Deliver showcases sustainability, same-day delivery and last mile challenges – Retail Times
Sustainability and circularity is the new business imperative, according to Marissa Selfa, CEO at lifestyle brand North Sails.
Opening the key note sessions at Deliver (8-9 June 2022 in Amsterdam), Europe’s premier community for e-commerce and logistics, Selfa called on delegates to do business in a more sustainable manner.
With 20+ years experience as a fashion and retail executive, Selfa said sustainability and circularity were relevant for all businesses, not least fashion, which is the second most polluting industry in the world.
Selfa highlighted a number of alarming fast fashion industry facts:
- It is the second largest clean water polluter and the second largest consumer of water
- It accounts for 10% of global emissions and creates 80 billion garments a year, 400% more than 20 years ago
- One garbage truck of fashion items is burned or dumped every minute, creating 21 billion tonnes of waste every year
- It takes 2,500 litres of water to produce one cotton t-shirt
The consumer inputs are equally grim:
- Consumers wear garments seven times on average and they wear just 30% of their closet
- They create 35kg of textile waste a year
- Washing puts 500,000 tonnes of micro plastics into the ocean and 35% of all micro plastics come from washing clothing
“We need to start a net zero journey but we should look for progress, not perfection,” advised Selfa.
Selfa suggested companies reinvented the way they do business and their business models.
She told delegates some fashion companies produced 50 collections every year, while the Chinese brand Shein adds 1,000 styles per day.
“That’s a business model, which is not sustainable. We need to be more responsible,” she said.
Selfa recommended consumers “buy less and buy better” and from companies with the right purpose and values.
She also questioned routes to market and promotions, which encouraged people to buy more of what they don’t need, which only ends up in their closets and remains unworn or goes to landfill.
Selfa shared North Sail’s sustainable development goals to become an ‘Ocean Positive’ brand. The company’s commitment to ocean conservation includes planting new coral reefs. More than 90% of the world’s coral reefs are expected to die by 2050, which would mean that 25% of the marine world would disappear.
Sustainability centres on people as well as the planet, Selfa added; and that means paying people a living salary or wage.
Selfa recommended the fashion industry moved from a linear business model focused on raw materials, production and purchasing to a circular model, where raw materials are designed into garments, retailed, consumed, collected and recycled.
“We need to phase out substances of concern, increase clothing utilisation and improve recycling.
“Sustainability is inconvenient but it forces us to look at business in a different way,” she concluded.
Sustainability is necessary to survive, says Maison Alaia executive
Sustainability is no longer nice to have, it’s necessary to survive. That’s according to Caterina Occhio, CSR and sustainability advisor at luxury fashion house Maison Alaia.
Occhio referenced the Extended Producer Responsibility requirements coming into force in 2024, which will require a producer to take responsibility for the lifecycle of those products they put into the market; and suggested any business that asked for loan without an ESG report in two years time would be knocked back. And, she reminded delegates Gen Z were not only sustainability aware they were sustainability native.
Occhio advised businesses made sustainability an asset or USP and that they included the opportunity to select sustainable options online.
She credited North Sails for its ocean focus. “It makes sense. Sustainability must be aligned to your core strategy and values,” she maintained.
And, Occhio urged delegates to “move away from charity”.
“It’s not sustainable – longterm it does not help the people you are supposed to help,” she claimed.
Like Selfa, Occhio said sustainability must be focused on social concerns as well as environmental ones and urged business to consider their impacts on people.
Occhio suggested fashion could be used to improve the lives of people via social procurement, for example. “It’s a solution for combining economic growth with being more socially sustainable,” she said.
Occhio showcased the See Me brand that produces heart shaped jewellery and accessories, a business she founded to create jobs for women survivors of violence.
It demonstrates that sustainability can be beautiful, meaningful and profitable, she said; stressing that sustainability has to make business sense.
