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E-commerce is developing at a pace not seen in any other market. Where is this journey taking us, and what does it mean for logistics? Answers from Vanessa Holl, DB Schenker’s Vice President Global e-commerce Vertical Market.
Mrs. Holl, you and your team devote yourselves entirely to e-commerce. Why is this specialization so essential?
It is self-explanatory once you take a look at warehouse processes: picking is done on a single item basis; and also in packing, we no longer use pallets but cartons or plastic bags instead. Moreover, returns are a special issue. With goods like women’s footwear, the percentage of returns may go up to 50 percent. All this has to be taken into consideration, especially in solution development and with respect to IT. That kind of work requires experts, which we have in our team! Despite being part of the contract logistics division, we also develop solutions for the transport sector, which again is governed by specific requirements. And not forgetting: when your customers are specialists in the e-commerce sector, you have to speak the same language and know what’s driving the market.
So what trends are driving the market?
There are more and more peaks: days or occasions when the volume of orders is especially high due to vigorous discount campaigns. It goes from Cyber Monday, which primarily affects the electronics sector, to Black Friday, the day after Thanksgiving, which is gaining importance worldwide with all of the notable vendors getting involved. It’s up to us to manage it! Just take, for example, Singles’ Day on November 11, which has become extremely popular in China within a short period: in 2017, during the run-up and on the day itself, instead of a normal staff of 200, we had 2,500 people deployed at a warehouse that we operate on behalf of a fashion retailer. You need to hire and train people, equip them with scanners, adapt the processes in the warehouse and provide simple things like parking lots – and this takes months of preparation.
Another trend is personalization. What’s that all about?
On the one hand, that can refer to things like etching on electronic devices, special packaging or kits made up of various items. This is part of our value-added services offering. On the other hand, we see vendors increasingly striving for personalization in the sense of providing a shopping experience specifically tailored to each individual user. Instead of lengthy results pages, users in online stores are instantly offered products that might be of interest to them. The vendors’ aim in both cases is to get more users to place more orders – and as a consequence for us as logistics providers it means we have to work even faster and more efficiently.
What role does omni-channel play, the use of multiple retail channels?
More and more customers are demanding solutions for that! Take, for example, the Australian retailer for office supplies for whom we organize deliveries to numerous branches as well as the processing of online orders (click here for details). All that is handled by one and the same warehouse management system that prioritizes orders in such a way that same-day deliveries are processed promptly. But we also have to adapt to even more complex models, including those where end users place an order online and then pick their goods up in a brick and mortar store. Or those cases where an end customer can’t find a particular item of clothing in their size in a brick and mortar store and has it sent home from our warehouse. This leads to the need for a better inventory control which is key for a retailer’s stock.
What can e-commerce customers expect from DB Schenker in the future?
More than ever before, we will be keeping an eye on how we can create real added value. Through warehouses featuring innovative equipment but also through intelligent IT solutions. For customers who focus on omni-channel strategies it is imperative that they have a precise overview of their inventories at all times. That is why we are currently working on an order management system that will fulfill these particular requirements. Another project involves developing an interface to a company who has integrated more than 100 online marketplaces around the world. This solution will enable online retailers, who currently only operate on a national level, to venture into new markets.
Do you think we will ever reach a point at which the retail sector will more or less have migrated from brick and mortar to online stores?
I myself am an extensive online shopper, particularly when it comes to cosmetics and books – but even groceries. My supermarket offers a “Click and Collect” service, which allows me to order online and then pick up my order within a certain time slot. It’s incredibly convenient! But even in future, it won’t stop me from wanting to try on a dress in a store. Many people feel that way, too! That is why I’m convinced: e-commerce will take a lot more shares from the traditional retail sector. But there will always be room for a well-stocked store around the corner or in a pedestrian mall.
