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Black Friday Returns – Are You Ready?

downloadBlack Friday Returns Management – A Horrifying Prospect?

The real drama for Online Sellers will come in the days following the mega sales and fist fights, as consumers return a potentially incapacitating volume of purchases for retailers to deal with.

Industry experts predict that over £5billion of goods will be sold within the period of 24th to 28th November – but how many of these will be returned? And are retailers paying enough attention to returns processing?

It’s difficult to predict how Black Friday 2016 will compare to previous years, however, what we can say with certainty is that shoppers will turn to online and mobile platforms to make their purchases. Unlike America, where Black Friday encourages consumers to go out to physical shops to grab their bargains, UK retailers are focusing more and more on attracting consumers through their online platforms.

Fashion is particularly big in online and mobile shopping, and Black Friday will be no exception.

On average, of all online clothing purchases made, 40% are returned. So, for retailers to be the true winners this Black Friday, they must consider the scale of returns, which could add immeasurable pressure to their logistics operations, have a lasting effect on their customer relations and, ultimately, impact retailers’ bottom lines.

Returns processing has been amongst the Black Friday nightmares seen in the past few years –  getting money back to customers, and ensuring stock levels are at the right level in time for the second wave of Christmas shopping has caused hell on earth for some retailers. Those that have learned from being close to collapse will be the leaders – both in profit margins and in customer service.

Certain items that will not be accepted back into prime stock – if retailers have prepared for returns, they will be able to approach this strategically, and will already have plans in place to make deals with this stock elsewhere, without writing the returns off.

A lot of consumers who will be shopping during the Black Friday sales are especially savvy. This means that when they are looking to purchase online, they will look at the returns policy before pressing the buy button. If retailers aren’t aware of this, they can lose strength in their position within the market; returns really do matter to consumers

By preparing with an easy and efficient returns policy for customers, and making this work as prescribed, retailers will be able to retain custom way beyond Black Friday. A clear policy will also help retailers forecast likely demand on returns, so they can prepare when it comes to stock levels and back end logistics.

We help retailers take an intelligent logistics approach to peak. If forecasting and planning has been backed up by a ready to rock IT infrastructure , ‘Black Fiveday’ should be a time for retailers to delight customers, improve their inventory for the festive period and rake in revenues.

There will be much debate and post-event analysis from retailers and across the industry once ‘Black Fiveday’ is done. But, by this point, retailers may already be feeling like they are playing a leading role in a horror film with no way out. Sadly, if you are reading this and can feel a sense of gloom encircling, it may already too late! 

WWW.3P-LOGISTICS.CO.UK

Four lessons UK retailers can learn from China about mobile commerce

china-m-commerceMobile commerce in China is at an all-time high. Estimates for 2016 predict it will account for 55% of online sales and it looks set to become the most important channel for all retail sales over the next few years. Dominated by commerce giant Alibaba, the mcommerce market is fiercely competitive and retailers wishing to endure in this environment have had to create mobile products that glitter – the younger generation of Chinese consumers shopping on their mobiles are digitally savvy, fickle and expect a high standard of service.

WeChat has provided the ultimate gateway for retailers to reach consumers via smartphones. A combination of online browser, messaging app and social media platform all under one virtual roof, ‘super app’ WeChat is life for 700 million users accessing over 10 million internal apps (known as official accounts). It’s one of the most important multichannel portals for businesses – both in China and overseas.

While the WeChat framework doesn’t exist in the UK just yet, the tactics employed to enhance user experience, achieve sales and convert customers into loyal buyers in China via mobile can be adopted by UK retailers using available technologies and channels.

Personalise the shopping experience with an app

A mobile-friendly site is imperative, but an app will be even more beneficial. It personalises the shopping experience and streamlines the path to purchase with its layers of functionality and engagement, which are proven to drive conversion and revenue.

In China, traditional marketing channels are gradually losing their ability to attract new users, and standalone retailer apps no longer have the same clout as an account on WeChat. The same goes for retailer’s own mobile sites – WeChat can reach a far larger target audience.

A lesson for retailers in listening to the market and placing investment where customers spend their time – 94% of users log in to WeChat every day.

Care about content: engage and entertain your customer

Social media and mobile marketing strategies need to be dynamic, engaging and, most of all, relevant. Posting audio and video content, news and promotions are proven methods of adding value to a brand and building positive relationships with customers, but it’s also important to keep exploring new, interactive channels that appeal to the demanding consumer.