Danone goes on journey of change and makes a difference with diversity and inclusion
Danone’s global head of diversity and inclusion, Putri Realita, presented the company’s diversity and inclusion journey it launched six years ago and she provided two helpful definitions:
- Diversity is getting invited to the party
- Inclusion is getting asked to dance
Realita said Danone’s diversity and inclusion progress was dubbed ID or Inclusive Diversity and the business wanted everyone in Danone to bring their ID to work.
The business case for ID is compelling, she said; and referenced a McKinsey report, which showed more diverse and inclusive organisations were also more profitable.
Businesses looking to recruit top talent should also consider that future employees will be looking at how companies are addressing diversity and inclusion and that this interest has been heightened due to the Covid pandemic. There is also a growing expectation from both consumers and investors that companies address diversity and inclusion with their organisations and communities, Realita added.
Danone’s diversity and inclusion journey began with an assessment of how the business looked at the start. This spanned gender and nationality data plus employee surveys to gauge how they viewed the business. Customers and investors were also asked to provide feedback.
From there, Danone began to build KPIs. According to Realita, it was fundamental that diversity and inclusion was viewed as a business topic, not an HR topic.
Implementation was three-way: top down, bottom up and glocal. It included partnering with HeForShe to empower 400 Inclusive Diversity champions in the business in 2017, employees that implement and communicate on gender equality initiatives locally.
Also in partnership with HeForShe, Danone launched its Global Gender-Neutral Parental Policy, which aims to offer a consistent standard of support to all parents-to-be employed across the world – 100,000+ employees across 55 countries.
The fifth pillar in Danone’s ID journey is to measure, track and improve, Realita told delegates.
This has helped the business to increase the number of women directors and executives within the business, as well as grow the number of directors and executives from underrepresented nationalities.
How retail and FMCG companies can adapt to D2C
How retail and FMCG companies can adapt to D2C and create the optimal customer experience was the focus of a Rapid Fire Debate at Deliver featuring Ashwani Nath, global head of e-commerce at Geodis, a plug and play specialist for e-fulfilment, last mile and returns; Tony Sciarrotta, executive director at the Reverse Logistics Association and moderator Nathan Kelleher, co-founder and partner at True Altitude.
As D2C continues to grow, technology has been the greatest leveller and has enabled new start ups to successfully establish themselves in this space, said Nath. “They are few barriers to doing business and the start up companies are very agile,” he said.
As a result, retailers and FMCG brands face increased competition. This was heightened during the pandemic with retailers including Primark offering zero e-commerce and many occupying a middle space by offering multiple brands but over separate web shops.
Nath suggested brands such as Colgate established umbrella websites for oral hygiene, for example, to feature multiple brands on one site in order to challenge the start ups.
For Sciarrotta, it is critical retailers and brands are omni-channel and play in all spaces including BOPIS (buy online, pick up in-store) and BORIS (buy online, return in-store.
“Geodis helps brands get to the customer and you can’t just do it one way anymore,” he said.
Kelleher cited the non-alcoholic brand Lyres as a new strong omni-channel player. While pre-pandemic the brand had no e-commerce business, today its online sales exceed its on-trade revenue.
The trio debated returns, which are becoming a major cost to the whole supply chain, according to Nath.
“There are lots of providers for the front end but they are lacking the physical touch and feel aspects – the ability to print off a label, pick up the parcel and make the return,” said Nath.
Plus, it takes 40-48 days on average in Europe for a refund to be issued, he added.
Sciarrotta revealed the returns market in the US was worth in excess of one trillion dollars and 76% of consumers have made a return simply because the customer experience did not meet their expectations. He also told delegates US companies were providing customers with credit as soon as they have have made a return because they want to encourage them to spend their money again.
Delivering on the customer experience is key, said Nath. “It’s the job that needs to be done while logistics are the tools for the job.”
D2C players also need complete visibility of their inventory and the ability to accurately forecast and win ESG benefits, Nath added.
Sciarrotta suggest excessive ordering, amounting to $761 billion (source: NRF) in retail returns, had destroyed both forecasting ability and stock visibility and had created an unsustainable business model.
