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IREU Footprint: Operations and Logistics

 Sean Fleming evaluates the capabilities of Europe’s top Operations and Logistics performers

Most discussions on the state of ecommerce in Europe will reach at least one point of consensus – the UK remains the most advanced European ecommerce economy. That’s particularly clear when you examine certain key indicators, such as customer adoption of online shopping. The extent of that can be seen in many ways, such as the prediction made by MetaPack and IMRG that UK retailers will ship 1 billion parcels this year, which is a staggering number.

If you were on the outside of the industry looking in, you might be forgiven for thinking the rest of Europe regards the UK’s enduring ecommerce success story with a mixture of admiration and envy. But, to borrow from George Gershwin, it ain’t necessarily so. After all, Europe is not a single homogeneous entity and to treat it as such only leads to confusion and frustration – something that’s as relevant as it is obvious where retail logistics and operations are concerned.

Take, as one example, Europe’s largest retailer Carrefour , with its 10,000 stores and more than 360,000 employees. Despite its Top Three Global Retailer status, Europe’s number one is, by its own admission, a novice when it comes to ecommerce in general and home delivery of grocery shopping in particular.

That would be unthinkable in UK terms; you only have to look at Tesco and Asda to observe the fight for the hearts, minds and wallets of online shoppers.

It’s worth pointing out at this juncture that grocery retailers were excluded from some IRUK analyses due to their unique place in the market. But the Carrefour example bears witness to the importance of appreciating the differences of culture and attitude throughout the continent.

“Europe is not a single homogeneous entity and to treat it as such only leads to confusion and frustration”

One other interesting thing to note about Carrefour is that it doesn’t have much of a presence in northern Europe – not in terms of stores, anyway. There was a Carrefour in Caerphilly in the 1970s, and maybe a handful in England in the 1980s, but that was all the UK saw.

To recap then, Europe’s largest retailer doesn’t do a lot of ecommerce and doesn’t have much of a foothold in northern Europe. Maybe that tells us something about the way in which people across southern Europe prefer to shop. Maybe those narrow cobbled streets in those quaint southern European medieval towns make offering a first class delivery service just that bit too difficult, or too expensive, in a region that is still struggling under the weight of recession and austerity measures.

The Nordic region probably has more in common with the UK, in terms of the maturity of the industry that sits behind the buy button, and the ongoing investment in the right people, processes and technology. And, of course, the same is true of Germany where, among others, eBay Enterprise (which is working with smaller retailers that want to punch above their ecommerce weight) has based much of its operations.

A number of less obvious factors, like good, reliable internet access – which isn’t always the case once you’re outside of major metropolitan areas – really come into their own here. A strong technology industry is part of the mix too, as many of the services underpinning a menu of delivery/collection/return options, through to warehouse management and data analysis are tech-dependent.

Has the operations and logistics picture changed much in the last 12 months? Yes, undoubtedly so.

Knowing your customers and offering services that are both meaningful and valuable to them are the common denominators across the top performing retailers, here in the UK and in other parts of Europe. The Elite retailers in the Operations and Logistics Dimension of the IREU 500 will be those that keep developing new services that customers flock towards. If you’re embarking on an ecommerce journey, no matter where you are in Europe, you’re going to need your customers to go along with you.

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