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Welcome to Clipper Northampton 3
Tony Mannix, CEO
Retail Logistics Evolution and Innovation
Tony Mannix, CEO
Returns Management – The new battleground for retailers
Evolving solutions for retail
UK’S
LEADING
RETAIL LOGISTICS
SPECIALIST
Returns Management – The new battleground for retailers
Evolving solutions for retail
Evolving supply chain needs
The only constant is change
The customer is forcing Retail change
Evolving supply chain needs
*JDA and Centrino Christmas Customer Pulse Report
2017
Optimal online capability is essential
Evolving supply chain needs
The customer is evolving and is less tolerant
Evolving supply chain needs
19% of online Christmas
customers shopped at
alternative retailers due to
stock availability and
delivery time constraints
“Black Friday has now
firmly established itself in
the UK and is here to stay.
Sales increased yet again
in 2016 with the event now
expanded over multiple
days and moving
increasingly online.”
Paul Martin, Head of Retail, KPMG
in the UK
78%
of online Christmas
shoppers said they
would likely switch to
an alternative retailer
as a result of a poor
online Christmas
shopping experience.
of online
Christmas
shoppers stated
they had
experienced
issues with their
online purchases.
32%
*JDA and Centrino Christmas Customer Pulse Report
2017
Black Friday is now “Black Four Weeks”
Black Friday – a clear example of rapid change
Evolving supply chain needs
THEN NOW
The changing Retail process
Returns Management – the new battleground for Retailers
Then Now
Returns experience as critical as the purchase experience
Retail returns – now a core activity
Returns Management – the new battleground for Retailers
∙£600M∙
1. The Financial Times, UK retailers count the cost of returns, January 2016
2. Clear Returns’ ‘Why returns is the new battleground’ report, data from 2015
IN 2015, £600M WORTH
OF PRODUCTS BOUGHT
OVER BLACK FRIDAY
AND CYBER MONDAY IN
THE UK WAS TIED UP IN
RETURN LOOPS BY THE
MIDDLE OF DECEMBER
1
∙30%∙ OF MULTICHANNEL
WOMEN’S FASHION
PURCHASES ARE
CURRENTLY
RETURNED 1
2
*
1. Business2Community, E-commerce Product Return Statistics and Trends, April 2016
2. Business2Community, E-commerce Product Return Statistics and Trends, April 2016
3. Metapack Consumer Data, 2015
Retail returns
Returns Management – the new battleground for Retailers
∙92%∙ ∙67%∙ ∙51%∙ OF CONSUMERS
WILL BUY
SOMETHING
AGAIN IF THE
RETURNS
PROCESS IS EASY
OF SHOPPERS
CHECK THE
RETURNS PAGE
OF A WEBSITE
BEFORE MAKING
A PURCHASE
OF CONSUMERS
THINK THE
RETURNS
PROCESS IS TOO
COMPLICATED
1 2 3
PwC
PwC
Supply chain implications
Omni-channel supply chain – sub-optimal
Returns Management – The new battleground for retailers
Returns – single largest source of inbound stock
Additional DC pressure
Little visibility
Reduced compliance
Space and time hungry
High customer expectation
driven by slick online ordering
process
PwC
Omni-channel supply chain – re-optimised
Returns on returns
Clipper developed
solution interfaces
with your retail/online
systems
Retail focused Click & Collect
The new model
Click & Collect – customer experience
The new model
*JDA and Centrino Christmas Customer Pulse Report 2017
Fully integrated into the retailer on-line systems
Full track & trace
Next day delivery against a timed delivery schedule
Parcels sorted into cages at sorter hub – parcel to cage “parent & child” association
to ease store handling/storage and efficiently provide in-store system updates –
complete transparency throughout
Able to fully integrated with in-store systems to provide enhanced customer care at
store location
Ease of returns via the network to provide potential for same day “Boomerang”
processing
The Click & Collect solution was developed to enhance carrier solutions by creating a retail
focused operational process
Returns on returns
The on-line sector
is growing
Click & Collect is
growing
Intolerance of
poor service is
growing
Time pressure is
growing
Retailers want to provide an
integrated store and online
experience
Retailers want brand protection
and loyalty
The combined Click & Collect network and Boomerang provides customer
care benefits & the rapid release of working capital - getting stock back
into inventory at pace.
Click & Collect and Boomerang
The new model
*JDA and Centrino Christmas Customer Pulse Report 2017
What next?
Mechanisation, automation and collaboration
What next?
The retailers dilemma…. “The required shift to
increased automation
will necessitate
significant investment
at a time when cash
flow is impacted by
depressed margins”
Dom Carter, Head of Retail Working Capital
Management, KPMG
A Clipper “shared use”
opportunity….
Four emerging retailer themes PWC - 10 Things You Need To Know About Total Retail
What next?
Simplicity There is an increasing need
for retailers to maintain
simplicity throughout the
ever-evolving customer
journeys and beyond.
