Fashion Fulfilment: Global success through hyper-localisation

This article previously appeared in the Cross-Border Magazine, Edition 1, June 2016

When ordering a product online, a customer in Norway has a completely different set of expectations to a customer in Greece. And an online customer from downtown London is used to a completely different service-level experience to someone from the Yorkshire countryside. Delivery preferences can vary so much even within a country that the only way to successfully serve international customers is a hyper-local approach, believes Steve Wiersma, International Development Director at Bleckmann, an International fashion and lifestyle logistics provider. Bleckmann has developed a customisable delivery solution that focuses specifically on the consumer, in collaboration with a network of hyper-localised partners called ‘local heroes’.

Throughout the past decade, e-commerce has become an increasingly more important part of retailing. In the fashion world, selling through online channels quickly became standard. Alongside this, an increasing variety of delivery preferences emerged, depending on the type of product ordered and its respective value. In order to offer both the seller and customer the right amount of choice, Bleckmann works with several partners per country: big carriers, as well as smaller, specialised providers. The company strives to offer hyper-local, tailored delivery solutions across territories in addition to providing a single customer interface for Europe.

Most of the companies making use of the Bleckmann services, specifically fashion retailers and wholesalers, generate around 20 percent of their sales via e-commerce. E-commerce as well as retail and wholesale orders are picked and packed by Bleckmann at the customer’s European warehouse and are processed through the company’s line-haul to the country of destination. The shipments are then “injected” locally into each European country where local partners take care of the last mile of delivering the e-commerce orders.

Partners for the final mile
Steve Wiersma explains that the crucial first steps include recruiting the right partners, “One of the most important steps in this process is finding the right partners to take care of the last mile deliveries, as well as partners for label management and warehouse management systems to create a seamless end-to-end carrier label-printing and track & trace solution”. Right now, Bleckmann is rolling out the new program for all their customers in collaboration with strategic partners. Perfecting the operational performance and gaining cost-efficiency are priorities to make the service scalable and available for other channels and on a global scale to a large group of brands and retailers. “A system like this must be cost efficient and feasible for all kinds of retailers, whether they have five e-commerce orders per day or 50,000 orders per day.”

Product types and customer wishes
The costs and requirements for delivery vary per product type and value; very expensive high-end fashion requires much more customer orientation, including delivery after 9pm or the delivery driver waiting for the client to try on the garment. Bleckmann has recognised that a mainstream delivery service provider will not do that. Per market, region or city, Bleckmann work with several local partners to cater to the individual requirements of a brand or product group. High-end and luxury fashion also require special attention at the beginning of the fulfilment chain: Customised packaging, personalisation and even spraying the order with the brand’s fragrance are services Bleckmann carries out for luxury brands when picking and packing their orders.

Local delivery preferences
A good example to illustrate varying customer preferences within one country is the UK, maybe Europe’s most mature e-commerce market. In general, UK consumers are used to next day or even same day delivery, and foreign brands strive to accomplish this when selling into the UK. However, within the UK, there are major differences between London and other areas. Steve Wiersma: “In London, consumers are ready to pay a premium for delivery of a more valuable product. They want an option for specific delivery at home, in their gym or at work or through a click & collect system. During the day, these demanding consumers want full flexibility to be able to change their delivery preferences and receive regular updates via WhatsApp or SMS. These consumers also want an easy returns process: they want to be able to return their product from anywhere without having to print extra labels.  And they expect a refund within 4-7 days for the returned products. This is a specific pattern for a London resident.” In other areas of the UK, consumers might be less demanding, however, due to its maturity, the UK market is very consumer-centric and demands that sellers provide a comparatively high service level.

In a country like Sweden, the expectation is completely different. “There are areas where nothing is produced or distributed from and the transit time is usually much longer. Delivery can take three to five days, and the consumer does not consider that to be a problem. This consumer has no desire to have his order delivered anywhere other than to his home and has no problem going through some effort to return his unwanted product”. Despite the extreme differences in expectations, most retailers and brands wish to offer delivery to most European countries. It is hard to find one international carrier that can leverage all this efficiently, from London to the Swedish countryside. Bleckmann now offer this solution per country and per region; they have seen that you have to work with a local partner in order to offer all these services depending on the product, expectations and requirements.

The challenge of returns
An easy returns procedure has a positive effect on consumer experience and retention.  When it comes to returns, customer expectations are highly individual and depend on the personal shopping patterns: “People who buy on their smartphone want to return with their smartphone, preferably without printing a label as they are likely to not own a printer. Retailers must find an easy solution, such as including a returns label,” says Wiersma. He does, however, acknowledge that returns are generally a costly challenge for online fashion retailers. Some orders have such a low value that a return would make little sense from the seller’s perspective, so the customer gets to keep the product. But what if people make fraudulent use of this? “Many carriers and service providers have an integrated fraud detection programme. Suspicious buyers get flagged. There are ways to detect repeat offenders and prevent them from ordering again.”  Nevertheless, many fashion labels for instance have documented peaks in sales of party dresses on Fridays that are returned the following Monday. Being relatively accommodating of patterns like this is a conscious choice retailers make: “The seller hopes this customer will come back because the experience was nice and easy. If they order two or three more times, the damage is covered.”

Free returns should not be standard
Bleckmann does warn their customers that once they switch to a business model including free returns, there is no way back. It will vary per customer, service level requirement and product type whether it makes sense to have their consumers pay for delivery and returns. In this situation, you can occasionally switch to a marketing-related promotion involving free delivery and returns during a certain time period. Free returns and delivery do not have to be standard, those e-tailers who initially introduced it have almost made it compulsory to be successful in the market and some labels think they have to do it, but they mustn’t forget that in the end, they have to add these costs to the total cost of the product.

Most brands will need localisation in the long run
There are some brands that rely on a certain hype they create, for example by using influencers and celebrities to build their brand image internationally. Those brands pay little or no attention to localisation, knowing that young people are so eager to get the products they most likely will not care. Steve Wiersma does not believe that this can last in the long-term: “Once the hype is over, even these brands need to serve the customer and localise. Brand hype is often not sustainable.”

Conclusion
If E-commerce is going to continue to be an ever-increasing part of the revenue for fashion and lifestyle companies in the future, they need to listen to their customers and cater to the demands of the current generation of online shoppers.

"Feedback from our customers shows that the service covered by local partners- our 'local heroes'- helps solve many problems they have been facing in terms of last mile delivery. At Bleckmann, we realise that you have to keep innovating in order to keep up with the dynamic retail landscape our fashion and lifestyle customers operate in."