Final Mile Profitability
Our CEO Martin Bysh was invited to attend and share industry insights at Retail Week’s 2021 ‘Accelerating Ecommerce Week’ virtual event. The event which took place entirely online is one of Retail Week’s most prestigious. Running for two days the series of webinars brought insights from top retailers and experts on how best to capture consumers in the much-saturated online market sphere.
Martin shared his 30 years of industry knowledge on why he thinks retailers should take a more strategic approach to avoid a race to the bottom.
Retailers with eCommerce delivery strategies have seen a huge surge in online sales, what can you tell us about the steps you’ve been taking to manage this? And any learnings you’ve discovered?
Speaking on the panel Martin responded, “when the first wave of the pandemic hit, Huboo suffered a 20% decrease in employee figures due to some members of staff leaving. Our unique hub model of micro warehousing run by a single hub manager naturally helps with social distancing and limiting contact with others. Our position of staff is underwritten by continuous growth, Huboo has systems in place to deal with seasonality spikes that let us allow staff to move around through different jobs for when spikes exceed staff levels.”
“We currently have 770 clients and onboard an average of 150 clients each month which helps to smooth out any issues that seasonality may bring. Here at Huboo we largely deal with SME’s which does add to the complexity of our situation. Our business model deals with a largely uncontested market, however. Typically, fulfilment companies don’t want to work with SME’s unless they come with such factors as their basket count is high, there are very few SKUs, or the brand is already established. We’ve ensured that we have reached out to products, entrepreneurs and stores that have brilliant ideas and want to focus on their products and not the back-end logistics of having a brand.”
Is the Amazon effect giving retailers a false impression of what retailers want?
In residential locations where Amazon warehouses are only round the corner, delivery options can include wait times of just two hours. But it’s not just Amazon that has created this fresh, innate desire to receive online purchases immediately. Marketplace sites such as ASOS offer free next-day delivery for an annual fee of only £9.99.
Martin continued, “there is a small category of items that people must have now, events in our lives cause this, maybe a specific occasion, an incident such as losing your phone charger, but it doesn’t happen too often currently.”
Similarly, consumer trends are seeing a decline in those willing to pay additional costs to receive an item the day after purchasing it. The Covid effect has led to a decline in those not wanting or needing a particular item instantly.
“Our clients don’t want to pay for faster services, this is reflective in their consumer’s habits. Consumers would rather dictate when they want their item to arrive rather than how fast it can be delivered.”
This year we’ve seen a huge spike in sellers using your service, what part does partnership and collaboration play?
Huboo’s rapid expansion has not only seen investment, recruitment and expansion plans sore, but our partnership programme forms lasting and mutually beneficial work relations.
“Huboo integrates with 20-30 channels. We work with our partners and shop systems to bring clients to them and vice versa. We also collab with entrepreneurs who think about fulfilment at an earlier stage to ensure they can make the entire end-to-end process profitable. We see an inverse relationship between the exclusivity of the product and how much friction consumers will tolerate from the delivery process. For those selling niche and selective items, you can look at what services you can use, for example, those that are less expensive but take longer. Concerns about fast delivery using come from commoditised products.”
Martin advised retailers that were seeking to evolve their business to changes in consumers habits.
“The digitalisation of products is key. The Covid experience has accelerated the demise of the high street. Think of logistics and fulfilment as part of your product experience. Consider how you ship, is there some measure of exclusivity in your product, can it be commoditised? If possible, build free economical shipping and lastly, customise shipping per platform. For example, free shipping on eBay is dictated, when it comes to your shop you can afford to have delivery fees. Your customers have decided to come to your site, they like your product, you can feel confident they’ll pay the fees.
There’s no one size fits all when you take your products to the fulfilment market, you need to have a complex multi-channel approach.”
Lastly, what should be the key consideration when outsourcing fulfilment?
“Most importantly, look at price. Is it effective, are your offers inclusive, are all the payments laid out in the initial stages so there won’t be any surprises.” Huboo’s unique model in fulfilment combines lowest like-for-like costs with best-in-class service.
“Secondly, ensure they’re a tech-first company. Huboo, for example, is a software company first, we’ve built integrations for free, we provide a modern approach to fulfilment. For those seeking to build an online business, you need service that understands the eCommerce industry. ”
Martin ended with his last tip, to seek a company that hiring ethically and upholds ethical values and retains its staff.
You can listen to the full panel discussion here.
To see how we can help with your fulfilment needs, check out our How It Works guide.