He also revealed how some brands help to limit their return rates. LG, for example, empowers drivers to offer discounts on big ticket items, which may have been damaged in transit to encourage customers to keep the items. The company will also call customers ahead of a scheduled delivery and ask them to remeasure their door to ensure the item will fit.
Making rapid delivery cost effective and how Lush cracked the code
Customers are willing to pay more for same-day delivery and it’s becoming more important than next day delivery for customers at Lush, which has rolled out the service to 50 stores in fewer than five months.
Those were the top takeaways from a Workshop Studio session at Deliver featuring Matthew Blackhurst-Evans, digital project lead at Lush; Tom Anastasi, director of sales Northern Europe at delivery and fulfilment platform Bringg and Graham Smith, strategic account director at last mile delivery network Gophr.
Anastasi revealed the latest delivery trends from the Bringg Barometer, which interviewed 500+ enterprises across the world. It found 99% of businesses have an expectation to deliver a hyper local service over the next three years but in the beauty industry only 6% were able to offer that service today.
However, there was a 20-30% increase in conversion rate if a company was able to offer same-day delivery and 68% of consumers stated they would be willing to spend more on same-day delivery.
However, there are a number of challenges too, Bringg found. Only 61% of companies are able to offer same day tracking and visibility, 44% of businesses work with multiple fulfilment technologies and 49% state the top challenge is the travel time between pickup and drop off points.
Blackhurst-Evans said Lush recognised those challenges but admitted that the Covid pandemic had “definitely done a number on us as a high street and bricks and mortar retail group, since that’s where most of our business comes from”; as well as being a retailer who is very much focused on the in-store experience and customer engagement.
With stores closed, customers did move online to Lush’s e-commerce platform and, in order to provide additional services when stores reopened, Lush implemented new local solutions including digital forms, which customers could use to request products that may be available in store, remote payments and local couriers etc. However, since services were operated independently and the processes were largely manual, there was no order visibility or reliability in the system.
Coming out of the pandemic, Blackhurst-Evans said there was a real energy for improving the solution and still providing the same-day delivery options plus click and collect but at a higher level.
Providing a customer focus is key, the panelists agreed. For Lush, which operates one centre for fulfilment and e-commerce in Poole, working with Bringg and Gophr helps to centralise processes and enables stores to focus on operating on a local basis and delivering on that customer experience.
E-commerce is also enabling Lush to reach new customers and is increasing the business potential, Blackhurst-Evans added.
Core online purchasing comprises bath products, gifts, make up and skin care. Until now, next day delivery has been sufficient for these lines but it’s not any more, said Blackhurst-Evans.
As digital project lead at Lush, Blackhurst-Evans has been building out stock systems and integrating with its delivery partners.
“Until this year we had no view of the stockholding in all our shops. In order to offer your customer click and collect and same-day delivery, you have to have that level of accuracy,” he said.
Lush prides itself on being a business heavily focused on ethics, Blackhurst-Evans told delegates. Its e-commerce platform is on an ethical server set up, so uses green energy, for example.
“Our brand values are really important and we wanted to make sure our online offering, when we do this e-commerce set up with click and collect and same-day deliveries, feels as close as possible to coming into store.”
Lush didn’t want that five star store experience to drop if a customer used a delivery service or a courier, Blackhurst-Evans said.
“Whoever brings that parcel to your door is a representative of Lush, they are an extension of you. So that on-demand fulfilment had to be high level,” he said. “The driver at the door might have Gophr written on their top but they are still going to be seen as Lush.”
Working with Bringg, meanwhile, has enabled Lush to maintain the online momentum it picked up during pandemic and sustain that speed.
Lush launched its last mile strategy at the beginning of the year and has moved fast.
According to Blackhurst-Evans, Lush’s priority was providing an experience and that the delivery service is part of that experience. It also wanted to ensure its retail operations and e-commerce business felt united and were not competing with each other.
With one in three shoppers reported to have researched products online while in store, Lush is ahead of the curve with Lush Lens, an app which enables shoppers to scan products while in-store and win information about an item and how to use it. This type of technology provides other use cases for those people who are unable to leave the house and get into store to see products.
