transmodal 2015 ponencia e commerce norbert dentressangle 2015-eng_scl
TRANSCRIPT
What is e-commerce?
E-commerce is defined as “any exchange of goods or services that takes place via an electronic system”.
Within Norbert Dentressangle we widen this to cover B2C
activity:
where the next or last person in the supply chain is the consumer
Where the transaction includes products where there is a requirement for returns processing
This can cover the supply chain but for Norbert Dentressangle this
focuses on fulfilment – getting the products to and from the consumer
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E-Commerce - the big picture:
3 Sources : eMarketer 2013 study, includes travel and tickets bought online Forrester Research Inc.
• The market is forecast to double from 2013 at €951bn to €1,792bn in 2017
• About 1/3 of all sales are non physical items (eg: itunes) or services
• Online retail accounts for 8% of total retail in 2013, forecasted to top 11% in 2018. In UK Qtr4 2014 >20% of all retail purchases were online.
• Asia Pacific, Africa and Middle East are expected to severely outgrow maturing US and Europe in the coming year
Global e-commerce sales, in bn €
E-com sales growth by geography
UK, Germany and France largest markets, periphery
quickly catching up
• UK, Germany and France = 70% of European market
• UK is by far the leading country in Europe (€113bn sales and €12,7bn logistics expenses)
Western Europe growth ~ 10 %
• Strong growth expected in Italy and Spain due to a catch-up effect
• Spain & Italy expected to grow at 13-20% vs 9% for Western Europe over 2013-2015
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B2C E-commerce sales repartition in Western Europe
% of 2012 sales
Sources : eMarketer 2012 study
Growth
E-commerce in Europe
Europe: UK, Germany and France
largest markets, periphery quickly catching up
• Expected 2013-2015 CAGR : 19%
• Concentrated market : 20% of retailers generates 70% of sales.
• Very high average amount spent per online buyer (2nd behind UK)
• Italian tends to be brand specific
• Expected 2013-2015 CAGR : 13%
• Online buyer penetration among Internet users < 50%
• Leading share of E-com : travel & related services (36% of total) i.e. non-physical business
• Consumer behavior driven by price
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Italy Spain
Source: Transport Intelligence
• Expected 2012-2016 CAGR : 10,5%
• Development hindered by poor infrastructures, extended geography & predominance of cash transaction
• St Petersburg and Moscow areas = 70% of sales
• Online majors already showed their interest for attacking the market (eg: Amazon)
• Legal update: from January 2015 all personal data should be store on the Russian soil.
Russia Turkey
• E-commerce is set to dramatically expand : online sales grew by 50% in 2011
• Booming population (86M inhabitants in 2025) going along with average income increase
• Middle class is swiftly adopting e-commerce purchase habits
E-commerce in Europe
USA Market growth
• US 2013 e-commerce sales $256 bn
• 2010-2013 CAGR : 15%
• 2013-2016 CAGR : 12%
• PWC forecasts $500 bn market size in 2020 or 20% of nonfood retail sales
• Swiftly adopting mobile devices (25% of sales expected in 2016)
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US Retail E-Commerce Sales, in $ bn (excl. Travel & tickets)
Source: eMarketer
CAGR 13-16
The barrier between brick & mortar and online
retail fades away.
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• Online retail penetration varies across countries and verticals, leaving room for growth
• Online retail will keep ramping up as multichannel retail is growing more popular, m-commerce increases and financial processing is made easier
• Analysts forecast up to 40% of retail to be online in 2025
Sources : Centre for Retail Research, Euromonitor
Segmentation of key players in e-com
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Multi channel Retailers
• Bricks and mortar + e-commerce and / or catalogue sales
• Move to omnichannel
• Mix of early and late adopters
Pure Play – e-tailers (e.g. Surfdome, Amazon, ASOS)
• Rapid growth and globalisation
• Extension by some pure play into market place services (e.g. Amazon and Rakuten)
• Significant product range extension
Fashion Brands – e.g. Gucci
• Global reach
• Brand image critical
Manufacturers
• Limited entry and slow scale adoption – delisting by retailers is a key threat
• Asian manufacturers considering entry into new markets through e-com
Specialist “Consumer” Service Providers - e.g. SFR, Free, Weight Watchers
• Often multi channel (e.g mobile communications)
TV shopping channels – e.g. Bid Shopping
• Fast early growth but sales dependent on country culture
Consumer to Consumer – e.g. eBay
• Rapid growth – extending into providing channels for small start ups and small bricks and mortar retailers
E-commerce logistics : western Europe: a €40bn
market
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Local e-com logistics split
Western-Europe vs Eastern Europe - Market size
e-commerce fulfilment
• Logistics expenses are estimated to represent 16% of e-commerce sales
• This market includes in-house, 3rd party logistics, distribution and transportation
ND only operates on the outsourced B2C e-fulfilment segment
• Market definition : “the order fulfilment of physical items purchased by consumers, with the products being stored in warehouses, picked and packed by 3rd party contractors and delivered (by them of an independent couriers) to a nominated address or to a store for collection. Return handling is also included”
Sources : eMarketer 2012, 2013, Sambrook Report Feb 2014, Transport Intelligence report 2012
Total e-com sales (Europe ‘12)
264 € bn
Logistics expenses
16% of sales
Warehousing
4,8% of sales
e-commerce fulfilment
Scope of services
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Fulfilment and
returns
“Front end”
Web shop/web site
Carriers
Pick up Networks
Finance
Services
Customs
Mgt
Scope of Services
What is the supply chain?
