Welcome to Clipper Northampton 3. Tony Mannix, CEO

Transcription

1 Welcome to Clipper Northampton 3 Tony Mannix, CEO

2 Retail Logistics Evolution and Innovation Tony Mannix, CEO

3 Returns Management The new battleground for retailers Evolving solutions for retail UK S LEADING RETAIL LOGISTICS SPECIALIST

4 Returns Management The new battleground for retailers Evolving solutions for retail

5 Evolving supply chain needs The only constant is change

6 Evolving supply chain needs The customer is forcing Retail change *JDA and Centrino Christmas Customer Pulse Report 2017

7 Evolving supply chain needs Optimal online capability is essential

8 Evolving supply chain needs The customer is evolving and is less tolerant 19% of online Christmas customers shopped at alternative retailers due to stock availability and delivery time constraints 78% of online Christmas shoppers said they would likely switch to an alternative retailer as a result of a poor online Christmas shopping experience. 32% of online Christmas shoppers stated they had experienced issues with their online purchases. Black Friday has now firmly established itself in the UK and is here to stay. Sales increased yet again in 2016 with the event now expanded over multiple days and moving increasingly online. Paul Martin, Head of Retail, KPMG in the UK *JDA and Centrino Christmas Customer Pulse Report 2017 Black Friday is now Black Four Weeks

9 Evolving supply chain needs Black Friday a clear example of rapid change

10 Returns Management the new battleground for Retailers The changing Retail process Then Now Returns experience as critical as the purchase experience

11 Returns Management the new battleground for Retailers Retail returns now a core activity 600M IN 2015, 600M WORTH OF PRODUCTS BOUGHT OVER BLACK FRIDAY AND CYBER MONDAY IN THE UK WAS TIED UP IN 1 RETURN LOOPS BY THE MIDDLE OF DECEMBER 30% OF MULTICHANNEL WOMEN S FASHION PURCHASES ARE 2 CURRENTLY RETURNED * 1. The Financial Times, UK retailers count the cost of returns, January Clear Returns Why returns is the new battleground report, data from 2015

12 Returns Management the new battleground for Retailers Retail returns 92% 67% 51% OF CONSUMERS WILL BUY SOMETHING AGAIN IF THE RETURNS PROCESS IS EASY OF SHOPPERS CHECK THE RETURNS PAGE OF A WEBSITE BEFORE MAKING A PURCHASE OF CONSUMERS THINK THE RETURNS PROCESS IS TOO COMPLICATED Business2Community, E-commerce Product Return Statistics and Trends, April Business2Community, E-commerce Product Return Statistics and Trends, April Metapack Consumer Data, 2015

13 PwC

14 Supply chain implications PwC

15 Returns Management The new battleground for retailers Omni-channel supply chain sub-optimal High customer expectation driven by slick online ordering process Returns single largest source of inbound stock Additional DC pressure Little visibility Reduced compliance Space and time hungry

16 Returns on returns Omni-channel supply chain re-optimised Clipper developed solution interfaces with your retail/online systems PwC

17 Retail focused Click & Collect The new model

18 The new model Click & Collect customer experience *JDA and Centrino Christmas Customer Pulse Report 2017

19 Returns on returns The Click & Collect solution was developed to enhance carrier solutions by creating a retail focused operational process Fully integrated into the retailer on-line systems Full track & trace Next day delivery against a timed delivery schedule Parcels sorted into cages at sorter hub parcel to cage parent & child association to ease store handling/storage and efficiently provide in-store system updates complete transparency throughout Able to fully integrated with in-store systems to provide enhanced customer care at store location Ease of returns via the network to provide potential for same day Boomerang processing

20 The new model Click & Collect and Boomerang The on-line sector is growing Click & Collect is growing Intolerance of poor service is growing Time pressure is growing Retailers want to provide an integrated store and online experience Retailers want brand protection and loyalty The combined Click & Collect network and Boomerang provides customer care benefits & the rapid release of working capital - getting stock back into inventory at pace. *JDA and Centrino Christmas Customer Pulse Report 2017

21 What next?

22 What next? Mechanisation, automation and collaboration The retailers dilemma. The required shift to increased automation will necessitate significant investment at a time when cash flow is impacted by depressed margins A Clipper shared use opportunity. Dom Carter, Head of Retail Working Capital Management, KPMG

23 What next? Four emerging retailer themes PWC - 10 Things You Need To Know About Total Retail Simplicity There is an increasing need for retailers to maintain simplicity throughout the ever-evolving customer journeys and beyond. Innovation With retailers in the world racing to innovate, a lack of investment in innovation is a risky business. Connection Customers now demand more personalised connections exceptional service needs to go beyond the transactional. Trust Uncertain times have led customers to rely on retailers they know and trust PwC: 10 things you need to know about Total Retail

24 What next? Digital commerce needs a digital supply chain Linear supply chain It used to be simple.. Digital supply chain Complexity creates opportunity.

