and also the consumer. As Fortnum & Mason’s director of retail and operations, Atty Hussein, highlights: “Although it’s up to our customers to store it once it gets to their office, we have to get it there.
“Due to the range of the hampers we offer, we also have to look at how we’re going to store them, and how much space they get in the van. We are also getting a lot of customers using click and collect, but this has prompted high returns, so there’s a bad side to it, which the DC has to deal with, and is an added cost to us.”
Hussein said Fortnum & Mason has looked into such services for events, such as its summer service, Butler In The Park, where it delivers to any of the royal parks.
“We’ve looked into it for outdoor events where we might not find the customer; could we deliver to a locker and the customer picks it up straight away? The problem is it would have to be a chilled and branded locker, which is an additional cost and considering it would only be seasonal, it’s something we’d have to think hard about.”41
Online grocery is an area to watch, particularly with the emergence of AmazonFresh hitting the US, which is already combining deliveries of groceries and non-food orders in a few cities like its hometown Seattle. How the industry delivers to the last mile will also continue to be a challenge, not only for the e-tailers, but also for the click and collect customer, as they need to find a storage solution once they have received the goods to their office or other location. With the emergence of lockers at tube stations, it will be interesting to see whether a growth in ‘cold’ lockers will be nurtured as a result of the rise in office deliveries.
Dark stores are distribution centres designed much like a classic retail
outlet whose sole purpose is for the distribution of online orders.
Rather than having staff members pick from the supermarkets that
the general public visit, supermarket chains now are favouring
the option of having dark stores purpose built to manage these
demands.
THE DARK ART OF DARK STORES
Dark stores are purpose built or developed warehouses, similar to traditional supermarkets, but the people found inside are employees, known as pickers. Wrapped in large coats and scarfs against the state of the art refrigeration systems, these pickers are charged with the task of fulfilling delivery and click and collect orders placed by the consumer.
One of the UK’s flagship dark stores is Tesco’s new build in Erith, South East London. Capable of processing 4,000 orders a day with access to 30,000 products, this is twice as many as a normal store open to the customer.42 The ability to fulfil large quantities of orders on a daily basis, not only for delivery but for click and collect services which are becoming increasingly favoured by shoppers, expands the company’s business and increases productivity, due to the absence of customers and points of sale.
With these dark stores retailers are able to relieve the pressure that would be placed on a store open to the consumer. With staff able to navigate the dark store freely without disruption, they’re can function at a higher pace and have access to larger stock. Further to this, the dark store is open all year round. Dedicated to fulfilling only online orders, the dark stores are able to manage stock levels more accurately and maintain a higher level of back stock.
In June 2011, 22 per cent of UK consumers confirmed they had purchased groceries over the internet; three years later in 2014 that figure has risen to 27 per cent of consumers.43 This steady growth signifies the increase of food purchases online and as a result how retailers must accommodate this. In utilising the dark store option to maximise the management of order fulfilment, retailers are viewing to expand.
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“The global online grocery market is set to grow around 50 per cent from £21bn to £31bn in just two years”
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THE NUMBER OF CONSUMERS WHO HAD ORDERED GROCERIES ONLINE ROSE FROM 22% TO 27% IN JUST 3 YEARS
To do this the infrastructure of a dark store must be managed and constructed to the specifications of the retailer to optimise this fulfilment schedule. Logistics must be managed accurately and with the sufficient technology to guarantee the consumer receives their goods in a timely and unspoilt fashion. Finding the most suitable way to construct these dark stores is imperative to the smooth running of a centre designed to facilitate 4,000 orders a day.
Despite slow and steady growth to-date the global online grocery market is set to grow around 50 per cent from £21bn to £31bn in just two years, as consumers continue to embrace internet shopping.44
“The weekly shop can take as little as 15 minutes”
Research also indicates that customers are spending on average five times as much as they would in-store.45 The convenience of home delivery means customers are more inclined to make bulk purchases of large or heavy items that can be delivered directly to their homes.
