Logistics crucial for successful webshop

E-Retailing

10 & 11 November 2010 - EindhovenGW ref. 9026X001/ML/th

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Content

1. Intro1. Intro 2. Facts &Figures

3. ProfileE-Retailing

4. Internet DC

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1. IntroMedia announcements

Ruim een derde van de Nederlandse webshoppers (36 procent) zegt meer online aankopen te doen als de afleverservice van webshops verbetert. Slechts 17 procent van alle shoppers wil extra betalen voor een betere dienstverlening. Webwinkels doen het goed. Inmiddels kopen we 3,5

procent van onze boodschappen on-line. In de ons omringende landen shoppen ze zelfs 5 tot 9 procent on-line. Nog voldoende groeipotentie voor webwinkels. Toch is het volgens Walther Ploos van Amstel hoog tijd voor Eerste Hulp Bij Verzenden.Retailers schakelden de afgelopen jaren veelvuldig

over op webwinkels naast hun fysieke winkels om

de consument nog beter van dienst te zijn. Veel

bedrijven doeken echter hun webwinkel al snel op

omdat de gecombineerde verkoopbenadering faalt

in de uitvoering. Een webwinkel heeft pas kans

van slagen als vooraf goed wordt nagedacht

over het logistieke traject, zoals de te hanteren

pickstrategie in het warehouse.

De stelling van deze quote: “Bedrijven die een

webwinkel opstarten, denken veel te lichtzinnig over

het logistiek proces dat er achter zit” (Ad van Goor)

Webwinkels schieten als paddenstoelen uit de grond. Een compleetnieuwe sector is ontstaan, waarin veel valt te verdienen, mits de logistiek goed wordt georganiseerd. “Webwinkels stranden omdat het ze vaak ontbreekt aan goede sturing over hun logistieke keten.”

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Content

1. Intro 2. Facts &2. Facts &FiguresFigures

3. ProfileE-Retailing

4. Internet DC

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2. Facts & FiguresInternet access is the basics

• EU counts 195 Mio of Households• 60% of Households in 4 countries (France, UK, Germany, Italy)

National differences about internet accessibility:• Frontrunners: The Netherlands, UK, Germany & Nordics• Stragglers: Spain, Italy, Portugal & CEE-countries

The internet accessibility mainly determined by:• Governmental maturity • ICT-technology by telecommunication suppliers.

# 195 Mio

EU Households in 2008 (In Mio)

16.2

51.0 26.7 26.6

39.323.97.24.4

France

UK

Germany

Italy

The Netherlands

Belgium

Spain

Other 20 Countries

Internet Access by Households in 2008 (%)

60%

62%

71%

75%

42%

86%

60%

51%

48%

0% 20% 40% 60% 80% 100%

EU (27Countries)

France

UK

Germany

Italy

TheNetherlands

Belgium

Spain

Other 20Countries

Source: Eurostat

Source: Eurostat

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0%

10%

20%

30%

40%

50%

60%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

% o

f E-S

hopp

ing

indi

vidu

als

0

50

100

150

200

250

Onl

ine

Sale

s (B

illio

n Eu

ro's

)

2. Facts & FiguresOnline shopping is booming business

± 30 % € 136 Bn2008

± 50% € 186 Bn2013

E-Shopping Individuals

Online Sales

Time Period

Better, Higher & More• Internet accessibility (broadband)• Payment options• Online security level• User friendly websites• Service levels

Why

Source: Forrester

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2. Facts & FiguresThe potentials

The British internet users shop most often after browsing • UK: 80%• Germany: 77% • The Netherlands: 67%• Belgium: 32%• Italy: 30%

32%

40%

57%

53%

11%

56%

21%

20%

24%

56%

63%

70%

68%

37%

66%

49%

53%

83%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

EU (27 Countries)

France

UK

Germany

Italy

The Netherlands

Belgium

Spain

Other 20 Countries

Individuals using the internet at least once a week in 2008 (%)

E-Shopping in 2008 (%)Source: Eurostat

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2. Facts & FiguresPopular products & services

Different focus by gender

Female e-shopper

• Clothing• Holidays arrangements

Male e-shopper

• Electrical Goods• CD’s & DVD’s

Top 10 most popular product/services bought online

54%

42% 40% 38%33% 33%

23% 23% 21% 19%

0%

10%

20%

30%

40%

50%

60%

Travel

Tickets

Holiday

sBook

s

Concert

/Thea

tre/Fes

tival

ticke

tsClothes

Electri

cal G

oods

CDsCinem

a tick

ets DVDs

Music

Downloa

ds

Source: EIAA

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Content

1. Intro 2. Facts &Figures

3. Profile3. ProfileEE--Retailing Retailing

4. Internet DC

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3. Profile E-Retailing Main characteristics

