E-fulfillment has different wrinkle in Europe
By Eric Kulisch
Logistics trends associated with online retail in Western Europe differ somewhat from those in the United States.
Germany, France and the United Kingdom account for 71 percent of total European e-commerce sales, with the United Kingdom being the most developed market at 12 percent of all retail sales.
There could be future demand in Europe for smaller e-fulfillment centers and cross-docks around urban areas and also shared user consolidation centers for home delivery similar to the kinds used to consolidate deliveries to retailers in malls, airports, or downtown shopping districts, according to a February report by real estate services firm Jones Lang LaSalle.
Internet merchants are beginning to counter the move by brick-and-mortar retailers to offer customers store pickup for goods purchased online — “click-and-collect” — which itself was a reaction to the threat of Internet merchants. Since e-tailers don’t have their own stores, they are entering into alliances with small convenience stores or post offices to offer collection points, or have set up collection lockers in different locations, such as in shopping centers or industrial parks or at railway stations. For example, Land Securities gave Amazon its first foothold in the United Kingdom for a collection point at its One New Change shopping center in London in 2011, according to the report.
Amazon has a similar arrangement in Seattle, New York, Los Angeles and San Francisco with 7-Eleven and other outlets using a wide range of couriers. The Amazon Lockers service is designed to give shoppers an alternative to sticking around their home waiting for FedEx to arrive with a delivery. The customer receives an e-mail with a pick-up code, which is then entered on a touchscreen to open the door of the locker containing one’s package.
Online food retail has flourished in Western Europe. Most grocers pick orders from their stores, but as volumes increase it is likely that dedicated fulfillment centers will proliferate, Jones Lang LaSalle predicted.
In the United Kingdom, for example, Tesco is now developing its sixth e-commerce warehouse in or around London for delivery to homes or collection points. Five of them are highly automated and mechanized built-to-suit facilities and the new one will be the most of all, enabling staff to fulfill a higher number orders more quickly and efficiently. Tesco plans to roll out more online fulfillment centers in cities such as Birmingham and Manchester.
In the Netherlands, grocery chain Albert Heijn has followed a similar path to Tesco. It started by picking orders from stores, but now has three specially developed “home shopping centers” that are able to reach 60 percent of the population, including via transshipment centers, where deliveries are transferred from large trucks to smaller delivery vans.
Demand for dedicated e-fulfillment facilities is expected to grow. Research firms estimate that online retail sales in the European Union will grow between 12 and 14.5 percent, in the six years ending in 2016, well exceeding the pace of store sales in a region facing a prolonged recession. Overall, retail sales will still be dominated by those in physical stores and that will be the primary focus of logistics networks, Jones Lang LaSalle said.
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