Blackhurst-Evans told delegates Lush has an anti-social policy and has come off four major platforms. “It was felt the business was about making people relax and disconnect from technology,” he explained.
Lush has focused on three key areas for driving brand differentiation and loyalty: improving the CX, improving efficiency and growing revenues.
Lush was able to roll out same day delivery to 50 stores in fewer than five months, working with Bringg to determine its locations and the radius it could cover and then engaging with Gophr on last mile delivery.
Orders are coming in, despite being in only a ‘light phase’ of marketing, although the service is now live on the Lush website. One of the highest number of same day delivery orders are delivered from a London store, close to a number of offices where people realise they need a last minute gift for the evening.
While same-day does cost more, shoppers are prepared to pay more for speed, said Smith at Gophr. And, if it’s positioned and built correctly, retailers can build that value in since shoppers who chose same-day will spend more and blend the same-day delivery cost into their total online shop.
Blackhurst-Evans agreed and urged delegates not to shop with their own wallet or pocket in mind or dismiss the willingness of people to pay for something like a same-day service.
Costs of same-day are continuing to fall as more retailers get on board, Smith added.
While Lush is currently focused on rolling out same-day delivery in the UK and Ireland, Blackhurst-Evans said the retailer wanted to put it in every store and there was no reason it could not fly around the globe. The business is also keen to to ensure same-day is delivered in a sustainable way and is focused on eco aspects such as electric vehicles and bikes.
“It’s not just focusing on speed, it’s also the experience of that parcel and experience the customer feels and that they know their contribution to reducing carbon emissions. Those are the important things,” Blackhurst-Evans concluded.
Gophr helps to orchestrate last mile delivery for major retailers
Executives at last mile delivery network Gophr revealed how they were working with major UK retailers to provide same-day delivery and the benefits it is bringing to businesses.
Gophr CEO, Seb Robert, said it was his company’s mission to enable all businesses to have access to great delivery and couriers, generally with the last mile.
The company provides a same-day service for top retail brands including Asda, Boots, Hello Fresh, Co-op, Selfridges and Screwfix.
According to Robert, same-day is a growing area and forecast to double over the next four years, largely by cannibalising share from next day. There is also a growing awareness among retailers of the need to compete with Amazon Prime and Prime Now, he said.
Gophr’s aim is to help retailers meet the requirement for same-day and then to try and reduce costs as volumes grow.
This is key since price or the cost of same-day is the number one issue for supply chain directors. Other challenges of same day include coverage, the technology stack plus in-store operations – training staff in terms of pick and pack in order to get products ready for a courier.
Gophr advised retailers to consider four key questions regarding same-day implementation:
- What problem are you solving for the customer? Eg do you need to deliver a gift super fast
- What is going to get internal buy-in ie more conversions?
- Where will delivery be from and where to ie from a warehouse, dark store or retail store and will it be nationwide or tested in an area first in order to see what works?
- How do you tap into customer demand?
Gophr showed how same-day was working for Screwfix in these four areas:
- Express delivery in 60 minutes or less means Screwfix customers don’t need to take time off site, which is money saved
- Screwfix has secured an industry-first and is providing the fastest non-food delivery service in the UK
- Deliveries are from stores to customers nationwide. The service is currently available from 275+ stores but the footprint is increasing
- The service is focused on high frequency customers and has an API integration directly into the Screwfix app
In terms of marketing and promotional activity for same-day, Gophr revealed that Screwfix was also contacting click and collect customers to encourage them to switch to same-day.
Gophr also showcased its work with HelloFresh, where it helps to provide a multi-drop versus express delivery service.
The same-day delivery service for HelloFresh provides:
- Food delivery which customers can rely on
- In terms of the business case, it has reduced the number of fail rates
- Product is shipped from a delivery lorry to a West London hub where it is sorted and shipped
- The service has helped make subscriptions more reliable
Gophr said HelloFresh has subsequently got rid of its in-house fleet and Gophr now handles all deliveries within the M25 with co-branded vehicles.