Furthermore the benefit of having regular shopping lists retained by the chosen supermarket website means that when customers log on to make their purchase, only minor adjustments need to be made and as a result doing the weekly shop can take as little as 15 minutes.
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The fight for consumers continues as big retailers take a calculated hit to margins to invest in online
grocery operations. In part this is prompted by the hope they can persuade consumers to add more
profitable items like clothes and computers to their orders of fruit and vegetables.
STAND AND DELIVER – THE RACE IS ON
Food has been one of the last things to move online because complex logistics for fresh, chilled and frozen products make it an expensive business. Retailers are also reluctant to lose the potential for the lucrative impulse buys that occur in-store.
However, retailers in Europe and North America are now ramping up their online food offer to compete with Amazon, which is expected to expand its sale of fresh produce beyond a few trial areas with the aim of complementing its non-food sales - and eating other retailers’ lunch.
“They are trying to hook customers up to brands for their grocery shop and hope they will spend on non-food which is lower
Battle linesIt has taken Tesco, Europe’s second biggest retailer, 17 years to bring its online grocery business close to the industry-leading margins it used to make in its store business.
Some analysts suggest that Tesco should focus less on investment in costly e-commerce technology and logistics and more on cutting prices if it wants to stop losing market share in Britain to German discounters Aldi and Lidl.
But Tesco says it is not building its online business for the sake of it: The aim rather is to attract more big-spending food shoppers who also buy general goods, which traditionally sell at much higher margins than groceries. In the light of continuing dips in market share and the
headache and higher margin, which will drive profitability,” said Sophie Albizua of retail consultancy eNova Partnership.
“It is notoriously difficult to make money selling groceries online. The reason why people do it and need to do it have nothing to do with profit and nothing to do with groceries.”
Britain has led the way in selling groceries online, with e-commerce already accounting for some 5 per cent of food sales. Other countries like France are now catching up and the Boston Consulting Group (BCG) predicts the global market will grow to $100 billion by 2018 from $36 billion in 2013.
dramatic turnaround on customer loyalty, grocery brands will increasingly look to smart logistics to help provide solutions and defend market share.
Tesco, which still runs separate operations for online groceries and general merchandise, plans to combine its grocery and general goods deliveries - leveraging the sophisticated logistics network it has built up for food to cut costs for the company, and offer customers a faster service.
The one-hour delivery slots that Tesco offers seven days a week for grocery orders are unmatched by any other general merchandise retailer, including Amazon, points out Tesco multichannel director Robin Terrell.
“As we start to add additional items or additional products to each of those deliveries, the economics become incredibly compelling for us but also a much more compelling offer for customers,” Terrell said.
It’s a service that would make customers take notice, said Helen Merriot, head of consultancy Accenture’s retail practice in Britain.
“If they could combine food and non-food and do that in a really efficient way, using their own supply chain in a joined-up way to get that to the customer when the customer wants it, it would be really powerful,” commented Merriot.
© 2015 GeekWire,
LLC
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Margin pressure vs delivering the promiseBritish retailer Ocado, on track to make its first annual pretax profit this year since it was founded in 2000, set up an online pet store last year from which customers now order goods alongside their food, and plans a kitchen and homeware online store later this year.
Ocado said last week over 30 per cent of its orders now contain at least one non-food item as customers benefit from the convenience of the firm’s one-hour delivery slots.
Deutsche Bank analysts Niamh McSherry and James Collins predict that general merchandise will grow to 9 per cent of Ocado’s sales by 2023 from about 3 per cent today.
“This is key for the Ocado investment case, namely because it could support the profitability of grocery online retailing and thereby facilitate further penetration of the grocery market,” they wrote in a note.
Dutch retailer Ahold, which runs U.S. online grocer Peapod as well as sites for groceries and general goods in the Netherlands and Belgium, is another that plans to keep investing in e-commerce despite the hit to profitability.