25 What next? Clipper the evolution continues Helping retailers face the future with confidence whilst protecting their brand Collaboration Clipper shared use Mechanisation & automation cost effective, modular approach Prime it s not just about Amazon Efficient inventory management via Clicklink & Boomerang UK & International

26 What next? Evolving Supply Chain Needs Clipper online in action 2016 During 2016 Clipper: despatched c55m units of e-comm volume & processed over c40m returns Clicklink, our new network, delivered into the stores of our retail customers over 3m parcels in the pre Christmas trading period 2016

27 Thank you

28 The Changing World A Retailer s Perspective Dino Rocos Operations Director, John Lewis Operations

29 Retail A Time of Change Personal Mass Mass Personalisation Operations

30 Multi-format and Omni-Channel Retailing is the norm Operations

31 Online Sales Share by Value ( ) 38% 42% 26% 29% 33% 21% 10% 12% 14% 17% 2007/ / / / / / / / / /17 Operations

32 Online Shipped Units 41% 45% 28,038,013 48% 32,622, % 35,883,471 21,703,595 31% 18,640,935 15% 10,997,414 20% 14,308, / / / / / / /17 Operations

33 The modern customer is demanding I want choice I want speed I want convenience I want to change my mind Operations

34 Omni customer interactions Advice Fulfilment Returns Transact Operations

35 This complexity brings cost Fulfilment CoS continues to grow Variable cost Semi-variable cost Fixed Cost Shop replenishment Omni-channel fulfilment Operations

36 To win we need efficiency Consolidation Automation Less Stock Lower Overheads Productivity Operations

37 Retailers need to be clear about where they add value Differentiated Unique Product Trusted Services Standardised Trunking Click and Collect Lasting Relationships Dispositioning Returns Keep in house Collaborate Operations

38 Clicklink is collaboration in Action Conceived as a shared multi-user operation, not dedicated to John Lewis Encouraging others to take advantage of the benefits and drive greater value for Clicklink Partnered with Clipper to bring operational expertise and act as an honest broker Operations

39 The future will bring more change in how we work Greater use of traditional shared user services Growth in network level sharing and collaboration Sharing more complex capabilities such as automated warehousing and fulfilment John Lewis is pleased to be leading the way Others will follow as the challenges of omni-channel retail continue grow Operations

40 Northampton 3 Site Overview

41 Background Clipper and JLP have worked together in partnership for some time: Pre-Retailing in Hornsey / Enfield since 2001 E-Commerce fulfilment in Ollerton since 2010 Started trials re Clicklink via Waitrose in 2015 Set up the Ancillary Distribution Centre (ADC) in 2016 Created a joint venture in 2016 John Lewis ADC and Clipper: John Lewis and Clipper signed a 10-year commercial partnership re the ADC John Lewis wanted to locate the ADC close to their Magna Park campus John Lewis and Clipper agreed that a shared use facility model was the best way to support growth

42 Clipper Northampton 3 44

43 Site 15 miles to Magna Park

44 Agility with ability RETURNS PRE-RETAIL INDITEX CLICKLINK FORWARD ORDERS Secured and fitted-out Northampton 3 to plan Successfully completed 5 * start-ups - all during their peaks Operated 3 * start-ups whilst the site was under CDM Designed and implemented JDA Dispatcher to plan Successfully partnered with professional agency staff providers From operational start in July 2016 the site team grew to 750 in peak

45 Scale of build Northampton 3: Site acquired on 21 st March m height to eaves at haunch 30 loading bays, of which 8 support double-deck trailers c5000 high-bay pallet locations 38 trailer parking spaces in 50m yard 224 parking spaces for employees and guests

46 Available and potential space Warehouse slab - 286,000ft 2 Main and Hub office - 23,500ft 2 Current 2 * mezzanine - 283,000ft 2 Potential 2 * mezzanine - 281,000ft 2 Potential mezzanine extension - 158,000ft 2 1,031,500ft 2

47 Inditex Brands Strategic Supports Inditex decision to increase brand awareness in the UK Provides a foothold in the UK to support store and online growth Clipper and Inditex Proven 3PL credentials set up and operate Zara e-comm in Clipper N2 The site operation has the flex to cope with the planned growth 29-Mar-17

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49 Retail focused Click & Collect Richard Ball Delivered by

