From a building specialising in tech start-ups close to Silicon Roundabout in London’s Shoreditch, 31-year-old entrepreneur Tom Allason runs Shutl, a web-based delivery service for online retail. Shutl, which launched in 2008, backed by a total of £1.65 million investment, is a business based on a simple premise: that the delivery part of the online retail supply chain is chronically unreliable.
“Last year, failed delivery attempts or complete delivery failure by courier companies cost British retailers upwards of £1 billion,” says Mr Allason, who set about analysing what didn’t work.
Rather than taking on the traditional hub-and-spoke carriers, who make deliveries of ten miles or more and account for 97 per cent (by volume) of the UK delivery market, he concentrated on the remaining 3 per cent, made up of some 3,000 local courier companies. Shutl, which counts Argos, Maplin, Coast and Oasis among its clients, acts as an aggregator for local couriers by pooling capacity and offering it to retailers, who promote it on their websites.
By offering two rapid services - within 90 minutes of purchase or in a one-hour window on the same day or any day - Shutl is helping city-centre retailers, hobbled by expensive bricks and mortar, to take on Amazon and other e-retail giants. “Where our delivery price is less than 10 per cent of the order value, retailers are seeing three times higher conversion rates and consumers are more likely to actually make the purchase,” claims Mr Allason. “So we have the capacity to make a really meaningful impact on a retailer’s bottom line.”
Smart locker boxes are increasingly used by retailers for overnight delivery or by customers wishing to return goods
Efficiencies leading to savings are also part of the solution offered by fast-growing Collect +, a parcel drop-off and collection service, built around a network of 4,500 corner shops and convenience stores across the UK. Working with fashion retailers, including Dorothy Perkins and House of Fraser, the firm has focused on the returns part of the supply chain.
“If you’re a fashion retailer, your typical returns rate is about 30 per cent,” says Collect + chief executive Mark Lewis. “Returns are the biggest single source of supply in their business. Our service is fully-tracked, so whenever anything is dropped off or scanned in-store, we can tell retailers what is coming back before it arrives, so they can manage their warehouse and the processing of those returns.”
Smart locker-box services, such as ByBox, focus on return logistics too. The company, whose core business is the delivery of equipment to engineers for brands like Coca-Cola and Sky, have around 300 electronic drop-off lockers (with a further 300 to be installed this year) in garages, railway stations and supermarkets around the UK. These are increasingly used by retailers for overnight delivery or by customers wishing to return goods. The lockers are operated by inputting codes into a keypad or touch-screen.
But while most niche services concentrate on hitherto inefficient links in the supply chain, software firm SysRepublic, with its software package Real Time Integrator, has shrunk the entire journey from supplier to supermarket trolley. Now working with Tesco, Sainsbury’s, Asda and Marks & Spencer, SysRepublic’s Real Time Retail system smoothes out supply-chain glitches by enabling data flows from individual sections of the chain to be visible globally.
“Retailers live or die by stock availability,” says Jerry Boersma, who as chief technology officer, oversaw the software’s design. “They have a lot of information that’s locked away in computers, such as sales and stock numbers, within the various points of the supply chain. So understanding what your warehousing holds in terms of inventory at any point in time, what you’ve got in transit and in-store, and what your sales demand is, is crucial.
“We have integration software that gets access to those points and centralises it so that it flows around the system in real time, enabling retailers to make better decisions.”
