Supply chains without borders

Jonathan Pilbro VP of fashion and beauty at DHL tells us about driving international sales through innovation in supply chains.

This Christmas is more evident than ever that online and multi-channel shipping continues to grow. According to Adobe’s Digital Index 2014 Online Holiday Shopping Forecast 24% of online sales in the UK during the Christmas season are predicted to come from a smartphone or tablet, with a predicted peak in online spend of $447 million on the 1st of December. This highlights the need for innovation in the operation of supply chains to keep pace with this rapid growth and complement new service and product offers.

The fashion sector is one of the leaders in the digital revolution. The clothing and accessories market is looking forward to a period of sustained growth with an overall continued annual growth rate (CAGR) of 19% and online CAGR of 41% (2012-2017).

International multi-channel is a key area for this growth. The Internet has undoubtedly made the world a much smaller place and digital commerce is forcing supply chains to operate without borders.

As with most operations adding an international element adds further complexity to the supply chain. The same can be said for domestic digital retailing because of the specialist local knowledge required and the different existing infrastructures when expanding into new territories. Address systems, returns, payment methods and a variety of collection points are just some of the practical elements that need to be taken into consideration.

Responding to these challenges, logistics providers are innovating and investing. Forging key partnerships in new territories is crucial, while multi-user networks are a cost-efficient way of entering a market where the first, difficult steps of in-country brand development can be online.

At DHL we’re working hard to support our customers in both the UK and across Europe to grow internationally. For example, we work with Tom Tailor, a German lifestyle clothing brand selling retail, wholesale and via online shops in 21 countries.

DHL has built a new state-of-the-art international facility in Hamburg, Germany to facilitate Tom Tailor’s international distribution. The new technologies, which include telescopic conveyors with vacuum tube lifters to facilitate the ergonomic unloading of boxes, automated packing machines, mean that the new facility is set to grow annual volumes from 40 million units in 2013 to 100 million by 2020.

Tom Tailor’s European growth has also seen increased demand for Control Tower systems to manage the increasingly complex road transport flows, moving product and equipment between countries and operating locations.

As the international multi-channel market continues to experience rapid growth, it is crucial for supply chain operations to keep pace and innovate. This will not only support those businesses that are already expanding but also help those whose international multichannel options had previously not been viable. Whilst this can be challenging, using new technologies to create robust, flexible and transparent supply chains can deliver a seamless consumer shopping experience, and ultimately a platform for continued growth.