In the first quarter, online sales for all Ahold’s e-commerce sites grew 20 per cent to €362 million ($493.79 million), while the group’s underlying operating margin slipped to 4 per cent from 4.1 per cent a year ago. Its online grocery businesses have yet to break-even but its Bol.com general merchandise site made an unspecified profit in 2013.
Ahold is using its network of supermarkets as pick-up points for non-food online orders from sister firm Bol.com in the same way that Waitrose in Britain does with partner John Lewis.
Britain’s Asda is also investing in collection points, including in car parks of London tube stations, garnering useful information for its owner Wal-Mart, which is testing online grocery in its home market as part of a bigger plan to integrate e-commerce into its sprawling network of stores.
The world’s biggest retailer, which made more than $10 billion in e-commerce sales of non-food items last year, warns that investment in online will eat into profits this year.
Fresh startMost of these traditional players are hoping to have established a bulkhead before Amazon expands its “Fresh” service, which is already combining deliveries of groceries and non-food orders in a few trial U.S. cities like its hometown Seattle.
In areas where AmazonFresh is available, trucks are bundling orders of groceries with a pasta meal or fresh fish from local specialty stores Amazon is partnering with, as well as non-food items like digital cameras and video games.
“Customers who are using our service are not just satisfying one shopping occasion but many shopping occasions,” Doug Herrington, Amazon vice president consumables, told the Consumer Goods Forum industry summit in Paris last month.
Bernstein Research predicts that AmazonFresh could generate an operating margin as high as 13 per cent in denser urban areas once it overcomes logistical challenges to reach scale.
“A roll out of Fresh could have a material positive impact on order frequency, loyalty, and spend in other non-grocery related categories,” Bernstein analysts wrote in a recent report.
Amazon’s Herrington expects the pace of delivery will be his future battleground.
“We have yet to find customers who are begging us for slower delivery,” he said. “They are going to demand a shorter and shorter window from when you purchase it to when it arrives in your home.”
Chilled Ambient
E-tail naturally comes with multiple logistical challenges.
Customers quite often only purchase one item instead of a batch
and they cannot choose another item themselves if that product
isn’t available. There are shorter picking windows of next-day
delivery or late orders that can cause problems and online purchases
can increase the return-rate of goods, particularly fashion items, as
customers buy clothing in bulk in different sizes to try on at home.
REACHING OUT TO THE FUTURE
Chapter 6
Automated handling systems are proving highly capable of meeting the logistics needs of e-tail; for both sales and returns. As Warehouse News’ special report on ‘Automation for e-commerce’ explains:
“The latest technology allows cost-effective picking of smaller unit loads, such as cases, totes or single items – and can facilitate the picking, sequencing and dispatch of orders in various load types within multichannel distribution centres. Computer control of the picking process allows automated solutions to secure the economies of batch picking for single item picking; for example, a pick-by-light solution can enable the picking of several items from a tote and the allocation of them to several target totes, each representing a home delivery.
“When it comes to returns, an automated system ensures that returned goods are immediately available for current orders. In addition, automation negates the need for returns to be reintegrated into the main stock, as the WMS knows exactly where they are located. Of course, automation; such as pick-by-voice or pick-by-light technology, improves picking accuracy and thereby minimises the number of returns in the first place.”46
A Savills report agrees on the important role that returns play to e-tailing: “Dealing with returns is key for all aspects of the supply chain. Minimising costs, waste and maintaining customer satisfaction all need to be considered simultaneously. Logistic providers will support this function, but will require appropriate warehouses, including location and specification.