50 What is Clicklink?

51 Joint Venture Established July % 50% - Volume - Retail knowledge - Retail logistics - Established network Retail focused logistics solution

52 Why?

53 for John Lewis 10% 12% 14% Online % share of trade 29% 26% 21% 17% 33% 38% 42% 56% in-store collect

54 for Clipper Network expansion Additional client services Low volume/high frequency market

55 Clicklink uncovered

56 Current network CLIPPER OLLERTON GLASGOW NORTHAMPTON SWAD HUB SWADLINCOTE IFORCE NORTHAMPTON BLAKELANDS N HAM HUB HARLOW LONDON 2 MAGNA 1 & 2 BRISTOL

57 Process

58 Track & Trace DC s and Depots Transportation Stores

59 Customer order tracking

60 System Integration Light touch for customer Single interlinked system throughout Back of house interconnectivity

61 Click & Collect The Carrier Solution Network Technology Process Home delivery parcel network Complicated routing structure Little or no value add Low visibility Multiple integrations Irregular and split deliveries Abandoned deliveries Loose parcels

62 Clicklink the retail focussed solution Network Technology Process Focus on a C&C specific solution Speed and efficiency Returns loop Mnetics solution to provide tracking and maximise storage Parent / child scanning Timed deliveries Cages arrive retail ready Focus on branch compliance on inward scan

63 Operational benefits Timed deliveries by store (1 hour window) Allows for cost effective planning of store staff hours Closed loop for delivery media control Provides opportunity to utilise totes Collection at same time as delivery Consistency of approach for stores One stop solution for mainland UK Single point of contact for customer service

64 Value-added opportunities Immediate: Handling of inter-store transfers FOC removal of recycling Broader evening and out-of-hours opportunities Hanging garment handling In development: Direct label integration with WMS Integrated Boomerang solution

65 Thank you

66 Boomerang PwC

67 Returns on returns High level Boomerang process

68 Returns on returns Time criticality Refunds back to customers need to happen within hours not days Customer service priority returns process is last customer contact point, leaving a lasting impression

69 Returns on returns Electrical Returns Management

70 Returns on returns Summary Returns process managed by one solution Boomerang from the customers order being returned to the DC to the final disposition route of the stock Streamlined stock handling through pre-determined sampling decisions. Opportunity to make proactive decisions from increased stock visibility. Opportunity to impact costs and lost sales by cutting down handling time. Rapid release of inventory to allow sale at full margin

71 Returns on returns Systems enhancements Clipper has been working with JDA to enhance returns receiving to: Improve the returns process flow through the system Allow pre-defined rules to drive product down the most efficient route, removing the reliance on users Introduce product images at key points Increase the number of product images available, including web links to retailers web platforms Introduce product information and notes at key points in the returns process Enable JDA to automatically set an order to shipped when imported to enable returns receiving Capture key sampling data for operational management and buying teams

72 Returns on returns Returns receiving When an order is scanned for returns receiving it will be displayed with a product image:

73 Returns on returns Returns receiving The user can click on the thumbnail and a bigger image will appear:

74 Returns on returns Sampling Any value added services can be selected when sampling the item:

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77 Asset recovery Servicecare are an ebay and Amazon strategic account managed partner Lower rates, white labelled stores Access to marketing, advertising funds and campaigns Product remarketing Up to 85% of RRP achieved Multichannel flexibility Social media capability In-house marketing campaign management Electrical-deals/Genesis provides anonymity. Insured warehousing with pick, pack ship / drop ship capability Onsite retail outlet Dynamic listing and customer services provided Full MI capability

78 Modular Approach

79 Wrap-up Tony Mannix, CEO Wrap Up

80 Wrap-up Some market statistics Average weekly spend online in January 2017 was 1billion, an increase of 10.1% on January 2016 Retail sales in Great Britain: Jan 2017 by Office for National Statistics, February 2017 The online market makes up over 20%, of total non-food sales Online growth rate unchanged in February by BRC, March 2017 The returns process can cut retailer profits by 10-20% each year The reverse logistics report: How retailers can save money by making returns smoother in the e- commerce age by Business Insider, October 2016

81 Wrap-up Some market statistics It is expected that by 2025, click and collect usage will double, and generate 10% ( 23bn) of UK retail sales. How has Click and Collect evolved, and is it still in high demand? By econsultancy, January 2017

82 Wrap-up Summary The retail sector is continuing to evolve to meet changing customer expectations Clipper has total focus on the retail sector and is ideally placed to help with innovative solutions/ideas to drive profitable change Clipper The Retail Solutions Provider

83 Thank you for listening