“Three hour delivery is a game changer,” admits Paul La Rosa, commenting on the recent announcement by footwear etailer StyleTread to cut delivery times across Australia.
“We’ve seen StyleTread get first to the post on many fronts [since its launch in 2010] and I think others will be looking at these service levels and working toward matching or improving their own processes,” he adds.
La Rosa, managing director of Prodigy Footwear, has been a supplier to StyleTread since its launch and says he has experienced “continually growing sales” since the etailer introduced its three-hour delivery promise. But, interestingly, for his business, that's about the only thing that has changed.
“The move to faster delivery times haven't impacted our internal operations at all, because StyleTread, like any other customer, orders their stock, warehouses it and then distributes it.” he says.
However, according to La Rosa, the increase in online sales overall is creating a new kind of challenge on the logistics front for all involved.
“Consumers are turning to online shopping more and more, and while the biggest challenge in a wholesale fashion business has always been managing inventory, with online we are handling more and more smaller, often single pair, consignments which is quite costly,” he says.
“The costs associated with freight and storage are also significant, so the shift in consumer shopping behaviour and expectations is challenging businesses like ours to look outside the box for alternatives. However, thankfully our supplier relationships are strong and we are working together at ways of improving efficiencies to cater for this shift.”
Gill Lawrence, head designer for local label Toi et Moi which supplies The Iconic – another online retailer which offers three-hour delivery – agrees with La Rosa that while specifics, such as delivery times, have not impacted her business operations, the shift to greater online purchasing is making its mark.
“We have been stocking with the Iconic site since they went live in 2011, and have been very impressed with its product offering and logistics,” she says.
“But the increase in online sales has meant that all processes of warehousing, dispatch and delivery must be efficient, timely and streamlined to ensure customer satisfaction, without sacrificing quality or service.”
For suppliers, La Rosa says this increase in online sales has meant reviewing carriers and working with a number of different freight companies depending on the requirements of each order. However, for retailers, such as StyleTread, CEO Mark Rowland reveals the changes have been much more extensive.
“On average we process over 700 shoe orders a day so we needed to ensure that by launching a new service we would not affect any of our existing orders from customers that were not using the three-hour service,” he says.
“This affected over 30 key internal processes that needed to be changed.
“This included changing a number of our picking and packing processes, and training our internal customer team on the changes in those processes. We also had to create lots of interfaces between StyleTread and [mail call company] WantItNow to ensure seamless integration between our two companies so that as soon as an order for three-hour delivery was placed, both we and WantItNow were notified at the same time.”
Similarly, The Iconic, which now stocks over 13,000 different styles, has also had to reinvent its logistics operations to balance general online demand along with its three-hour delivery service within Sydney, tells managing director Adam Jacobs.
“Any company growing at our rate must be improving every day, so we are continually improving our processes,” he says.
“We’ve significantly evolved our supply chain over the past six months and we also work very closely with global logistics provider DHL on innovating and improving every day.”
According to Mark Helvadjian, founder of online shipping company ShippingEasy.com, the advent of online retailing has meant that this sort of day-to-day interaction with carriers, as well as choosing the right company and method for product distribution, has become even more essential to tight logistics and a smooth supply chain.
“As fashion retailers move online, one of the biggest components of their online offering is fulfilment. Getting this right is critical to success, as unlike traditional bricks-and-mortar stores, it is the only touch-point with the customer,” he says.
“One of the increasing challenges for retailers is also managing orders and shipping across multiple sales channels. For example, retailers may sell on Ebay, have their own e-commerce website and deliver from their bricks-and-mortar store. International trade also opens up a world of possibilities to extend your customer base and reach. However, with this comes the complexity of cross-border shipping.”
While companies such as ShippingEasy.com are providing viable solutions to this issue, by offering cost-effective and multi-channel fulfilment solutions, the increase in online retailing and delivering to destinations far and wide also poses other hurdles.
“For fashion brands establishing an online presence, the main thing they should consider is the delivery of their goods. Things like customs and quarantine can impact not only on the final cost of the goods bought online but the time it takes to get from the retailer and into the hands of the consumer,” explains Gary Edstein, senior vice president oceania of international shipping company DHL Express.
“Fashion retailers need to understand things like customs and quarantine as they can impact not only on the final cost of the goods, but the time it takes to get from the retailer and into the hands of the consumer. With the rise of online shopping, consumers are demanding their goods quicker then ever, and even basic things like knowing how to properly complete a customs declaration form can save a fashion retailer precious time and cost.”
Yet, despite the challenges, Edstein says that online retailing and streamlining processes to produce quicker delivery times still present a golden opportunity for those businesses who get it right.
“I believe the rise of online retailing offers a huge opportunity for Australian fashion retailers. And if they are based in Australia their competitive advantage against international sites is a quicker delivery time,” he says.
“As with our business, the quicker shipments are delivered, the more shipments can be delivered and the more revenue we generate. I would assume the same theory applies to fashion retailing. The advent of online retailing has meant that customers have more choice than ever before and if time is a critical factor for them, because they want that dress for the weekend, then they will select their provider on that basis as well.”