In China, endorsement by online influencers is creating new marketing opportunities for sellers. Online beauty retailer Feelunique not only has its own official WeChat account but has cooperated with other WeChat influencers whose followers are interested in cosmetic and personal care, and regularly share Feelunique’s content and product details. Feelunique can benefit many times over by providing a better mobile purchase experience; converting customers from other sources into followers, engaging them with useful content and stimulating sales directly. In the UK, forming partnerships with influential bloggers offers the same potential.

Peer-to-peer recommendation carries weight and sharing new purchases on social media is second nature to the Chinese consumer. Encourage sharing by UK consumers on social media by offering incentives such as samples or coupons. It will increase trust towards the retailer and helps to increase conversion rates.

It’s crucial to speak your customer’s language. For example, Chinese consumers have nicknames for popular branded cosmetic products they refer to when discussing beauty issues within online communities. To help customers find the right product through search engines or on-site search, online retailers add these nicknames alongside the actual product name.

Make payment painless

Mobile shopping requires a convenient payment system. Nobody wants to spend ages on a tiny keyboard typing in their card details each time they purchase an item. Since 2010, the People’s Bank of China has issued over 200 licenses to non-financial institutions to provide third-party payment services and declared a national mobile payment standard. This has led to explosive growth in the Chinese mobile payments market – increasing by almost 25% in the past 12 months.

There are plenty of convenient mobile payment solutions available in the UK, which retailers should embrace. Apple Pay and Google Wallet are leading the way and it is will be interesting to see how well Android Pay, which launched in the UK in May 2016 takes off. If retailers want to encourage mobile commerce, it’s essential they offer one-touch payment options.

The next step is to integrate mobile commerce with offline. Many retailer apps on WeChat include a barcode scanner function, allowing users to quickly scan the label on a physical product instore and compare prices or choose to purchase on their phone. An idea that UK retailers can easily implement.

Don’t dismiss older technology

QR codes are ubiquitous in China – one of the main reasons for their success is that QR codes contain URLs and Mandarin is fiddly to type. When WeChat made a QR code scanner a built-in feature it brought the technology to millions of users, and is proving a particularly useful tool for marketing incentives such as discounts and VIP cards, both offline and online. Purchases can be paid for on their phone via QR code.

The QR code may have been ahead of its time when it was first introduced in the UK in 2011, and the subsequent years represent a lifetime in the mobile commerce development world. A whole new generation of people shopping primarily on their mobiles, plus more people willing to do so have emerged, so the value of the QR code should be re-examined.

China has a highly developed and integrated approach to mcommerce, but the UK has inherent advantages Chinese retailers can only envy. Mature multichannel infrastructure is pioneering while geography is on your side in terms of logistics.

It’s all about streamlining the experience.

China’s infamous Singles Day on 11 November had just recorded that 90% of its sales these years comes from mobile, with Black Friday upon us, my guess is that the percentage of purchases made by mobile will continue to break records.

What is Logistics?

Logistics is a term used to define the process of moving goods from point of origin to point of use, notwithstanding the process of reverse logistics, which describes the process in which finished goods get put back into the Supply Chain to create added value.


What is logistics

History

The definition of Logistics has been a constant for many years, with origins going back to the Military, the term Logistics simply represents moving product from Point A to Point B in the fastest and most cost effective way possible.


Although answering the question, “What is Logistics?” is relatively simple, the processes are far more complex.

  • Tightening of the economy, currency fluctuations, increased competition and reduced margins have been catalysts for companies to take a closer look at their cost centres.
  • Manufacturing, Warehouse Space, Inventory, Technology, Shipping Costs, Packaging, Staff and Material Handling Equipment, all represent a significant cost to a company; but yet are necessary to operate an effective Supply Chain.

3PL Providers

Although many companies continue to manage their own supply chain, more and more companies choose to outsource their supply chain to specialist organizations; these organizations are called 3PL providers.

3PL providers manage inventory, storage and distribution of product. 4PL providers take it a step further; not only do they run inventory, storage and distribution; they also manage Customer Services, Reverse Logistics and other value added services.

Although this is not a new concept, we are starting to see more small to medium sized businesses adopting these options. Whilst it is beneficial for SMEs’ to invest into product development rather then capital expenses; it is also beneficial for SMEs’ to concentrate on sales and marketing rather than storage and distribution.


A Word of Warning

Freight companies are not 3PL providers, holding inventory does not make a freight company a 3P provider, when looking for a 3PL or 4PL provider do your due diligence, take a look at their current clients, take a look at their technology and finally make sure they can scale as your Business scales.