Connection Customers now demand
more personalised
connections…exceptional
service needs to go beyond
the transactional.
Innovation
With retailers in the world
racing to innovate, a lack of
investment in innovation is a
risky business.
Trust
Uncertain times have led
customers to rely on retailers
they know and trust
PwC: 10 things you need to know about Total Retail
It used to be simple…..
Complexity creates
opportunity….
Digital commerce needs a digital supply chain
What next?
Linear supply chain
Digital supply chain
• Helping retailers face the future with confidence whilst protecting their brand
• Collaboration – “Clipper shared use”
• Mechanisation & automation – cost effective, modular approach
• “Prime” it’s not just about Amazon
• Efficient inventory management via Clicklink & Boomerang
• UK & International
What next?
Clipper – the evolution continues…
Clipper “on-line” In Action - 2016
Evolving Supply Chain Needs What next?
Clipper ’online’ in action – 2016
• During 2016 Clipper:
despatched c55m units of e-comm volume
& processed over c40m returns
• Clicklink, our new network, delivered into the stores of our retail customers over
3m parcels in the pre Christmas trading period 2016
Thank you
Operations
The Changing World A Retailer’s Perspective Dino Rocos Operations Director, John Lewis
Operations
Retail “A Time of Change”
“Personal”
“Mass”
“Mass Personalisation”
Operations
Multi-format and Omni-Channel Retailing is the norm
Operations
Online Sales Share by Value (£)
10% 12%
14%
17%
21%
26% 29%
33%
38%
42%
2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17
Operations
Online Shipped Units
15%
20%
31%
41% 45%
48% 50.2%
2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17
10,997,414
28,038,013
21,703,595
18,640,935
14,308,840
32,622,882 35,883,471
Operations
The modern customer is demanding
I want speed
I want to change my mind I want convenience
I want choice
Operations
Omni customer interactions
Advice
Returns
Fulfilment
Transact
Operations
This complexity brings cost
Shop replenishment Omni-channel fulfilment
Fulfilment CoS continues to grow
Variable cost
Semi-variable cost
Fixed Cost
Operations
To win we need efficiency
Consolidation
Less Stock
Lower Overheads
Automation
Productivity
Operations
Retailers need to be clear about where they add value
Differentiated Standardised
Keep in house Collaborate
Unique Product
Lasting Relationships
Trusted Services Trunking Click and Collect
Dispositioning Returns
Operations
Clicklink is collaboration in Action
Conceived as a shared
multi-user operation, not
dedicated to John Lewis
Encouraging others to take
advantage of the benefits and
drive greater value for
Clicklink
Partnered with Clipper to
bring operational expertise
and act as an ‘honest broker’
Operations
The future will bring more change in how we work
Growth in network level
sharing and collaboration Greater use of traditional
shared user services
Sharing more complex
capabilities such as automated
warehousing and fulfilment
John Lewis is pleased to be leading the way
Others will follow as the challenges of omni-channel retail continue grow
Northampton 3 – Site Overview
Background
Clipper and JLP have worked together in partnership for some time:
Pre-Retailing in Hornsey / Enfield since 2001
E-Commerce fulfilment in Ollerton since 2010
Started trials re Clicklink via Waitrose in 2015
Set up the Ancillary Distribution Centre (ADC) in 2016
Created a joint venture in 2016
John Lewis ADC and Clipper:
John Lewis and Clipper signed a 10-year commercial partnership re the ADC
John Lewis wanted to locate the ADC close to their Magna Park campus
John Lewis and Clipper agreed that a shared use facility model was the best way to support growth
44
Clipper Northampton 3
15 miles
to Magna
Park
Site
Agility with ability
Secured and fitted-out Northampton 3 to plan
Successfully completed 5 * start-ups - all during their peaks
Operated 3 * start-ups whilst the site was under CDM
Designed and implemented JDA Dispatcher to plan
Successfully partnered with professional agency staff providers
From operational start in July 2016 the site team grew to 750 in peak
RETURNS PRE-RETAIL INDITEX CLICKLINK FORWARD ORDERS
Scale of build
Northampton 3:
Site acquired on 21st March 2016
15m height to eaves at haunch
30 loading bays, of which 8 support double-deck trailers
c5000 high-bay pallet locations
38 trailer parking spaces in 50m yard
224 parking spaces for employees and guests
Available and potential space
Warehouse slab - 286,000ft2
Main and Hub office - 23,500ft2
Current 2 * mezzanine - 283,000ft2
Potential 2 * mezzanine - 281,000ft2
Potential mezzanine extension - 158,000ft2
1,031,500ft2
29-Mar-17
Inditex Brands
Strategic
Supports Inditex decision to increase brand awareness in the UK
Provides a foothold in the UK to support store and online growth
Clipper and Inditex
Proven 3PL credentials – set up and operate Zara e-comm in Clipper N2
The site operation has the flex to cope with the planned growth
Retail focused Click & Collect Richard Ball
Delivered by
What is Clicklink?
