Jim Roebuck, Logistics Director at Shop Direct Group - Reverse flow in e-commerce

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Jim Roebuck, Logistics Director at Shop Direct Group spoke at the SCL Event July 2013

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  • Ops supporting our retail colleagues! Obviously, visibility of stock in store is the first difference any retailer notices moving to e-comm, hence the requirement for a dedicated e-comm DC In a store, customers can try before they buy, large numbers of clothes go through the changing rooms, fewer to the till How do we replicate this in e-comm, allow customers to be confident clothes will suit them and fit without driving high volumes of returns.
  • High returns drives high levels of cost and erodes margin. Also makes it more likely an item will be completely unsalable
  • Wrexham Strategic partnership…
  • Key Points – what’s important to us… 1: Returns are a necessary part of the way we trade (certain lines planned returns +50%) yet represent a failure cost, hence important we do what we do as cost efficiently as we can 2: Customers purchasing potential is predicated by having available credit to spend on their account, hence passing credit on returns quickly and accurately is extremely important. 3: Returns are a fundamental part of the way we trade, single biggest trading supplier to our business, hence recovery of returns back to stock is vital. 4: Orders are taken against expected returns hence having a flow of returns stock constantly available is essential, hence speed is important. 5: Lots of opportunities to avoid returns and still offer the customer choice.
  • Built in 1907 Heritage site 250 people flexi-shifts (2000 hrs per week) From 5-7hrs and 4-6hrs Agency 34 FTE 609 (flexed up)
  • Predominantly clothing Items are then streamed throughout the building for processing Capacity 100k Peaks currently at 65k
  • Primary process in the building within which most people are engaged. R Log system Same process, different product throughout the building Operators on target – upward of 30 p/h dependant upon product 3% sampling of output Key indices – Accuracy / Presentation
  • Talk about refurbishment….. Talk about secondary inspection Talk about compliance…. 2 Man comparison….30% Fit for stock, driven by low recovery on furniture flatpack. Within the mix 60% on TV’s WG 50%
  • Back to stock 73% same day, 23% next day, 98% 2 days. Returns sensitivity…within 15mins of being located on WMS they can satisfy a pick.
  • More informed purchasing – social media, product reviews, sizing, videos, imagery, avatars The fulfilment process – accuracy, timely delivery/ when they want it Customer After sales support - Anovo, GBM, Ecomaster, NESN Compliance
  • Jim Roebuck, Logistics Director at Shop Direct Group - Reverse flow in e-commerce

    1. 1. Returns Necessary Evil OR USP ?
    2. 2. THE DIFFERENCE BETWEEN ONLINE AND THE HIGH STREET
    3. 3. TYPICAL RETURNS LEVELS Children’s wear Electrical Footwear Menswear Ladieswear Occasionwear 10 – 20% 20 – 30% 30 – 60%
    4. 4. Making returns easy, whilst maximising sales? We promote ease of return: •21-day Home Approval Guarantee (HAG) •Returns are free •Returns are fast •Returns are convenient – lots of options •Xmas amnesty – gifts Which drives customer experience but brings challenges
    5. 5. The returns challenge Over 6M returns parcels p.a. - Of which over 100k are ‘2-man’ items Fast credit is essential - Customers may be waiting to shop again - Confirmation of credit SMS, VTL, Email Make it easy for customers: -Speed -Quality -Damage -GLIT
    6. 6. The response 3 core returns options - Customer’s choice to suit lifestyle Drive all carriers to speed/consistency - Long term average 2 working days: contact to credit - Continual monitoring & feedback to carriers - By store/depot/postcode - Drill down into tracking - Investigate and resolve outliers
    7. 7. How? Consistent experience - Phone - IVR - Internet
    8. 8. Simple process
    9. 9. Choice of carrier
    10. 10. Single integrated returns label Royal Mail Indicia Collect+ barcode
    11. 11. Cons •Low rural penetration •Harder to drive consistency across network of stores Pros •Convenient •Long opening hours •Large store network •Slick process •Fully tracked •Innovative
    12. 12. Cons •Lower urban penetration •Opening hours •Minimal tracking •5kg limit Pros •Largest network •Universal coverage •Fast •Consistent process •Consistent experience
    13. 13. Cons •Customer ‘waiting in’ •‘Leave safe’ not trusted •Drivers operate 9-5 •Highest cost •Low customer compliance •20%+ carded Pros •Ideal for heavy items •National coverage •Customer selects date •Mon-Sat •Fully tracked •Couriers can arrange time to suit customer •Also available ‘at the door’ or arrangement with local courier
    14. 14. Cons •Customer has to wait in •3-5 day service •Working hours/days only •Low level of customer compliance Pros •Same carrier as used for ‘2-man’ deliveries •National coverage •Fully tracked •Customer pre-advised of collection time slot •Delivery/replacement service available
    15. 15. How do they compare (speed)? Length of time taken to credit a return to account (1 man) P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 P1 P2 Period Averageworkingdays RM UnSchd Schd Coll +
    16. 16. Consistency is as important as speed How variable is our performance ? 0% 10% 20% 30% 40% 50% 60% 70% Number of working days Percent current period Last Period
    17. 17. Returns Processing
    18. 18. Headline Facts Wrexham Small & Light Products 11.3m units p.a 100k units p.a Heavy & Large Products Raven
    19. 19. Purpose Credit customer accounts with speed and accuracy Maximise the value of returns Return items to stock quickly Process returns efficiently Returns avoidance
    20. 20. A Focus on Raven 5 Floors 210k Sq Ft Head count 700 Flexible shifts 06:30 – 22:30
    21. 21. A Typical Day Clothing / Hanging 77% Typically 24k parcels 43K items Footwear 15% Hardware 8% Received and Streamed
    22. 22. 3% Output Sampling Measured Work R-Log System Efficient Process with Speed & Accuracy Examined/ Processed/ Credited
    23. 23. DON’T BLINK
    24. 24. Clearance 3.24% Returned to Vendor 5.12% Fit for stock 91.47% Returned to Customer 0.17% Value Adding
    25. 25. Same day 73% 48 hours 98% Next day 23% Items Returned to Stock
    26. 26. Customer After Sales Support Returns Prevention Product Sourcing/ Quality Checking Order Fulfilment Process More Informed Purchasing
    27. 27. THANK YOU • QUESTIONS • Returns? Millstone or USP • Do consumers require the same level of choice on returns as they do with deliveries? • Should returns be free?

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