So, the original question “What is Logistics”

What is logistics? Logistics is a term, Supply Chain is the process, whatever you do make sure you can get your product from point A to point B as quickly and efficiently as possible. Here at 3PL we can guarantee the use of a third party will add value to your business.

See more information on third party logistics here…

 

Online Spending

April Online Spending Growth – Fastest Rate for 16 Months

Visa Europe’s UK Consumer Spending Index for April has shown the biggest spike in online consumer spending for some 16 months

Smartphone, Laptop and Tablet Spending Online

Visa Europe’s UK Consumer Spending Index for April has shown the biggest spike in online consumer spending for some 16 months. Before April this year, it was December 2014 that last saw such a large spike as wintry weather took its toll on the spending of high street shoppers.

You may wonder why something of this nature is featuring on our logistics and fulfilment blog, but we think this news is definitely relevant. With the majority of our customers operating their own ecommerce websites and selling through various different marketplaces like eBay and amazon, then the news of online spending growing at the fastest rate for over a year, holds fair importance.

Minister of State for the Digital Economy, Ed Vaizey, dubbed the figures a reflection of Britain’s evermore tech-savvy consumers, and encouraged businesses to make the most of a “more digital Britain.”

The continued rise in ecommerce sales should come as no surprise given that the UK is one of the most developed digital economies in the world and a nation viewed as early adaptors of technology.

Visa’s figures show online spending growth hit a 16-month high in April, up 8.4% on the same period last year, whilst face-to-face spending remained relatively flat at 0.2%.

The UK and Ireland Managing Director of Visa Europe said that “growth in consumables remains evident, but consumer spending is increasingly focused on the experience economy. Eating out, booking holidays and discovering new experiences are all driving spending growth”.

“The average British person spends around £1,500 online each year,” the Minister of State for the Digital Economy added. He also said that he wants all UK businesses to be taking advantage of this and that they should make the most of the opportunity that the internet offers. With businesses embracing online technology, Britain is becoming increasingly stronger and more digitally minded.

Within the Consumer Spending Index for April, the only sector to report reduced expenditure was clothing and footwear, down 2.8% year-on-year, where unseasonal weather was attributed to have had an adverse effect on sales in these sectors. It can be safely assumed that the wintry weather throughout April played a big part on the overall sales for clothing and footwear, as high street chains were not reaping any sort of benefit.

Summary

Overall however, the most notable point to take away from the Index for April is that general ecommerce sales are growing, and fast. This latest data is certainly no surprise to the team here at 3P Logistics as our throughput in fulfilment of ecommerce orders continues to increase month on month. We foresee overall ecommerce sales continue to outstrip forecasts for the remainder of 2016 and beyond whilst buyer habits will continue to swing towards m-commerce (shopping using mobile devices in general)

3P Logistics provide for Brand Hatton

Hatton Boxing Chooses 3P Logistics

3P Logistics provide for Brand Hatton

Ahead of the eagerly awaited launch of its new “pride in battle” equipment range Hatton Boxing has partnered with outsourced supply chain specialist 3P Logistics. The UK based logistics company will handle the freight imports, store and distribute its product range.

Hatton Boxing

In addition to supplying the highly acclaimed Hatton Academies, 3P Logistics will also be fulfilling consumer orders placed via the Hatton Boxing website: www.hattonboxing.com

Inbound freight will arrive at our Wigan facility from Hatton`s manufacturing partner. The goods will be stored in a mix of pallet racking and shelf storage for both Academy and B2C picking requirements. 3P Logistics has also agreed to provide a number of value-added services including pre-retail and contact centre support.

“Hatton Boxing is a really exciting brand to be associated with. If it’s half as successful has Ricky was in the ring then it will be a hugely successful venture” said Mark Pawsey, Commercial Manager.

He continued: “Identifying that supply chain is an area of specialism very early on in the business journey can often be the difference between new business ventures flying or failing. Launching a brand encompasses many ingredients of which supply chain is just one of many critical components. It is therefore essential that businesses focus more so on their areas of specialism and what is deemed to be the core business. Time spent handling logistics is ultimately time lost in developing the brand and routes to market”.

Hatton Academy’s training and educational director Jon Eade, said: “When selecting our logistics partner we spoke to a number of parties and found 3P Logistics to be dynamic and appreciative of our requirements. We are confident that 3P Logistics’ account management support and flexible approach will mean that the company becomes a valuable extension to our business – leaving us to focus on what we do best.”

