Bobbie Ttooulis (BT) has more than 20 years of experience in senior roles with companies ranging from global market leaders to tech start-ups and joined the GFS Board in 2017. True to her Greek Cypriot heritage, Bobbie loves nothing more than to be sharing great food and great company with friends and family.
TFR: What is GFS and how are you helping retailers?
BT: GFS (Global Freight Solutions) was the UK’s first and is now the largest provider of global multi-carrier services and software for eCommerce business. In fact, we celebrated our 20th birthday only last week.
TFR: Retail is adapting to omnichannel enhanced by supply chain and logistics. E-commerce has shaken up retail and logistics, especially last-mile delivery, probably one of the most important challenges retailers are currently facing. Could you describe how logistics companies have been impacted by e-commerce?
BT: For online shoppers, delivery choice and convenience can make or break the sale when customers come to the checkout, and retailers are focused on getting the final mile experience right to boost sales and customer loyalty. This starts at the checkout by giving customers maximum choice of delivery options so they can choose the one that’s most convenient to them at that point in time. In fact, in our research study with IMRG across 2,000 shoppers, 45% stated that they would abandon a purchase if there was a lack of delivery options available at checkout.
Customers also want complete visibility of where their parcels are at any point of the journey and it is vital to notify them if there’s going to be an issue with delivery. The same research shows that customers will forgive late or failed deliveries provided they were notified, but not otherwise. This has fundamentally shifted the focus in logistics from being mainly about getting parcels from one place to another in the most efficient way, to now prioritising customer expectations and satisfaction.
This shift means that retailers need the tools, services and expertise to balance costs and efficiency with customer convenience and choice. Many retailers are now working with multiple carriers in order to fulfil this, rather than relying on just one carrier and limited services. We are also seeing large logistics companies, traditionally strong in moving large amounts of freight, partnering with final mile delivery partners to ensure great customer service.
TFR: Retailers announced high e-commerce sales increase fostered by Covid-19 and physical stores lockdown. But what is the real cost of selling online? Could you share some insights on the impact of reverse logistics on e-commerce sales? (e.g. failed delivery, returns, etc)
BT: One of the biggest challenges for online retailers is giving your customer a great experience from checkout to doorstep. That means giving customers choice, convenience to ensure the sale, and a good delivery experience to encourage them to buy again. The biggest and fastest growing issue for retailers, however, is the cost of returns. eCommerce customers are fast becoming habitual returners, especially when it comes to fast fashion and are using their bedroom as a fitting room to decide if they will keep items.
By offering free returns to customers, in order to remove the barriers to sale, retailers create a rod for their own back as really there is no such thing as free returns for the business. There is a direct impact on the bottom line as money is tied up in stock on its way back to the warehouse or processes are efficient and can’t turn it around quickly enough.
The boost from Covid-19 in ecommerce sales means even bigger volumes of returns in 2021, putting even greater pressure on retailers to find a way to manage returns. Retailers need to focus on paperless returns, making it faster and easier, and ensure visibility over the whole process for them and the customer so they can get resealable items back on the ‘shelves’.
TFR: Why last-mile logistics is a retail or industry nightmare?
BT: There are so many issues that make the final mile feel like a logistical nightmare. Pressures over carrier capacity, especially as ecommerce sales boom, changing customer habits and behaviors, changing technology, and sustainability issues. Not to mention the impact of Brexit and Covid-19 which has led to constant disruption and a lack of certainty over the future of ecommerce. The businesses that are able to survive these ups and downs are the ones who have the agility to pivot fast and adapt to the situation in hand – whether its bad weather, or global pandemics.
TFR: How could you reduce costs while improving customer experience in this regard?
BT: We know that businesses need to work with a mix of carriers in order to be both agile and offer the kinds of services that customers want and improve their experience. Businesses who work with a single multi-carrier partner are able to leverage buying power and get direct access to services across many carriers. They also benefit from industry expertise and a partner who has their fingers on the pulse for disruptions or changes within the industry. This helps business reduce costs by having less overhead and less time spent managing multiple carriers, whilst maintaining the flexibility to switch between carriers when needed. Single multi carrier partners can also provide the technology to ship and despatch more without needing more staff, track parcels, provide customer notifications and increase overall productivity. All of this gives businesses the backup whatever happens to there is less risk of failing to deliver on a customer promise.