While same-day delivery from stores flourished in grocery during the pandemic, other industries are now looking to replicate the service, Gophr said; and it gave a further possible use case for a sportswear company looking to generate some hype around a new fashion drop.
Here same-day can help to:
- Create hype
- Raises brand awareness
- Provide delivery from flagship stores
- Enable the retailer to host live events
DHL lifts the lid on changing customer preferences on delivery
DHL revealed the changing customer preferences for delivery at Deliver in a shared presentation with Danish family clothing company Bestseller.
In its recent consumer survey, conducted across nine European countries, DHL found 70% of consumers stated the carrier has some influence on their purchase decisions.
Asked about their last mile preferences, home delivery remains dominant for 73-75% of consumers. Lockers or service points are preferred by 22% of consumers with 13% favouring lockers and 9% service points. Delivery to a neighbour is the preference for 5% of consumers.
Despite these overall trends, there are nuances among the countries surveyed, DHL found.
In the Czech Republic, for instance, 30% of consumers prefer delivery to a service point, while in Poland the preference is delivery to lockers. Germany, Spain and Austria, meanwhile, all favour door step delivery and shoppers in Sweden favour a mix of shop delivery and lockers.
DHL’s research found shoppers were willing to make more sustainable choices regarding delivery with 17% on average willing to switch to collection and nearly a quarter – 24% – willing to pay more to do so.
For Bestseller, parcel lockers are viewed as a stepping stone to more sustainable deliveries, especially with rising fuel costs. However, the retailer said it was unwilling to promote parcel lockers as a more sustainable option since it could not be certain how far consumers travel to collect or return their online orders.
Patagonia enhances post purchase customer experience with ParcelLab
Patagonia shared how it has partnered with ParcelLabl to improve the customer experience post purchase. The tie up has helped improve repeat purchase rates, enabled the brand to better support its customer service teams and given it ownership of its customer communications.
Julian Krenge, founder and CTO at ParcelLab, said his company’s aim was to bring brands and people closer together in order to provide a delightful experience for the customer, to be proactive and helpful and personalised.
“There is an increase in customer expectations about how delivery is happening ie communications,” he said. “And that includes post purchase – customers want to be in control and in charge. However, in order to meet those requirements, retailers are having to become tech companies, which increases the retail complexity.”
Patagonia revealed that, up until last autumn, once customers pressed ‘pay’ and it had sent out a shipment confirmation, all contact was handed over to carriers.
However, the business said it took great pride in the fact the voice of its customer is heard and conceded “that was not a nice place to be in 2020 when everyone was shopping online and we were receiving lots of WISMOs (where is my order?) enquiries”.
By integrating with ParcelLab’s platform, Patagonia is able to send a dispatch confirmation email with tracking information, which is also accessible online. The solution is also able to consolidate multiple orders and tracking links in the same communication and tracking page, for a simple and engaging CX.
The solution also includes a portal which Patagonia can watch and call out on any patterns and trends in order to support its customer service teams. This has enabled the retailer to monitor performance by third party logistics providers and ask for better partnerships.
Crucially, the ParcelLab integration has enabled Patagonia to provide a consistent and standardised tone of voice for all of its customer communications.
DPD reports on new e-shopper habits at Deliver
DPD presented the findings of its shopper barometer, European e-shoppers in 2021 at Deliver. Focused on 33 countries worldwide, including 21 European countries, the study found online sales grew by 12.8% last year (down from 27% growth in 2020) with 13.3% of the total retail market now spent online.
Within Europe, the number of regular e-shoppers – those buying 5.5 parcels per month – is growing. They now represent 48% of all European e-shoppers and account for 86% of online market share in Europe. Shoppers are also buying more types of product online than in the past.
Consumers are increasingly thinking about their impact on the environment, DPD found. For example, 69% of shoppers state CO2 neutral is a driver to buy online and 40% of those shoppers said they would be prepared to pay more for green delivery.
In terms of product categories, fashion and shoes are the most frequently purchase items online, followed by beauty and food supplements, which performed very well last year.