Supplier
Supplier
Supplier DC
Retail Store
Retail Store
Retail Store
Consumers
Consumers
Consumers
Traditional Retail Supply Chain
12
Supplier
Supplier
Supplier FC
B2C/e-commerce Supply Chain
Consumer
Consumer
Consumer
Retailer
The 10 stage B2C fulfilment process
Multi channel
Almost 40% of the cost of selling on-line takes place after the
customer presses the BUY button. At that moment - when the visitor becomes a customer – the most crucial part of the relationship takes place. …order fulfilment, delivery and product returns are the largest gaps in e-commerce. These important functions can make or break customer relationships, profitability and future business.
Managing the fulfilment and returns activities are critical to ensure success and support growth in this expanding market
e-fulfilment – understanding the difference
The provision of e-fulfilment logistics requires an understanding of the market and the importance of:
• The “in-room” experience and product presentation • Creating the right operational culture • Returns handling and disposition • Forecasting and capacity planning • Communication and proactivity • Customer retention • Brand reputation
e-fulfilment solutions have to be:
• Flexible – to meet peaks and product range changes • Scalable – to accommodate growth and product range
extension • Yet retain the culture and image of the Brand
Above all they have to deliver certainty…
e-fulfilment – delivering the fundamentals to be successful
The item showing as in stock is actually IN stock
Once I have ordered it, it is mine and on its way
The right item will be picked, packed & shipped
It will arrive in the timeframe I have chosen
Delivered to the place specified & instructions followed
It will arrive well packaged and un-damaged
Gifting requirements will be correct and well presented
The returns process will be easy, efficient & effective
My returns credit will be processed quickly
‘I want to be Certain that…’
“Quality of packaging and overall presentation of my
online purchase is important to me / affects my
purchasing decisions.”
50% of UK adults agreed with
this statement
Customer survey: results
“Late ordering cut-off times for next-day
delivery are important to me.”
33% of UK adults agreed with this
statement
Customer survey: results
“I would not give a retailer, who
incorrectly fulfilled my online order, by sending the wrong product, a second chance.”
25% tend to, or strongly,
agree
Customer survey: results
• Linking the company/brand and the customer in a relevant and positive way
• Constant improvements sought on time to delivery and place of delivery to match personalised needs
• Guaranteeing service commitments (product integrity / control, customization, packaging, delivery, ...)
• Meeting the challenges of loyalty under strict cost controls
e-fulfilment services carry the brand and business image in an immediate way
Customer survey: conclusion
Driven by consumers……..
Increasing delivery options – timing and location Direct to home Nominated address Click and collect Drop off point/lockers Requires multiple carriers Variation by country based on availability of services
Shorter delivery times Driving later cut off FC close to carrier hubs Same day/1 hour delivery options trialled for major cities
Free returns with faster credit cycle
Higher level of stock availability Stock outs leading to lost short sales and customers
Peak activity volumes – linked to delivery times
e-fulfilment – trends
Driven by “e-tailers”
Planned peaks Last order by…. Sales and promotions
“Pop Ups” for peak operations Direct from manufacturer Seasonal operations
Market place trading – “sold by and fulfilled by” options Led by Amazon and Rakuten by followed by some retailers
Captures data/allows pricing options/utilises capacity Pure marketplace traders emerging
Own label and range expansion– e.g. Amazon Essentials/Basics
Increasing supply chain control: Inbound Carriers Technology and automation
e-fulfilment – trends
c.10% of Norbert Dentressangle’s turnover by the end of 2014
Over
68 million parcels / 2-man items managed per annum
Over
213 million direct to consumer items processed per annum
eFulfilment operations since
2003
Norbert Dentressangle - A leading outsourced B2C fulfilment provider
+30eFulfilment
/ returns locations
23million
returns items handled per annum
…with a full range of services to support the
growth of our customers online business…
Norbert Dentressangle solutions allow FLEXIBILITY across the eFulfilment Supply Chain
… and experience in handling a wide variety of
products.
Fashion & Textiles to Books
Mobile Phones to Garden Furniture
Toys & Games to Surfboards
Consumer Electronics to Cosmetics
In the UK eFulfilment activities account for c.25% of the Norbert Dentressangle Logistics WORKFORCE, in Europe eFulfilment activities account for 10% of the turnover
A European eFulfilment specialist since 2003…
c.10% of Norbert Dentressangle Logistics turnover by the end of 2014
Over
68 million parcels / 2-man items managed per annum
Over
213 million direct to consumer items processed per annum
eFulfilment operations since
2003 30+eFulfilment
/ returns locations
23million
returns items handled per annum
What makes ND different?
Existing European scale: ND is already
one of the largest players in this field
Continuous innovation & value add:
capacity to handle higher volumes, range
changes and peaks and deliver ongoing
cost improvements
Focus on the consumer experience:
End-user satisfaction at heart
Norbert Dentressangle guarantees CERTAINTY to its clients as the critical link between our customer and the consumer
What makes us different?
This is not a standard 3PL offering
“Certainty” in our service provision is key… the product ordered is available, picked correctly, well
packaged and delivered to the right place at the selected time
We recognise fulfilment as a
different type of logistics…
…but with established standard core principals…
…that can leverage our expertise in multiple sectors especially in fashion and retail
… based on exceptional consumer experience