TFR: Leading apparel retailers are opening new store formats (e.g. H&M hyper-local stores or Nike Live, Unite and Rise formats). On the one hand, stores are redesigned to offer lower inventory levels and better brand experience. On the other hand, a number of retailers are turning their stores into fulfillment centers, the so-called “dark-stores”.
BT: Retailers are trying to find a way to reinvent the high street and leverage their investment in physical stores to support online ecommerce which is growing at a faster rate. The shift from high street to online shopping has only been accelerated by Covid-19. This is just my personal opinion, but H&M is one of the retailers making bold decisions to help adapt their business to changing consumer shopping habits. I firmly believe that there is still a place for the high street in-store experience, and retailers like H&M are trying to find what it needs to be as part of an omnichannel strategy. Sadly, we’ve seen a number of retail chains fall victim to the move online if they weren’t able to make that shift fast enough or well enough. This affected big brands we thought would be with us forever such as Debenhams and House of Fraser.
TFR: Leading Online retailers or platforms (e.g. Farfetch) are using artificial intelligence and predictive analytics to analyze best delivery options considering multiple factors such as distance, delivery time, weight, taxes or currency exchange. What is the level of maturity of the logistics industry in regards of technology implementation? How complex it is to connect your systems into retailers “IT ecosystem”?
BT: We are seeing the logistics industry mature in their understanding of technology and there is a growing desire to use it to improve delivery. However, one of the main obstacles to adopting new technology is the cost and difficulty adopting it into their processes. Smaller businesses especially struggle with the internal IT resources and budget to take advantage of new technologies. That’s why GFS made it easier by bundling GFS Checkout as part of our services to customers who buy carriage from us. It easily integrates into the retailers’ ecommerce platform, allows them to offer multiple delivery options, switch services on and off based on capacity and helps calculate Duties and Taxes. We know that for retailers to get the most out of delivery spend is not only having the right mix of services and carriers, but also having the technology to back it up to improve operational efficiency and the end customer experience at the same time – the two go hand in hand.
TFR: Could you briefly explain a couple of business cases where GFS helped retailers to achieve their goals? What was the need of your client and how did you solve it?
BT: We have helped a number of clients grow their business and reduce costs. Hamper.com came to us wanting to simplify their peak period, when 75% of their sales took place. Their complicated delivery system involved seven different carriers, shipping to 50+ countries across multiple carriers. It left their business open to risk should any difficulty arise, such as bad weather, carrier problems and IT system failures. Through our Multi-Carrier Delivery Management service, Hamper.com were able to have a dozen delivery services at their fingertips, automated labelling, tracking and reporting all through one relationship with GFS. We were able to help them achieve 50% faster despatch, increase productivity and a 20% year on year sales growth.
For the past 9 years we have been working with a Premier League Football Club with the delivery and technology of their online store. Their previous supplier had led to an overcomplicated process in adding new services to their delivery offering, and they were having to manage multiple carrier relationships themselves. All of this hindered their ability to nurture growth potential in international markets. With us, they were able to access over 1000 international delivery options without having to manage multiple carrier relationships – they just had one relationship with HGS. They could also add delivery options quickly and easily through GFS Checkout and fully integrate our despatch system with the clubs WMS for complete automation. All of this led to a 600% increase in parcel volumes over 8 years, and a significant reduction in international delivery costs.
TFR: Largest freight companies are facing emerging competition from local players that are specializing in last-mile delivery, even using robots (e.g. Starship). Why last-mile startups succeed or why large players “failed” to rapidly adapt to new requirements?
BT: As the industry put the customer at the heart of their delivery, large freight companies risk being left behind if they can’t keep up. They need to be able to offer the best customer experience, from checkout to doorstep and back again, for both delivery and returns. Doing this in-house can be both high cost and high risk, as well as taking a lot of time and resources. The logical starting point is partnering with special final mile delivery partners in order to stay competitive. In the last year alone, GFS have been approached by two large freight forwarders and we now provide final mile services to them. It means they can enhance their service offerings to customers through GFS, while they focus on what they do best.
TFR: What is the future of logistics industry?
BT: The future of the industry really is focusing on collaboration and partnering. Retail businesses can’t do it all on their own without eating into their bottom line and taking up a lot of resources. In order to get the customer experience right, which we know is one of the keys to online sales, retailers need to partner with the experts in final mile delivery. It’s not just good for the customer, it’s good for sales, growth, costs and operations. It also means they can focus on their sustainability as climate change becomes a more pressing issue. Only by working with the experts can retailers meet the increasing expectation of the digital customer as ecommerce continues to boom.