Groceries and fresh food, meanwhile, have enjoyed strong online growth, particularly with new quick commerce services. This behaviour is likely to be habit forming as customers get accustomed to quick delivery, said DPD.
The study identified two key consumer types: unrestrained consumers and those more concerned about the economy and environment. However, they are not mutually exclusive and shoppers scan switch between the two behaviours, DPD said.
Where e-shoppers buy from is also evolving. They are buying less from China, due to the pandemic but also to new EU VAT rules introduced in July 2021.
E-shoppers are buying more from Europe but less from the UK with cross border trading declining due to customs charges as a result of Brexit.
DPD also highlighted a growing number of uncertainties, which may impact future e-commerce trade including inflation (forecast to hit 10% in Europe this summer), the rising cost of fuel, war in Ukraine, supply shortages and low unemployment. These will have impacts on consumers, retailers and carriers, it said.
In this ‘new economic order’ DPD said it has three focus areas:
- Being resilient – it has a strong presence in Europe and is the number one, two or three in most countries
- Customer centricity – the customer wants to be in control of ordering and receiving the product
- Sustainability from an economic and environmental perspective
Understanding delivery performance in the light of current retail trends
How well retailers understand their delivery performance in the current climate was debated in the Innovation Theatre at Deliver and featured Amy Goodberry, head of enterprise sales and post purchase at Metapack; Jonathan Sheard, UK sales director at In Post and Mark Kooiman, director of customer success and partnerships at last mile specialist Trunkrs.
For Metapack, a market leader in e-commerce delivery technology with a presence in 150 countries, the focus is on reducing the burdens on a retailer’s customer service teams.
To this end, it has just launched a new tracking API.
“It enhances the customer’s tracking experience and can feed into chat bots to alleviate pressure,” said Goodberry. As such, the tech helps to reduce WISMOs and arms customer service teams with clear and up-to-date tracking data so that they are able to update customer communications.
And it plays a vital role for returns too.
“Returns should not be seen as an afterthought,” stressed Goodberry. “They are one of the key reasons a customer will return to a retailer,” she said.
A key objective was to remove “where is my refund?” calls, which add costs to the business. “It’s making sure it’s fully traceable and visible and that the customer doesn’t really need to get in touch with the retailer,” she said.
In Post told delegates its mission was to improve the returns journey with an end-to-end returns solution and with no printing at home. That’s key since research showed 30% of Millennials don’t own at printer, said Sheard.
The In Post process involves customers simply logging their return, getting a QR code, scanning it and putting their parcel in a locker. The labelling is done by the courier behind the scenes and there is no queuing involved. The service is convenient too with 25% of all returns being made outside of store opening hours, Sheard said.
In Post is expanding its footprint in the UK and Europe. Currently it operates 3,600 lockers in the UK, up from 1,200 18 months ago and it is targeting 5,000 by the end of the year.
Growth has been driven by returns and the pandemic, Sheard told the audience. “Covid accelerated us because people did not want to go the Post Office to make returns and we were being used for outbounds as well,” he said.
Sheard added In Post aimed to achieve the ‘Klarna effect’ and be recognised as a branded service on all retailer sites. He also suggested retailers were keen to grow their out of home delivery options due to macro effects including Covid, sustainability and rising fuel costs.
Kooiman reported 99% of packages are delivered by Trunkrs every day because people are at home. The business is partnering with Nespresso to accept coffee capsule returns and works with Media Markt’s online business by shipping from store.
Kooiman said there was potential for omni-channel since retailers were looking for different propositions dependent on the location of the stock and the customer.
“Metapack’s tracking API is the next step in connecting stock, customers and logistical networks into one eco system,” he said.
Sustainability and circularity is the new business imperative, according to Marissa Selfa, CEO at lifestyle brand North Sails. Opening the key note sessions at Deliver (8-9 June 2022 in Amsterdam), Europe’s premier community for e-commerce and logistics, Selfa called on delegates to do business in a more sustainable manner. With 20+ years experience as a…