“The large retailers and logistic providers will continue to drive the market, in terms of the demand for retail-related distribution warehouses. However, the niche logistic providers need to be monitored by the property industry. Savills have also reviewed, and researched, those retailers that are expected to drive the market going forward.”47
James Surridge, editor of Warehouse & Logistics News, believes that automated warehouse handling has a future: “The fact remains, however, that many large distribution centres use an army of order pickers burning shoe leather as they typically walk up to 11 miles a day picking products, albeit helped often by a voice picking systems to ensure accurate and faster picking. Clearly, automated warehouse handling has a bright future.”48
Despite this, large players such as Amazon commonly use flexible hand pick storage solutions for its warehouses, featuring a mix of barcodes and human selection, in order to allow for a quicker turnaround. Amazon’s products are stored at random but tagged with barcodes that are scanned
“Dealing with returns is key for all aspects of the supply chain… The large retailers and logistic providers will continue to drive the market, in terms of the demand for retail-related distribution”
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at each stage of the ordering, selection and shipping process. Whilst technology may reign for most of the industry, it seems the more traditional methods are continue to be a popular part of the assembly line.
© Swisslog
Complex and unplanned challenges
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But this isn’t where the challenges end, as outside of the e-commerce arena is the supply chain network that supports the entire operation. From direct store or home deliveries; port receptions; regional cross-dock consolidation centres, national import centres; national distribution centres; and e-fulfilment centres; the logistics sector plays a central role in transporting and delivering goods from overseas and across the country – and the combination of different storage systems and technologies are crucial in order to be successful in the e-commerce arena.
It’s not just the logistical challenges that these solutions need to address, but also prepare for the worst possible scenarios. For example, the fire in leading British online retailer ASOS’s main warehouse in Barnsley saw the e-retailer lose 20 per cent of its stock, worth around £22million. Fire and safety are key concerns for retailers, e-tailers and warehouses alike; not only is the stock at risk of being damaged, but also the staffs’ lives are potentially at risk if sufficient precautions are not installed.
The fire at ASOS’s distribution centre is a textbook example in the importance of having an effective disaster recovery plan in place across your organisation’s supply chain, in order to ensure business continuity says, Jonathan Gibson, head of logistics at supply chain consultancy firm Crimson & Co.
“The ASOS warehouse fire brings home the importance of having back up and disaster recovery processes in place across your organisation’s supply chain,” says Gibson. “Ultimately, consumer’s sympathy for an incident such as this will only go so far, and if you are offline for a significant amount of time customer loyalty will waiver and they will start to look elsewhere.
“Risks to the supply chain are not consigned to supplier failure – technical failures not to mention criminal acts can have significant influences as well as political and economic disturbances. It’s imperative therefore to identify risks and set up contingency plans accounting for each element, whether it be identifying alternative suppliers or looking at how you manage and store stock.
“In ASOS’s case, its Barnsley distribution centre housed 70 per cent of the firm’s entire stock; the fact that only 20 per cent was impacted demonstrates that an effective disaster recovery review had been undertaken. A lot of organisations feel that business continuity planning can be an unnecessary, costly exercise but in the face of disaster the cost of not having a plan in place could be devastating.
“Overall, it was a textbook example of what a company should do in the face of an unprecedented disaster. Ensuring effective disaster recovery processes across all elements of your supply chain is essential to any organisation regardless of size. Those that don’t embrace this will ultimately be the ones paying for a lot more than lost stock.”49
Planning ahead with storage suppliers will help warehouses to tackle any such risks or situations, with solutions such as in-built sprinkler systems.
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As this white paper has established, the e-tail sector is a constantly
evolving animal; so much so, that Napoleon’s description of Britain
as a ‘nation of shopkeepers’ has become a little less true each year.
However, Darren Yates, head of global capital markets research at
Knight Frank, believes: “Stores will be here to stay.”50
CONCLUSIONS
Even though the retailers are leading the way, there is still much to learn; not only because of the speed in which e-tailing is growing due to customer demand, but also as a result of the developments in technology and the arrival of new innovative solutions that the entire supply chain could only dream of five years ago.