Retail focused logistics solution
- Retail logistics
- Established network
- Volume
- Retail knowledge
50%
Joint Venture
Established July 2016
50%
Why?
10% 12%
14% 17%
21%
26% 29%
33%
38% 42%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Online % share of trade
56% in-store collect
… for John Lewis
… for Clipper
Network expansion
Additional client services
Low volume/high frequency market
Clicklink uncovered
Current network
SWAD HUB
N’HAM HUB
CLIPPER OLLERTON
NORTHAMPTON
IFORCE
BLAKELANDS
MAGNA 1 & 2
GLASGOW
SWADLINCOTE
NORTHAMPTON
HARLOW
LONDON 2
BRISTOL
Track & Trace
DC’s and Depots Transportation Stores
Customer order tracking
Hub to hand visibility
System Integration
Light touch for customer
Single interlinked system throughout
Back of house interconnectivity
Click & Collect – The Carrier Solution
Network
Home delivery parcel
network
Complicated routing
structure
Little or no value add
Technology
Low visibility
Multiple integrations
Process
Irregular and split
deliveries
Abandoned deliveries
Loose parcels
Clicklink – the retail focussed solution
Network
Focus on a C&C
specific solution
Speed and efficiency
Returns loop
Technology
Mnetics solution to
provide tracking and
maximise storage
Parent / child
scanning
Process
Timed deliveries
Cages arrive “retail
ready”
Focus on branch
compliance on inward
scan
Timed deliveries by store (1 hour window)
Allows for cost effective planning of store staff hours
Closed loop for delivery media control
Provides opportunity to utilise totes
Collection at same time as delivery
Consistency of approach for stores
One stop solution for mainland UK
Single point of contact for customer service
Operational benefits
Immediate:
Handling of inter-store transfers
FOC removal of recycling
Broader evening and out-of-hours opportunities
Hanging garment handling
In development:
Direct label integration with WMS
Integrated Boomerang solution
Value-added opportunities
Thank you
PwC
Boomerang™
High level Boomerang process
Returns on returns
Time criticality
Returns on returns
• Refunds back to customers need to
happen within hours not days
• Customer service priority – returns
process is last customer contact
point, leaving a lasting impression
Electrical Returns Management
Returns on returns
• Returns process managed by one solution “Boomerang” from the customers order
being returned to the DC to the final disposition route of the stock
• Streamlined stock handling through pre-determined sampling decisions.
• Opportunity to make proactive decisions from increased stock visibility.
• Opportunity to impact costs and lost sales by cutting down handling time.
• Rapid release of inventory to allow sale at full margin
Summary
Returns on returns
Systems enhancements
Returns on returns
Clipper has been working with JDA to enhance returns receiving to:
• Improve the returns process flow through the system
• Allow pre-defined rules to drive product down the most efficient route, removing the reliance on
users
• Introduce product images at key points
• Increase the number of product images available, including web links to retailers web platforms
• Introduce product information and notes at key points in the returns process
• Enable JDA to automatically set an order to shipped when imported to enable returns receiving
• Capture key sampling data for operational management and buying teams
Returns receiving
Returns on returns
When an order is scanned for returns receiving it will be displayed with a product image:
Returns receiving
Returns on returns
The user can click on the thumbnail and a bigger image will appear:
Sampling
Returns on returns
Any value added services can be selected when sampling the item:
Servicecare are an eBay and Amazon strategic account managed
partner
• Lower rates, white labelled stores
• Access to marketing, advertising funds and campaigns
• Product remarketing
• Up to 85% of RRP achieved
• Multichannel flexibility
• Social media capability
• In-house marketing
• Email campaign management
• Electrical-deals/Genesis provides anonymity.
• Insured warehousing with pick, pack ship / drop ship capability
• Onsite retail outlet
• Dynamic listing and customer services provided
• Full MI capability
Asset recovery
Modular Approach
Wrap Up
Wrap-up
Tony Mannix, CEO
Some market statistics
Average weekly spend online in January 2017 was £1billion, an increase of
10.1% on January 2016
The online market makes up over 20%, of total non-food sales
The returns process can cut retailer profits by 10-20% each year
Retail sales in Great Britain: Jan 2017 by Office for National Statistics, February 2017
Online growth rate unchanged in February by BRC, March 2017
The reverse logistics report: How retailers can save money by making returns smoother in the e-commerce age by Business Insider, October 2016
Wrap-up
Some market statistics
It is expected that by 2025, click and collect usage will double, and generate 10%
(£23bn) of UK retail sales.
How has Click and Collect evolved, and is it still in high demand? By eConsultancy, January 2017
Wrap-up
• The retail sector is continuing to evolve to meet changing customer expectations
• Clipper has total focus on the retail sector and is ideally placed to help with innovative solutions/ideas to drive profitable change
Clipper – The Retail Solutions Provider
Summary
Wrap-up
Thank you for listening