• B2C-customers are more unpredictable and unstable than in B2B-customers

• Small order sizes (mostly single line orders with single pieces)

• Majority of orders are parcel-orders ► specific packing process required

• Dealing with promotional orders

• Larger product assortment (stock-items vs non-stock items)

• Substantial return-flows (i.e. in apparel industry: 35-45% of outgoing orders)

• Higher demand for online shipment traceability

• Different manners of billing (pre-billing/ COD)

• Last mile by home delivery still big challenge

• Etc.

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3. Profile E-Retailing Type of internet companies vs order fulfillment possibilities

Offline retailers ; Internet as an additional sales channel

Company Type

Type 1

Type 2

Type 3

Clicks & Bricks

Clicks with own assets

Clicks with no assets

What

Delivery along internet only ; own inventories/warehouses

Delivery along internet only ; No inventories/warehouses

Order picking & delivering from the

stores

Order picking & delivering from an

existing DC for stores

Order picking & delivering from a dedicated DC for

internet orders

Outsourcing oforder fulfillment

Company Type 1 X X X X

Company Type 2 X X

Company Type 3 X X

Possibilities of Order Fulfillment

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3. Profile E-Retailing Supply Chains of e-retail

Traditional Retail Chain

E-Retail Chains

Suppliers/Manufacturers

Internet DC

Stores

PUDO

Hub LSP

DC’s

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3. Profile E-Retailing Order fulfillment possibilities - Pro’s & Con’s

Possibilities + -Order collecting & delivering from the stores

- Low investments- Easy to set up such operation for companies that already have stores- Small response time

- Stores are not designed for effecient order picking- Additional processes are needed- Lower service for regular customers - Cannibalization of regular sales

Order collecting & delivering from an existing DC for stores

- Relative low investments- Easy to set up such operation for companies that already have a DC for delivering their stores

- DC for replenishing store is not designed for internet orders- Full internet assortment must be available in DC- Picking on piece-level- High distances for picking- Cannibalization of regular sales

Order collecting & delivering from a dedicated DC for internet orders

- Optimal layout- Economy of scales

- Higher investments, new distribution concept- Full assortment must be available- Cannibalization of regular sales

Outsourcing of order fulfilment

- Focus on core business - Low investments- Execution by experts- No hiring of personnel- Economy of scales

- Loss of control and knowledge- Full assortment must be available- Cannibalization of regular sales

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Content

1. Intro 2. Facts &Figures

3. ProfileE-Retailing

4. Internet 4. Internet DCDC

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4. Internet DC Solutions

Low Medium High

Low

High

Medium

Mechanization & Automation Level

Inve

stm

ents

Leve

l

AS/RSMiniload

Conveyorsystems

Voice-pickingRF-pickingPaper-picking

Sorting System

Pallet rackingShelf racking

Lift/Paternoster

Case flows withPick/put-2-light

Visual-picking

Low Medium High

Low

High

Medium

Mechanization & Automation Level

Inve

stm

ents

Leve

l

AS/RSMiniload

Conveyorsystems

Voice-pickingRF-pickingPaper-picking

Sorting System

Pallet rackingShelf racking

Lift/Paternoster

Case flows withPick/put-2-light

Visual-picking

M A K I N G SU P P L Y CH A I N S YO U R

CO M P E T I T I V E AD V A N T A G E !

Booth № 29

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Groenewout Profile

Groenewout is an international, independent consulting company providing integrated value-added advisory and support services across all industry sectors to support our clients in achieving business process and operational improvements within Supply Chains and Logistics.

• Benchmark• 2nd-opinion• Audit• Arbitrage• Training

• Project mgt.• Tender- & contract mgt.• Construction (site) mgt.• Process improvement mgt.• Transition mgt.• Change mgt.• Interim mgt.

Modeling & Simulation• CAST-dpm• WHAT-2-STORE©• WARE-2-STORE©• BUILD-2-STORE©• ABC-2-STORE©• Automod

• Data gathering• Supply ChainsTransparency

• Business Requirements

Consulting Service Portfolio Consulting Methodology

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