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IRUK Top500 The Customer Report: 2018

IRUK Top500 The Customer Report: 2018

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Industry updates

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MOVES AT AMAZON


Amazon has launched Home Services, an installation and assembly support service, in the UK. The service allows shoppers buying more than four million products on the site to schedule installation or assembly support from a professional when they check out. The services can also be bought if customers have bought their goods elsewhere. Customers in Greater London, Birmingham and Manchester will initially be able to book such services through an invite-only marketplace of professional service providers. Pre-packaged services can be added to shopping baskets but customers are only charged when the job is complete.


The experts available will include general handymen, electricians, plumbers and home cinema specialists with new cities and services added over time. “We’re thrilled to be expanding Amazon Home Services to the UK as a simple way to book trusted, service professionals,” said Scott Webster, general manager, Amazon Home Services Europe. “Following our successful launch in the US, customers have told us they love the convenience and peace of mind that comes with trusted, professional installation of their products. We’re delighted to be able to offer this same experience to UK customers through a network of handpicked, local trades people and service providers.” Amazon has also launched a new programme aimed at helping individuals launch their own delivery business to deliver Amazon packages, whether they have previous logistics experience or not. Available in the US, it claims that successful owners would be able to earn as much as $300,000 in annual profits, operating fleets of up to 40 delivery vehicles.


Owners will be promised delivery volume from Amazon, access to the company’s delivery technology, training and discounts on assets and services such as vehicle leases and insurance. The company has also announced that Prime Day 2018 will be on July 16 and will run for 36 hours, up from 30 hours last year. The day will include more than one million exclusive deals for Prime customers worldwide. As well as extending the promotional period, Amazon is also adding 50% more Spotlight Deals globally – featuring its deepest discounts on top brands and the most popular products. The promotional event also focuses on small businesses. On Prime Day 2017, customers ordered more than 40 million items from small and medium-sized businesses worldwide. Also new this year, hundreds of well-known and emerging brands around the world will unbox exclusive new items, content and special-edition products available just for Prime members for a limited time. For the first time, US Prime members will also be able to celebrate Prime Day at their local Whole Foods Market.

 

MORRISONS HITS SOUTH EAST


Morrisons has extended its home delivery service from north London into south London and the south-east, delivering into most of Surrey and Kent and a further two million homes. The company claims that the expansion now enables it to reach 70% of UK households. Customers will be able to order from their computer, smartphone, tablet and their Alexa voice-enabled device. Delivery in the south-east will be free initially and then will be charged for, with prices starting from £1.

 

The company will also be offering a doorstop check service whereby customers will be able to confirm the freshness of the products before they accept them. “Our aim is to make and provide affordable food for more and more people so we are delighted to expand our delivery service to more homes in the south east of England,” said Matt Kelleher, Online and Digital Director at Morrisons. Morrisons has also awarded a six-year contract to manage its wholesale logistics operations to DHL Supply Chain. The new contract will see DHL provide order fulfilment, store delivery and IT services to serve the retailer’s wholesale operations, starting with 1,650 stores in the McColl’s Retail Group. Those stores are exclusively served by Morrisons under its Safeway wholesale brand.

 

 

£7BN OF RETURNS


UK retailers are seeing £7bn of purchases returned each year with a quarter of retailers (26%) saying they have seen a rise of returns in store and online over the last two years and the number of items returned up by 22% on average. The research by Barclaycard, says that 37% of fashion, footwear and accessory retailers report a rise in returns since 2016. British shoppers spend an average £313 online on clothes but send back almost half (£146 worth). Fit was a major issue. More than a third (36%) of shoppers said retailers should improve online size guidelines and 35% that size should be standard across retailers. A further 16% want to see more technology used online.

 

Meanwhile, XPO Logistics is adding augmented reality to its Ship XPO consumer self-service platform in the US later this year. The technology can be used by shoppers to help visualise the best place for heavy goods such as sofas, beds and appliances to fit in their homes in an effort to cut return rates for such items. “Augmented reality is another innovation that our retail and ecommerce customers can offer to consumers, providing more control over the shopping experience,” said Troy Cooper, President, XPO Logistics.