This report reflects a mixed picture, whilst many comprehend that they need to ‘do something’, those that have not been early adopters need to develop effective strategies and quickly. The logistics businesses need to ensure they are ‘in the know’ to gain maximum benefit from this trail blazer segment and champion of retail innovation.
Whilst the sector is dominated by large retail players, the supermarkets and multinational online specialists, it is also apparent that there is a wealth of e-retail activity through increasing numbers of business start-ups and SMEs whose distribution strategies will grow and flex over time. These strategies will include in house and outsourced solutions, drop ship arrangements with supply chain partners and click and collect relationships with manned or remote solutions. Whatever the challenges they face, an effective and flexible storage and distribution process will be the cornerstone of their offer to the market. This will develop good relationships with suppliers and pay dividends as the e-retail market continues to evolve.
The changing shape of goods continue to place huge pressure on storage solution providers, as they have to tackle varying sizes of products as a result of new models, designs and technologies that require different forms of storage. As a result, storage structures need to evolve and become more flexible than ever, in order to keep up with customer demand for the latest model.
A key learning from the break-neck speed of change sweeping through the logistics industry is that those who hold back from ‘taming the e-tail tiger’ will not just run the risk of falling behind their competitors in an unforgiving market, but also face the threat of punitive catch-up investment at best or potentially being excluded from the market as a serious player at worst.
With much of the e-tail conversation relating to web and infrastructure software and technology, the physical flow of products still needs handling – in many cases manually – to achieve a complete and on time delivery.
Consideration given to the physical infrastructure of racking, shelving, conveyors, workbenches and other storage solutions will provide benefits to users at all stages of the supply chain from delivery centre to high street stock room.
© Home Retail Group
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An example of the flexibility required in an omni channel e-tail supply chain
IMPORT MANUFACTURER
NDC/NEFC
STORE/STOCK
RDC
REFC COLLECTION POINTCONSUMER
DELIVER RETURNRETURN
DELIVERRETURN
COLLECTRETURN
SALES (POS)ETAIL SALE PACK/DELIVER
CLICK & COLLECTRETURN
KEY:
NDC/NEFC = National Distribution Centre/National Efulfilment Centre
RDC/REFC = Regional Distribution Centre/Regional Efulfilment Centre
Page Reference
7 1 The Times in association with the British Retail Consortium.
2 http://www.nielsen.com/us/en/insights/news/2014/e-commerce-its-an-evolution-not-a-revolution.html
8 3 http://www.jll.com/Research/eCommerce_boom_triggers_transformation_in_retail_logistics_ whitepaper_Nov2013.pdf
10 4 http://www.retailresearch.org/onlineretailing.php
5 https://www.gov.uk/trading-in-the-eu
6 http://theinternationalretailingblog.wordpress.com/2013/05/14/will-marks-and-spencer-improve-their- international-retailing-by-opening-a-new-distribution-centre/
11 7 http://www.imrg.org/index.php?catalog=1023
8 http://www.imrg.org/index.php?catalog=1023
12 9 http://www.retailgazette.co.uk/articles/02000-britain-vs-the-world
10 http://www.retailgazette.co.uk/articles/14020-online-grocery-market-to-grow-50-by-2016
11 http://www.retailgazette.co.uk/articles/14020-online-grocery-market-to-grow-50-by-2016
12 The Times supplement, page 3
13 The Times supplement, page 10
14 The Times supplement, p.8-9
15 http://www.brc.org.uk/brc_news_detail.asp?id=2656&kCat=&kData=1
