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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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eDelivery News Roundup

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NEW AUTOMATED DC FOR SHOP DIRECT

 

Shop Direct is to close its three existing fulfilment centres in Greater Manchester and invest instead in a new automated, 500,000sq ft distribution centre in East Midlands.

 

Development of the new site, which is at East Midlands Gateway, is due to start in May with the company beginning its exit from its sites in Shaw, Little Hulton and Raven from mid-2020. The new site is expected to be fully operational by peak 2021.

 

The existing sites were deemed to not be fit to support the group’s future operational ambitions because of limited accessibility, layout and loading restrictions as well as a lack of space. The move is expected to impact more than 1,000 permanent Shop Direct staff and 815 agency staff with redundancies expected.

 

The company said that to continue to meet customer demand, the business required a purpose-built and automated facility in a central, well-connected location.

 

The site’s position in the East Midlands, adjacent to the M1 and East Midlands Airport, with its own rail freight terminal, will enable the business to increase its cut-off time for next day delivery to midnight from the current 7pm, and to explore the introduction of same-day delivery in the future. Approximately 500 permanent roles will be created at the new site, with the addition of around 200 to 300 staff at peak.

 

Derek Harding, interim group CEO of Shop Direct, said the company was working closely with Usdaw to help those affected by the closures of the existing sites. “This is a tough day for the business and we know how difficult this news will be to hear for our teams in Shaw, Little Hulton and Raven. However, these proposals are necessary for our future and to enable us to continue to grow and meet rising customer expectations.”

 

The new fulfilment centre will move all aspects of Shop Direct’s one-man fulfilment operation under one roof, including inbound, distribution, outbound and returns. The facility, which is expected to require a total investment of around £200m, will host approximately 500 permanent colleagues and use the latest in automation technology from Knapp, improving efficiency in Shop Direct’s fulfilment operation, including processing new orders and returns faster than ever before.

 

DEBENHAMS BEGINS DC AUTOMATION

 

Debenhams has begun the automation of its distribution centres as it looks to improve efficiencies. It comes as the company announced a shock profit fall and major plans to improve the business. The retailer said that following a successful rollout of direct to floor distribution it has activated the first stage of the automation of its distribution centres.

 

Debenhams said that certain stores were now receiving their deliveries fully sorted by division. It said that this was making processing and floor replenishment in stores much more effective. This in turn is allowing store colleagues to be more customer-facing.

 

The direct to floor distribution model was introduced in May last year after a move to a single warehouse management system. The new initiative allowed Debenhams to declutter the sales floor by holding stock in the distribution centre until needed and increasing the frequency of replenishment. The company also at the same time reduced stock options by around 10% whilst also improving regional warehouses.

 

Debenhams last year closed 10 regional warehouses after announcing their closures in April 2017 and began consultation on the planned closure of its Northampton distribution centre.

 

DOMINO’S PIZZA LAUNCHES NEW HOTSPOT DELIVERY SERVICE

 

Domino’s Pizza has launched a new hotspot delivery service in the US which will allow delivery to more than 150,000 delivery hotspots at locations such as parks, beaches and other destinations that don’t have traditional addresses. The locations have been chosen by local Domino’s stores around the country.

 

The new set drop-off points will allow customers to find the hotspots with location services on their smartphone. Such orders can then be made either online or through the company’s mobile app. Customers pre-pay for their order, select the location and then can add further instructions so that the delivery driver can recognise them. After completing their order customers will receive text message alerts as well as a final estimated arrival of their driver.

 

“We listened to customers and their need for pizza delivery to locations without a traditional address,” said Russell Weiner, President of Domino’s USA. “We know that delivery is all about convenience, and Domino’s Hotspots are an innovation that is all about flexible delivery options for customers.”

 

PAY LATER WILL LEAD TO RETURNS TSUNAMI

 

A quarter of retailers are expected to adopt try before you buy schemes by 2019 in a move which could see a tripling of returns costs, according to a new report. The likes of ASOS, Topman and Schuh are already adopting such schemes.

