Logistics crucial for successful webshop
E-Retailing
10 & 11 November 2010 - Eindhoven
GW ref. 9026X001/ML/th
Page 2
Content
1. Intro1. Intro
2. Facts &
Figures
3. Profile
E-Retailing
4. Internet
DC
Page 3
1. Intro
Media 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 compleet
nieuwe 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.”
Page 4
Content
1. Intro
2. Facts &2. Facts &
FiguresFigures
3. Profile
E-Retailing
4. Internet
DC
Page 5
2. Facts & Figures
Internet 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 (27
Countries)
France
UK
Germany
Italy
The
Netherlands
Belgium
Spain
Other 20
Countries
Source: Eurostat
Source: Eurostat
Page 6
0%
10%
20%
30%
40%
50%
60%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
%ofE-Shoppingindividuals
0
50
100
150
200
250
OnlineSales(BillionEuro's)
2. Facts & Figures
Online 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
Page 7
2. Facts & Figures
The 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
Page 8
2. Facts & Figures
Popular 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%
TravelTickets
H
olidays
B
ooks
C
oncert/Theatre/Festivaltickets
C
lothes
ElectricalG
oods
C
D
s
C
inem
a
tickets
D
VD
s
M
usic
D
ow
nloads
Source: EIAA
Page 9
Content
1. Intro
2. Facts &
Figures
3. Profile3. Profile
EE--RetailingRetailing
4. Internet
DC
Page 10
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.
Page 11
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 of
order fulfillment
Company
Type 1 X X X X
Company
Type 2 X X
Company
Type 3 X X
Possibilities of Order Fulfillment
Page 12
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
Page 13
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
Page 14
Content
1. Intro
2. Facts &
Figures
3. Profile
E-Retailing
4. Internet4. Internet
DCDC
Page 15
4. Internet DC
Solutions
Low Medium High
Low
High
Medium
Mechanization & Automation Level
InvestmentsLevel
AS/RSMiniload
Conveyor
systems
Voice-pickingRF-picking
Paper-picking
Sorting System
Pallet racking
Shelf racking
Lift/Paternoster
Case flows with
Pick/put-2-light
Visual-picking
Low Medium High
Low
High
Medium
Mechanization & Automation Level
InvestmentsLevel
AS/RSMiniload
Conveyor
systems
Voice-pickingRF-picking
Paper-picking
Sorting System
Pallet racking
Shelf racking
Lift/Paternoster
Case flows with
Pick/put-2-light
Visual-picking
M AKI NG SUPPLY CHAI NS YOUR
COM PETI TI VE ADVANTAGE!
Booth
№ 29
Page 17
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 Chains
Transparency
• Business
Requirements
Consulting Service Portfolio Consulting Methodology
STRATEGYTACTICALOPERATIONAL

E-Retailing - Logistics crucial for successful webshop

  • 1.
    Logistics crucial forsuccessful webshop E-Retailing 10 & 11 November 2010 - Eindhoven GW ref. 9026X001/ML/th
  • 2.
    Page 2 Content 1. Intro1.Intro 2. Facts & Figures 3. Profile E-Retailing 4. Internet DC
  • 3.
    Page 3 1. Intro Mediaannouncements 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 compleet nieuwe 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.”
  • 4.
    Page 4 Content 1. Intro 2.Facts &2. Facts & FiguresFigures 3. Profile E-Retailing 4. Internet DC
  • 5.
    Page 5 2. Facts& Figures Internet 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 (27 Countries) France UK Germany Italy The Netherlands Belgium Spain Other 20 Countries Source: Eurostat Source: Eurostat
  • 6.
    Page 6 0% 10% 20% 30% 40% 50% 60% 2004 20052006 2007 2008 2009 2010 2011 2012 2013 %ofE-Shoppingindividuals 0 50 100 150 200 250 OnlineSales(BillionEuro's) 2. Facts & Figures Online 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
  • 7.
    Page 7 2. Facts& Figures The 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
  • 8.
    Page 8 2. Facts& Figures Popular 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% TravelTickets H olidays B ooks C oncert/Theatre/Festivaltickets C lothes ElectricalG oods C D s C inem a tickets D VD s M usic D ow nloads Source: EIAA
  • 9.
    Page 9 Content 1. Intro 2.Facts & Figures 3. Profile3. Profile EE--RetailingRetailing 4. Internet DC
  • 10.
    Page 10 3. ProfileE-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.
  • 11.
    Page 11 3. ProfileE-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 of order fulfillment Company Type 1 X X X X Company Type 2 X X Company Type 3 X X Possibilities of Order Fulfillment
  • 12.
    Page 12 3. ProfileE-Retailing Supply Chains of e-retail Traditional Retail Chain E-Retail Chains Suppliers/ Manufacturers Internet DC Stores PUDO Hub LSP DC’s
  • 13.
    Page 13 3. ProfileE-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
  • 14.
    Page 14 Content 1. Intro 2.Facts & Figures 3. Profile E-Retailing 4. Internet4. Internet DCDC
  • 15.
    Page 15 4. InternetDC Solutions Low Medium High Low High Medium Mechanization & Automation Level InvestmentsLevel AS/RSMiniload Conveyor systems Voice-pickingRF-picking Paper-picking Sorting System Pallet racking Shelf racking Lift/Paternoster Case flows with Pick/put-2-light Visual-picking Low Medium High Low High Medium Mechanization & Automation Level InvestmentsLevel AS/RSMiniload Conveyor systems Voice-pickingRF-picking Paper-picking Sorting System Pallet racking Shelf racking Lift/Paternoster Case flows with Pick/put-2-light Visual-picking
  • 16.
    M AKI NGSUPPLY CHAI NS YOUR COM PETI TI VE ADVANTAGE! Booth № 29
  • 17.
    Page 17 Groenewout Profile Groenewoutis 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 Chains Transparency • Business Requirements Consulting Service Portfolio Consulting Methodology STRATEGYTACTICALOPERATIONAL