Mark Pawsey added: “By providing Hatton Boxing with a complete end to end logistics service, we are confident that we will play an integral role in the success of the “brand Hatton” for many years to come and look forward to a long and fruitful working relationship.

Just don’t ask me to get in the ring with Ricky!”

Order Fulfilment

What You Need To Know About Order Fulfilment

Order Fulfilment

As the online industry continues to grow at an ever-increasing pace, the demand for outsourced fulfilment companies has never been higher. After all, sellers don’t set out to become warehouse keepers when their main aims should be to source and sell great products.

Deciding to outsource your order fulfilment is all about timing, and centres around three essential trigger points:

1: Sufficient demand

2: Sufficient margin

3: The need to employ people or take on a warehouse

What is Outsourced Order Fulfilment?

To summarise, Order Fulfilment is defined as asking someone else to pick pack & ship your orders, so you don’t have to. Any leading third party fulfilment house would house numerous retailers under one roof, providing them with a range of additional support services. Such services could include anything from web photography and listing support through to enquiries handling and inbound telesales.

For a nominal cost per order, outsourcing you fulfilment frees you up to take care of the more virtual aspects of sourcing goods and marketing.

How Would I Know When to Outsource?

Running a successful online business will normally result in various growing pains along the way. A lack of space, time, expertise and cash are common stumbling blocks normally associated with business growth.

Some sellers that have a clear business plan decide to outsource from day 1 and spend their time in other key areas of the business. Other sellers decide to keep things in-house until they have established “proven demand”. With outsourced fulfilment you only “pay for what you use” hence when orders are low your costs remain low.

A minimum of 100 orders per week, or around 15 orders per day is a useful threshold at which some of the above constraints should be evident and sufficient benefit can be obtained from outsourcing.

Can I Afford to Outsource?

The more pressing question is can you afford not to?

If space, time and know-how are holding you back, then outsourcing to a reliable fulfilment house is a sure-fire way to regain control of your business. If you intend to sell on line for a bit of “pocket money” then fine – You should stay as you are, enjoy it and treat it as hobby.

If you have greater ambition to be a sizeable seller, then sourcing great products at the right price and taking them to market will require dedication. Employing staff, taking on an industrial unit etc, all contribute to your fixed costs. Meanwhile your cost per order equivalent is more likely to exceed that of any flexible “pay as you use” alternative.

More often than not, fulfilment houses are able to pool their throughput with the major carriers to obtain lower delivery tariffs. In tapping into such buying power, savings can be realised and often offset the cost of picking your orders.

How can I expect to benefit from letting someone else pick & pack my orders?

There are numerous benefits to be realised as result of “letting go” of the physical aspects, and these include:

  • More time to source & sell
  • Space is no longer a concern
  • A better work/life balance
  • A scalable business (complete flexibility)
  • Steal a march on the competition
  • Tap into existing industry expertise, and knowledge of “best practice”
  • Potential to lower your operating costs
  • Potential to grow your sales through channel expansion

Demand for outsourced order fulfilment is growing as quick if not quicker than the online world itself as more and more sellers realise the advantages of working with a third party fulfilment company.

You can get more information on picking and packing orders from our other blog posts.

A brief re-cap

If you value your time and are serious about growing your online business then outsourcing should be a viable option for your business. Employing warehouse staff and taking on industrial or self-store units merely adds to your fixed costs, reduces flexibility and increases risk. Alternatively, you could consider moving some of your lines to a fulfilment centre, like 3P Logistics as an initial move. Instead of taking on more staff or space, examine the possibility of moving stock that takes up an appropriate percentage of your orders into fulfilment and study the cost and time benefits incurred. It can offset your expansion costs, and open up your eyes to the benefits.

Cross Border Trade and E-Commerce

cross border trade blog

20 years after the first recorded online sales transaction, e-commerce is now a worldwide market comprised of merchants ranging from multi-national retailers to single owner-operator businesses.

While the earliest days of e-commerce sales were dominated by the bricks and mortar retailers that were already well established, new technologies have allowed those smaller, and newer market entrants to quickly grow market share and revenue streams by rapidly responding to the constant change in market dynamics. This in turn has paved the way for cross border trade.

UK SME’s currently trail behind the rest of Europe in terms of exports, according to recent research from the UKTI. Of an estimated 5.4 million businesses in the UK, with Small to Medium Enterprises currently accounting for 99% of those businesses, you’d think that it would be more than one in five that currently export. France are one in four, and Germany one in three.

