What advice can a man who has experienced more than thirty years of global growth in retail give to internationally expanding e-commerce companies?
Well, first and foremost – don’t underestimate the importance of logistics and deliveries. There’s no way of getting around it.
Previous to his retirement, Erik Nauclér was responsible for building the international transport network and managing the logistics involved in entering new markets for H&M, one of the world’s leading retail brands. H&M has more than 4 000 stores in 61 markets, and also has a strong online presence. When Erik Nauclér first joined the company in 1981, there were around 122 to 124 stores in 5 countries, of which about 100 were located in Sweden, the country where H&M was founded.
After hearing Erik speak at the e-Commerce conference in Stockholm in May, Erik and I sat down for an interesting talk about the logistics industry. In Erik’s mind, there is no difference between a traditional bricks and mortar shop and an e-commerce outlet when it comes to the demands on the logistics supplier: “You have to live up to consumers’ expectations when it comes to deliveries.”
In the past few years, Erik has been consulting e-commerce startups, and he has several pieces of advice to share that he believes apply regardless of sales, distribution and delivery method:
1. The biggest logistics company or carrier is not always the best choice
As a small or midsize e-commerce company, you will often find that the bigger players will not pay a lot of attention to you or invest enough resource into your business. The “one size fits all” approach often promoted by the global players does not allow for a lot of flexibility or really taking care of the client and their business goals.
2. Do NOT focus on price only
Retailers often put a string of demands on their manufacturers, such as quality, environmental sustainability, work force protection, ethical business practices, etc.. However, when it comes to transports, logistics, and deliveries, far too often it is the price that is the only deciding criteria.
3. Establish a long-term relationship with your supplier
If you sign one-year contracts, you will have three to six months of implementation during which you experience hick-ups and problems, three months when things are starting to run smoothly, and then you have 3 months where you have to prepare and conduct a new purchasing process. Why would you not like to keep your peace of mind for a bit longer?
4. Be open to change
Even though long relationships with suppliers can be rewarding, you can always learn more. Be open to new influences, meet other suppliers and experts from the industry in order to pick up best practices and improve your solutions. And if the supplier gets fat and happy – throw them out!
Jonas Prosell, Head of International Business Development, Direct Link Sweden