13 16 http://www.propnews.co.uk/issues/2014/06/articles/164/what-lease-issues-should-landlords-be- aware-of-with-clicks-amp-mortar-tenants-/
17 http://www.brc.org.uk/brc_news_detail.asp?id=2656&kCat=&kData=1
14 18 https://www.dpdhl.com/content/dam/global_etailing_2025/pdf/dpdhl-study-global-e-tailing-2025.pdf
15 19 http://www.just-food.com/analysis/manufacturers-must-adapt-offering-for-online_id127275.aspx
20 http://www.just-food.com/analysis/manufacturers-must-adapt-offering-for-online_id127275.aspx
21 http://logisticsmanageradmin.madgex.com/assets/getAsset.aspx?liAssetID=24640
16 22 http://www.metapack.com/sites/default/files/downloads/whitepaper/May%202014%20Delivery%20 Index%20-%20April%202014%20-%20Mini.pdf
17 23 http://pdf.euro.savills.co.uk/uk/e-tailing-and-the-impact-on-distribution-warehouses.pdf
18 24 http://www.hsssearch.co.uk/page_333048.asp
19 25 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/320817/port-freight- statistics-q1-2014.pdf
20 26 http://www.pdportcentriclogistics.co.uk/pd-ports-aims-to-make-logistics-more-logical/
22 27 http://www.retail-week.com/multichannel/analysis-is-click-and-collect-success-killing-home- delivery/5062087.article
28 http://blog.micros-ecommerce.com/2014/04/28/2014-micros-returns-and-refunds-report-out-now/
29 http://www.bbc.co.uk/news/business-25445906
23 30 http://www.imrg.org/index.php?catalog=849
31 http://mobithinking.com/mobile-marketing-tools/latest-mobile-stats/e#lotsofapps
32 http://www.theguardian.com/business/2014/jul/03/argos-ebay-click-and-collect-service-650-stores
24 33 http://www.theguardian.com/business/2014/jul/03/argos-ebay-click-and-collect-service-650-stores
25 34 http://www.computing.co.uk/ctg/interview/2338989/ocado-where-sharp-eyed-robots-go-to-shop
26 35 http://www.essentialretail.com/news/supply-chain-and-logistics/article/53c93b321a522-what-the- retail-warehouse-of-the-future-will-look-like
36 http://warehousenews.co.uk/2011/04/automation-from-knapp-facilitates-online-sales-growth-for-john-lewis/
27 37 http://warehousenews.co.uk/2011/04/automation-from-knapp-facilitates-online-sales-growth-for-john-lewis/
28 38 http://www.igd.com/our-expertise/Retail/retail-outlook/3371/UK-Grocery-Retailing/
39 The Times supplement, p.13
40 http://www.jll.com/services/industries/industrial-and-logistics/ecommerce-transforms-retail-logistics
29 41 http://www.logisticsmanager.com/Articles/21917/Meeting+the+e-tail+challenge.html
30 42 http://www.theguardian.com/business/2014/jan/06/supermarkets-open-dark-stores-online-food- shopping-expands
43 http://www.igd.com/our-expertise/Shopper-Insight/Channels-and-In-store/21216/The-online-channel ---where-to-next/
31 44 http://www.retailgazette.co.uk/articles/14020-online-grocery-market-to-grow-50-by-2016
45 http://www.retailgazette.co.uk/articles/14020-online-grocery-market-to-grow-50-by-2016
34 46 http://warehousenews.co.uk/2014/05/automation-for-e-commerce/
47 http://pdf.euro.savills.co.uk/uk/e-tailing-and-the-impact-on-distribution-warehouses.pdf
48 http://warehousenews.co.uk/2014/03/conveyors-sortation-e-commerce-demands-flexibility-the-future -looks-bright-for-smart-automated-handling/
35 49 http://www.shdlogistics.com/news/view/asos-fire-demonstrates-need-for-planning
36 50 The Times supplement, p.14
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© REXfeatures
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Link 51 (Storage Products)Link House, Halesfield 6, Telford. TF7 4LNTel: 0800 169 5151Fax: 01384 472 599Email: [email protected]: www.link51.com
Note: This publication shows general concepts only, and should not be used as a guide for specific design or assembly purposes. Link 51 reserves the right to alter the specification on any of these products, in the customers interest, without prior notification.
E-commerce/2015.2.9/Issue1