Although these are the figures for the UK, France and Germany, cross border trade is growing. 33% of retailers surveyed currently sell on international sites and one in four of those retailers earn more than 20% of their revenue through international sales. In 2013, cross border e-commerce sales between Australia, Brazil, China, Germany, the UK and the US totalled $105 billion. By 2018, this figure is said to jump to $307 billion. A near 200% increase. With this in mind, Bigcommerce’s Democratization of E-commerce Report predicts that US SME’s e-commerce market alone will exceed $100 billion in total sales in 2015.

However, there are still problems that retailers face when it comes to trading internationally. Examples such as language barriers or even fulfilment processes are amongst the most common. Retailers only need to invest time to research and build a strategic plan before taking the leap into cross border trade.

Trade between two nations is an excellent way to strengthen international bonds because it helps to create long lasting partnerships where before none may have existed.

3P Logistics and Black Friday

Are You Ready For Black Friday 2015?

3P Logistics Black Friday

For those who don’t know that Black Friday is this Friday, where have you been? Yes, Black Friday is this Friday, the 27th of November.

Certain analysts predict British shoppers alone will spend up to £1bn on tech, games, clothes and other goods in 24 hours, whereas Visa Europe believes that shoppers will spend up to £1.9bn during the consumer holiday. The consumer holiday being the whole weekend, which ends with Cyber Monday on November 30.

Third party logistics businesses and order fulfilment providers are ready for the sales weekend that starts with Black Friday and ends with Cyber Monday. Here at 3P Logistics, as an E-commerce fulfilment provider, we are in close contact with our partners, especially over this period. The warehouse will be full of products ready to be sold online at discount prices. Stock has been moved to premium locations for ease of packing, in order to cope with the high demand that comes with the largest sales event of the year.

Of course, we’ve all heard of boomerang Thursday also. No? Well, boomerang Thursday is given its name due to the amount of returns of products from customers that businesses like 3PL have to deal with. It’s just as important to be able to process these returns smoothly and efficiently, as it is to get orders out on Black Friday itself.

Amazon have decided to take the sting out of Black Friday and list certain products at marked down prices all week on the run up to Black Friday. 7,000 deals were available from yesterday – five days earlier than the official sale day falls. Customers will be able to get their hands on new offers every 10 minutes for the entire week, with items ranging from the Amazon Kindles to a Withings smart-watch. Retailer’s lightening deals are back. Limited items are available for a short period of time with Prime members having the ability to see these deals before other shoppers.

In the US, expenditure is set to be far higher than that of the UK because of how much it is established as a big sales event. For America Black Friday marks the beginning of the Christmas shopping period, and takes place strategically on the first shopping day after Thanksgiving.

It is clear for everyone to see what the rewards of online retailing actually are, but having to deal with customer demand during the spike that is Black Friday, during the increasingly demanding period that Q4 is, can make it a minefield. Luckily enough, 3P Logistics Ltd are the perfect fit for you online retailers.
Nonetheless, the one big question surrounding Black Friday is whether or not your business can afford not to take into account every essence of making a Black Friday sale. There really is no accounting for the way in which shoppers adapt their spending habits for retail events like this so it’s really important that retailers have every box ticked. Therefore it is good that retailers have grown up recently, most specifically in terms of managing customer expectations.

Tesco are a great example of this. They have taken a completely proactive approach to Black Friday this year and released a message online that warns Black Friday and Christmas shoppers that there will be delays with their next-day click-and-collect services, as one can imagine. It’s not just the smaller online sellers, big supermarkets and other multi-channel retailers have to set expectations within their customers. This is what gives you an edge on the lesser prepared retailers, can you really afford to give THEM the edge?
We will see, this Friday, the 27th November.

Read More about 3P Logistics >>

3P Logistics Award Winners

Award Win For 3P Logistics

3P Logistics and Greater Manchester Chamber of Commerce

On Friday 20th November 2015 3P Logistics attended the Wigan Business Awards as finalists for two awards on the evening. The Best SME Award and the Best Employer Supporting Apprentices Award were up for grabs on the night.  We were delighted to walk away with the coveted title of Best SME in Wigan and hopefully many  more rewards will follow.

As the leading service provider for e commerce warehousing and logistics in the North West the award is a fitting tribute to a fantastic team effort.

Here’s to more accolades in 2016.