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RetailX Brand Index 2019

RetailX Brand Index 2019

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Delivery news - InternetRetailing Magazine May 2019

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STUDY FIND ‘GOLDILOCKS ZONE’ FOR ELECTRIC CARGO BIKE DELIVERY

An electric cargo bike is more cost-effective than a truck on deliveries up to two miles from the distribution centre, according to a new academic study. The University of Washington modelled a range of delivery scenarios to determine which vehicle cost more. They varied distance from the distribution centre and the number of parcels per stop.


While bikes are suitable for short distances and gain additional advantages through their additional manoeuvrability, trucks become more cost-effective at ranges of two miles or higher, the study shows.


Trucks were also more cost-effective once the number of parcels on the delivery route increased beyond 20. The study’s authors said this meant trucks would remain a better option for bulk deliveries to the likes of office.


“Cargo bicycles may be a good substitute for trucks in cities that are considering policies that restrict the time and type of freight trucks driving through cities using congestion charges or simply banning them,” the study’s authors said.


“Another possibility is to incentivise the use of cargo bicycles by including city support for bike storage in or near downtown. Cargo bicycles could also be a mode of transit included and discussed in city master plans.”


DPD recently partnered with a new start-up to develop a new type of electric delivery bike. The Project 1 is powered by peddling with the ability to support this with electric assistance. It is designed to fit down cycle paths and can hold six cargo containers with up to a 150kg payload.

 

The vehicle has a “modular” design, meaning that it can be extended, widened or shortened depending on applications.

 

UBER & SAP PARTNER ON FREIGHT MATCHING

Uber and SAP will help connect shippers and carriers with customers as part of a new freight matching partnership. The Uber Freight solution will be integrated into SAP Logistics Business Network, allowing customers to access real-time rates and capacity information from Uber’s network.


SAP says shippers will be able to access a larger ecosystem of drivers while carriers and drivers can see and choose loads according to their business and schedule. It says this will improve utilisation and time to plan and minimise costs.


“For the world’s biggest shippers, an efficient, digitalised supply chain is critical to their success.

 

Uber Freight is partnering with SAP to bring shippers and carriers together at the level where freight decisions are being made. This innovative tech-forward approach to freight means shippers can spend less time sourcing quotes and capacity and more time getting goods to market,” says Bill Driegert, senior director at Uber Freight.


Hala Zeine, president at SAP Digital Supply Chain, comments: “Finding and booking freight can be the most expensive and often the most complex piece of the supply chain. This combined solution will remove roadblocks and offers a simpler, more automated approach that streamlines operations, delivers tangible cost savings and ultimately creates a better customer experience.”

 

SHOP DIRECT OUTSOURCES RETURNS TO CLIPPER

Shop Direct has outsourced a key logistics hub and introduced new returns management software. The five-year contract with Clipper Logistics will see the latter leasing Shop Direct’s premises at Raven Mill near Oldham in Greater Manchester.

Clipper will employ around 400 Shop Direct personnel, providing a global returns management and a pre-retail service, managing the availability of stock. The solution will include Clipper’s Boomerang and technical services division value-added services.

The contract will commence in July 2019 and last until the activities migrate to Shop Direct’s East Midlands fulfilment centre in 2021. At this point a number of Shop Direct’s specialist returns management activities will move to Clipper’s Swadlincote in Derbyshire.

After this Clipper will expand the operation at Raven Mill into a multi-user returns and pre-retail support centre. “Clipper has a track record of delivering best in class fulfilment and returns for digital retailers. The agreement represents a positive outcome for our colleagues at Raven Mill,” says Henry Birch, ceo, Shop Direct.

 

Steve Parkin, executive chairman of Clipper comments: “This contract win is significant for Clipper, adding one of the UK’s leading pureplay digital retailers to our roster of best in class retail operators. It demonstrates Clipper’s unique ability in returns management across fashion, electronics and general merchandise.

