Retailers transform logistics as pandemic drives sales online

European retailers are adapting logistics operations and launching new delivery services in response to the dramatic growth of online sales resulting from the COVID-19 pandemic, the DELIVER 2020 online conference heard yesterday.

Leading Dutch e-commerce marketplace Bol.com, children’s products specialist Prénatal and French clothes firm Le Slip Français are just three of many companies across the continent that have been forced into dramatic business transformations this year in response to pandemic lockdowns, including shop closures, operating restrictions and other impacts.

Bol.com wants last-mile delivery innovations

Fast-growing Dutch online marketplace Bol.com, with more than 35,000 sales partners and about 11 million customers in the Netherlands and Belgium, already embarked on a major expansion of its logistics capabilities in the last few years, logistics director Joost Poelgeest explained.

The company has rolled out more delivery services and options through delivery partners PostNL and bpost. Next year it expects to open a large 50,000 sqm expansion of its fulfilment centre at Waalwijk in the southern Netherlands, gaining considerable storage space. The fulfilment centre is operated by logistics partner Ingram Micro.

Poelgeest explained that the 8,000 sales partners now using the Bol Select logistics fulfilment programme benefit from warehousing, distribution and deliveries on the same day, in the evening, on the next day, on Sunday or to a collection point as well as returns.

Responding to CEP-Research questions about lessons learned from the pandemic, Poelgeest said: “We already had a challenge managing growth. With corona the challenge became even bigger. What was Christmas last year was March and April this year.”

He emphasised: “The question is, what will be the shift from offline to online? Will (the surge) be maintained or will it return to its original growth? For now, we can manage the growth in our logistics but that is the question for the years to come.”

In terms of Bol.com’s requirements for carriers, the logistics chief responded: “Last-mile is becoming more and more a differentiator in e-commerce. As we outsource all our distribution, that is also our request to carriers. We are continuously talking with them about how to manage growth and how to deliver innovations in our last-mile services.

Prénatal praises ‘solid and flexible’ logistics

Childcare products and clothes retailer Prénatal Retail Group, with 25 million customers and €1 billion turnover in 2019, is in the midst of a major transformation away from its traditional focus on 730 stores in Italy, France, Spain and other countries into an omnichannel retailer selling online and offline.

Group COO Massimo Arioli admitted that “we have a long road ahead of us” to build up online sales from their current low level and ensure a ‘seamless experience’ for online shoppers. “We need to invest a lot of money and we cannot (afford to) make the wrong investment,” he made clear. Moreover, it is difficult to transfer the wide-ranging expertise of store staff into an online environment, he pointed out.

However, the pandemic, resulting in the complete closure of all stores in some countries, had shown that happy and loyal employees “are willing to give much more than you would expect”. For example, some sales staff had made video calls to customers from inside closed stores in order to show them products for sale. At the same time, satisfied customers had remained loyal to Prénatal as a ‘reliable brand’, he noted.

One key lesson from the pandemic for Arioli has been the clear need for a “solid and flexible” logistics partner able to respond quickly to “drastically changing needs from one day to the next”. 

“On Sunday night we knew that we could not open the shops on Monday morning. So with our partners we shifted completely the logistics processes, to move from shop deliveries to home deliveries to the customers,” he explained.

“In the first three days we had something like 10,000% increases in our online orders. Obviously, if you have a solid enough and flexible enough logistics partner you can face this. Otherwise you simply have unhappy customers,” he said.

Return logistics for bulky childcare products

In an innovative move towards the ‘sustainable circular economy’ Prénatal has just launched a completely new service called ‘Forever Young’ to buy back and either resell or recycle used products, such as children’s prams or car-seats that are often only used for 1-2 years.

One year after their purchase, customers can get a partial refund of 30-50% of the original price and will be provided with suitable packaging. They can call for a courier to collect the item and take it to a collection centre where experts will decide whether it can be resold or has to be recycled.

“We have to make the return logistics very efficient as the cost (of the product) is very low,” Arioli explained. Prénatal will work with Geodis for the return logistics and is currently seeking partners for transportation to new ‘second-hand stores’ where the goods will be put on sale.

Asked about the new service’s potential volumes, he said: “What we started three weeks ago will give us the first returns in 12 months. We expect the proposition to take up in time and not right away. But we believe it is a sound proposition.”

Fast deliveries by bike courier

Another retailer expanding its delivery offering is underwear retailer Le Slip Français, which sells quality ‘slow fashion’ products made in France online and offline through retail partners. It delivers across France through Colissimo, Mondial Relay and TNT Express as well as cross-border through local delivery partners.

Operations director Antoine Rigaud said the company will soon launch a new ‘Ship from Store’ service offering same-day deliveries through bike courier operator Stuart. Customers can select a delivery time-slot, with the earliest slot two hours after their order. The courier will pick up the order from a store and deliver it directly by bike.

The company is also considering broadening its returns offering with courier collection options in addition to the present service through La Poste.

In terms of lessons learned from the pandemic, Rigaud said: “We need to serve our customers better than ever when they come to our stores. Today people are reluctant to come to physical stores. If they make the effort to come, we really need to sell to them the best way we can. We have to have the right products in store.”