 

REVAMPING


Women’s value fashion retailer Bonmarché has focussed on improvements in its supply chain and greater efficiencies within its distribution centre in an effort to reduce costs, the company said as it announced its year-end results. Within its logistics operations the company carried out a strategic review in early FY18 which it says identified a number of opportunities to improve or modernise the operation and reduce costs. Bonmarché started with what it called “a sharpened focus on improving the basics” such as reducing the number of steps needed to complete a picking operation, re-laying part of the distribution centre and increasing the picking and packing productivity of the ecommerce operation. Further initiatives are being carried out this year.


The company also introduced new suppliers in the last year aimed at delivering with a shorter lead time and improving agility at the retailer, allowing it to react faster to customer demands. The new model has also allowed Bonmarché to reduce stock levels, it said. It held its first supplier conference in September 2017, aimed at delivering a consistent message to its suppliers and to encourage more exchanges of views. It said the event allowed it to address operations matters such as standardisation of boxes in which stock is delivered, improvements in which allows it to improve efficiency within its distribution operation. Bonmarché also improved its delivery offer in the last year so that customers now benefit from free delivery above a certain spend threshold. The retailer said it would continue to test different thresholds which may alter at different times of the year or to coincide with promotions. It said that further improving delivery options and making the whole experience slicker would be a key focus for the new financial year. The company plans to introduce an improved customer fulfilment option using a partner third party interfacing to its systems. It will release more details on this at its interim results in November.

 

AUTOMATING PETS AT HOME


Pets at Home is to undergo a major upgrade at its ecommerce distribution centre in Northampton with a £2.5m warehouse automation project. The retailer has signed a deal with Conveyor Networks to install an automated picking and packing system spanning three floors. It follows a trifold growth in ecommerce parcel volumes in the last 18 months. Once implemented, the warehouse will be capable of supporting Pets At Home’s future expansion plans of 100% growth in parcel volumes over the next five years.The UK DC is responsible for fulfilment of online orders, including subscription-based medicines. The system will include conveyor modules, packing machinery, automated label print and apply and intelligent routing and sorting.

 

It will also include the software platform that will manage the interface between the PLC control system and the host WMS platform; imio software’s MFC module (Material Flow Control) which controls the flow of data between both programs and will provide real-time operational visibility and tracking capability and is provided by Conveyor Networks’ associate business – imio Software Solutions.“Automating material flow and packing for our ecommerce and subscription-based medicines is a priority following our recent growth,” said Terry Siddle, Director of Logistics and Distribution at Pets At Home. “It’s vital that we can handle increasing orders and parcel volumes without causing compromise to our high customer delivery expectations,” he said. Pets at Home’s own in-house fleet manages the majority of the retailer’s click and collect orders to store, whereas home deliveries are handled by external carriers.

 

AO BOOSTS VANS


European online electrical retailer AO World has increased the number of deliveries of MDA (major domestic appliances) from its own AO liveried vans in the last year, boosting its brand presence the company said in its year-end results.The company said it had continued to invest to create a delivery infrastructure that customers can depend on when they need it most – and that this had boosted its key customer metrics, such as customer satisfaction, as a result. AO opened a new outbase in Bridgend during the year which it says will help to further improve delivery availability and services to its customers in the southwest, as well as reducing stem mileage and improving efficiencies in its logistics business. It said its premium installation fleet, which not only delivers but also installs products for customers, had experienced strong growth over the period with improved lead times and an improving proposition.


The company’s logistics business also won a distribution contract with a new third party client during the year – a new focus for income streams for the company. To improve product ranges AO said it has also added a second drop ship vendor to its infrastructure which it says has allowed it to increase its computing range and bolt on new categories to AO.com. This year it will see an increased focus on third-party logistics which will also see investment in coming years too. Warehousing costs in the UK increased by £2.7m to £30m during the year, representing 4.4% of revenue. The increase included the full-year costs of two outbases opened in the previous year as well as the opening of the new Bridgend outbase.

 

 

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