2. 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
2
3. E-Commerce - the big picture:
3Sources : 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
4. 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
4
B2C E-commerce sales repartition in Western Europe
% of 2012
sales
Sources : eMarketer 2012 study
Growth
E-commerce in Europe
5. 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
5
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
6. 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)
6
US Retail E-Commerce Sales, in $ bn (excl. Travel & tickets)
Source: eMarketer
CAGR 13-16
7. The barrier between brick & mortar and online
retail fades away.
7
• 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
8. Segmentation of key players in e-com
8
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
9. E-commerce logistics : western Europe: a €40bn
market
9
Local e-com logistics split
Western-Europe vs Eastern Europe - Market size
e-commerce fulfilment
10. • 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
11. Scope of services
11
Fulfilment and
returns
“Front end”
Web shop/web site
Carriers
Pick up Networks
Finance
Services
Customs
Mgt
Scope of Services
12. 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
13. 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
14. 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
15. 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…’
16. “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
17. “Late ordering cut-off
times for next-day
delivery are important to
me.”
33%
of UK adults agreed with this
statement
Customer survey: results
18. “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
19. • 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
20. 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
21. 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
23. 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
25. …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
26. … 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
27. 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
28. 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
29. 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