 

The report, by Brightpearl, canvassed 200 retailers and 4,000 consumers and found that three quarters (76%) would ‘definitely’ or ‘maybe’ purchase more items if offered a try-before-you-buy option with shoppers ordering on average three extra items each month.

 

However, the study showed that 87% would return up to seven purchases – with research showing that 85% of consumers expect retailers to provide returns for free.

 

The idea of free or cheap returns is also encouraging customers to deliberately over order with more than 40% of retailers having seen a marked increase in ‘intentional returns’ over the past twelve months, according to the research.

 

The study showed that half of retailers (51%) say margins are being heavily impacted by handling returns and 72% believe the problem will only get worse thanks to try before you buy.

 

Some 17% of global retailers have already adopted the try-before-you-buy model. By 2019, more than a quarter will offer this type of service to customers.

 

However more than two-thirds of retailers (69%) are not deploying any technology solutions to process returns, according to the study. This is despite the complexity of managing returns, with the average returned purchase passing through seven people before it’s listed for resale.

 

Derek O’Carroll, CEO of Brightpearl said: “For consumers, try-before-you-buy is a positive trend, removing another barrier to purchase. The good news for retailers is that this will almost certainly lead to an uplift in sales. “However, this trend could spell disaster for retail business owners if they do not prepare by having the right framework and solutions in place to manage returns.”

 

DC CONSOLIDATION AT M&S

 

Marks & Spencer has announced that its Hardwick distribution centre (DC) on Hardwick Grange, near Warrington is to close. The DC, which serves stores in the north west and Scotland, will close in September. Marks & Spencer announced that it would cease operations at its Neasden, North London distribution centre in January.

 

The move is part of the company’s plans to create a single-tier clothing and home logistics network which will allow it to move products from suppliers to stores faster and at lower cost through a smaller network of large DCs, strategically placed across the UK.

 

The site is currently operated by XPO Logistics with transport operations provided by DHL. The two also worked together on the Neasden site. The companies have entered into a period of consultation with the 450 workers on site at Hardwick.

 

Marks & Spencer is in the process of automating its DC in Bradford so it can now handle more capacity.

 

The retailer has also announced that it has appointed DHL to operate its new South East DC at Welham Green following a competitive tender. The 495,000 sq ft site is currently being mechanised and fitted to M&S specifications and will serve 150 stores in the South East. It will open in 2019 with around 500 staff.

 

Gordon Mowat, Director of Clothing and Home Supply Chain and Logistics, said: “Closing Hardwick will help to remove some complexity from our network and speed up our supply chain.”
The M&S Clothing & Home distribution network currently comprises of 18 sites including large DCs in Castle Donington, Bradford and Swindon. The closure of its distribution centre in Neasden is due to be completed early next year.

 

POCKET SORTER FOR ASOS

 

ASOS is to install pocket sorter technology at its Berlin distribution centre following its successful introduction in the company’s UK distribution centre in Barnsley.

 

The solution includes Knapp’s OSR Shuttle store which allows for the flexibility of a frequently changing article range and picking at the Pick-it-Easy workstations. The transport pockets are combined with a hanging goods system.

 

The pocket sorter system uses a unique algorithm to sort randomly picked items into an exact sequence. Flat-packed and hanging goods are consolidated at one of 200 packing stations in the precise sequence needed for dispatch.

 

“At the pack stations, we only provide the items that belong to one individual customer order for picking from the pockets,” said Heimo Robosch, Executive Vice President of KNAPP AG. “The next order then arrives once the previous pack order has been completed. The streamlining of all processes results in a reduction in costs as well as an optimised transit time, both crucial to ecommerce businesses,” he said.

 

Dürkopp Fördertechnik, the Knapp subsidiary which engineered the systems, originally launched the pocket sorter solution into ASOS’s UK DC in 2014, initially with three modules. This increased to four in 2016 and to five more recently which has increased the overall performance to 30,000 items per hour. The system will be further expanded by the addition of a dynamic buffer this year to allow the fully automatic storage and retrieval of about 80,000 single items.

 

In its latest financial results, ASOS said that it made almost 100 delivery solutions improvements to its business over the past six months. These included a new returns portal for Australian customers that is to be extended to other markets.

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