The supplier is Ellos’s face to the outside world
"We have no physical meetings with our customers, it is therefore extra important that we keep our promises," says Leif Johanson, chief operating officer at Ellos Group.
Ellos's logistics solutions
Ellos’s business is remote sales of fashion and home interiors throughout the Nordics, and efficient deliveries are vital to the company. And with no shops, the performance of the company’s logistics partner takes on a vital role in contact with the customer.
To Ellos, logistics is key to the company’s success.
Thousands of parcels are dispatched every day from the central warehouse in Viared, to customers throughout the Nordics. Ellos is one of the biggest e-commerce fashion and home interiors businesses in the Nordic region, with sales of around SEK 2.4 billion.
- Logistics is a broad concept, covering everything from inventory management to distribution and customer contact at delivery, says Leif Johanson, head of operations, and the person ultimately responsible for logistics, at the Ellos Group. According to Leif Johanson, the key to success in deliveries is attention to detail.
- Our logistics must be on the spot in every respect; we have to deliver to the right place, at the right time and in line with the agreement with the customer. It means keeping our promises, he says.
And accuracy is not about being fastest.
- If we’ve said that the delivery will take seven days, it has to take just that; if we say that it will arrive between 11.00 and 11.15, we have to keep to that time frame. Whoever delivers our goods is our face to the outside world, and the link to our customer. Our partner has a hugely important role in creating customer relationships; part of logistics is the service provided during contact with the customer.
What is more, if there are any problems during delivery, the way the partner deals with it is critical.
- Successful problem resolution can lead to extra strong loyalty, rather than creating customer dissatisfaction.
PostNord takes care of every stage of Nordic distribution of both parcels and direct mail on behalf of Ellos.
Ellos’s target group is women in the age bracket of 30-55 years, and these represent around 50 percent of the company’s database in Sweden, Finland and Norway. In Denmark, the figure is just 16 percent.
- The way Danes shop differs slightly from habits elsewhere in the Nordics. Another factor may have been that we used not to offer Dankortet as a payment option before, says Mikael Andersson, distribution system developer at Ellos.
In general, purchasing behavior is fairly similar across the Nordic region.
- Nordic customers buy a little more per occasion. Swedish and Finnish customers are very similar.
Offering free delivery and free returns has become increasingly industry-standard in e-commerce. But Mikael Andersson does not believe that carriage needs to be free of charge.
- Our returns service works well and is cost-efficient; a return costs around SEK 30. And customers do not see the charge as a negative.
Today Ellos offers free returns in Finland, where legislation has up to now forced e-sellers to offer it. In his view, the rules on returns have meant that many e-sellers have opted out of the Finnish market, because it is not sustainable financially.
- Free returns drives up the use of returns; in Finland, the rate of returns is 50 percent higher than in Sweden.
In June this year, new EU rules come into force, allowing charges for returns to be applied in Finland too, but the change will probably not happen overnight.
- E-sellers will probably be watching out for what others will do. We’ll have to see whether the change in regulations will alter the attitude of Finns to returns.
Ellos's logistics flow – step by step
Ellos's main goods flow comes from Asia, by sea with weekly arrivals at the port of Gothenburg. The containers are transferred by road at an even tempo to Ellos DC in Viared for unloading.
|The main facility in Viared is approximately 90,000 m2 in area, including 70,000 m2 of warehousing space. Ellos also has two external reserve warehouses, each with a capacity of around 10,000 m2 alongside DC.|
On a normal day of operations, some 15,000–20,000 parcels are sent to customers using PostNord MyPack Collect service.
Around 45 % of the volume goes to Sweden, 25 % to Finland, 15 % to Norway and 10 % to Denmark. Ellos also sells in Russia via a franchise concept and operates a product range swap with La Redoute in France.
The whole of Denmark, 80 % of Sweden and 40 % of Norway are served by overnight deliveries. In addition, express deliveries are also offered in 25 % of Finland via an air service on the Jönköping–Helsinki route.