 

SAME-DAY DELIVERIES RISE FOR ARGOS

Argos has seen same-day deliveries rise year-on-year as it extends its premium offering across the country.


The retailer’s parent company Sainsbury’s revealed in its full year results that sales using the Fast Track home delivery service had risen 13%. The company can now deliver to 90% of UK postcodes within four hours, it said.


Meanwhile, demand for the click and collect option had risen 10%, with 85% of customers who ordered online choosing to collect from one of Argos’s 1,200 physical locations. These include Sainsbury’s supermarkets, which the grocer said helped drive supermarket sales up 1%.


Argos can now deliver its full range the same day to more than 50% of the country, with four-hour delivery available for over 20,000 products. This comes after it opened a new regional fulfilment centre in Croydon last year.


Argos uses a hub and spoke model for delivery, in which some larger stores serve as warehouses and others support them. Around 60% of Argos sales start online, exceeding £3bn in the year.


The retailer was one of the top performers for delivery over peak, fulfilling orders in a day compared to the average of five days, according to a study that was released in December.

 

ZALANDO ENDS FREE DELIVERY IN THE UK

Zalando has ended free delivery in the UK, Ireland and Spain as the retail industry begins to take a harder stance on previously generous policies. Customers will now have to pay delivery charges on orders under a specified certain value in the three countries.

 

The charges are set at £3, €3 and €3.50 in the UK, Ireland and Spain respectively. The minimum order values are set at £19.90 in the UK and €24.90 in Ireland and Spain. Returns will still be free in Ireland and Spain.


Zalando first introduced delivery charges in Italy back in November. Delivery is still free in its other markets. The company uses fulfilment partners including DHL and Hermes.


These markets behave differently to other European countries, according to Zalando. “At Zalando, we aim to bring the fitting room into people’s homes. Our customers can order several items and try them on in the comfort of their homes, only keeping what they really want,” the company told eDelivery.


However, the retailer said customers in the UK, Spain and Ireland had been placing relatively small orders, meaning that they had “not yet fully explored the advantages of shopping on Zalando.”


The change in delivery pricing policy therefore “aims at incentivising our customers to bundle more items, increasing basket sizes, and therefore enhancing more efficient delivery and returns services, and therefore a more sustainable business.


“This measure is enabling us to continue to satisfy the growing expectations of our customers in the services that they are really looking for, while continuing to offer an almost limitless selection of 300,000 fashion and lifestyle articles, and diverse localised convenience services, from payments to delivery options.”

 

LOGISTICS ACTION AT ASOS

ASOS may take action against serial returners in a change to its policy which aims to make it more sustainable. The fashion retailer told customers in an email that it may “investigate and take action” if it notices an “unusual pattern”.


It announced that it would increase its returns period from 28 to 45 days.


The email acknowledged the importance of easy returns to ASOS’s brand but said that it had to ensure that returns were sustainable “for us and for the environment”.


The fast fashion retailer has also reported that it is able to process nearly 10 million orders and 3.5 million returns a week as it comes to the end of a long period of investment.


The fashion retailer saw an 87% drop-off in profits in the six months to February to reach £4m, which ASOS attributed to spending on its new warehouse capacity. Sales rose 14% to £1.3bn.


Major projects have included adding a dynamic buffer that can predict volumes of orders during the day to reduce processing times and opening a new “Euro Hub” warehouse in Berlin.


Having invested £55.1m into technology in the six-month period, with 17% focused on efficiency and the majority of this on logistics, the company said that it was “through the peak” of the heavy investment phase and set to begin reaping the benefits of upgrading its logistics. So what’s next?


Firstly, ASOS has been testing automation at the Euro Hub warehouse. While ASOS already offers next-day delivery across Europe, automation allows it to improve the cut-off times in Germany. In addition, the higher throughput speed will allow the company to move greater volumes through road freight, making it more efficient.


Secondly, ASOS plans to introduce a new system across its seven returns processing sites in five different countries. It expects this to lead to a roughly 10% productivity boost in the centres, removing the need for any new facilities in the medium term.

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