We Deliver on All Leif Johanson’s Promises

Viared in Sweden is a busy place. Here, just outside Borås, is Ellos' central warehouse, from where, every day, tens of thousands of packages are sent out to customers all across the Nordic region. To make this work, Ellos collaborates with PostNord.

"We have to deliver to the right place at the right time. If we've said that the item will arrive the next day, then it must do that, even if you order on a Sunday. For this to work, you have to have a good logistics partner. And luckily we've got one."

Our logistics solution for Ellos

Ellos sells fashion and home furnishings online and by catalogue all over the Nordic region and delivery efficiency is critical to the business. The absence of any stores makes the role of logistics partners vitally important in encounters with the customer.

For Ellos, logistics are critical to the company's success. From the central warehouse in Viared, tens of thousands of packages are sent out to customers all around the Nordic region. Ellos is one of the region's biggest e-commerce companies within fashion and home furnishings, with a turnover of approximately SEK 2.4 billion.

It's the last mile that counts

"Logistics is a wide term covering everything from warehousing to distribution and customer service on delivery," says Leif Johanson, operations manager at Ellos Group with chief responsibility for logistics.

The keyword when it comes to successful delivery is "precision" according to Leif Johanson.

"Our logistics have to be precise in every way. We need to deliver to the right place and at the right time in line with the agreement we have made with the customer. In other words, we have to keep all our promises," he says.

And precision is not about being the fastest.

Logistics is an important part of the service

"If we've said that delivery will take seven days, then it must do that. If we say that the items will arrive between 11 am and 11.15 am, then this time window must be complied with. The partner delivering our goods is our public face and our link to the customer. This partner plays a key role in our customer relations. Logistics is also customer service.

When there are issues with the delivery, the actions of the partner are also decisive.

"Instead of a dissatisfied customer, successful problem-solving can create an extra strong loyalty."

PostNord handles all distribution of both packages and direct advertising for Ellos in the Nordic region.

Ellos' target group is women in the 30-55 age range, and in Sweden, Finland and Norway, 50% of this group can be found in our customer database. The figure is only 16% in Denmark.

"The Danish shop a little differently than the rest of the Nordic region. We didn't have Dankort as one of our payment options before. This may have had an effect," says Mikael Andersson, distribution developer with Ellos.

In general, buying behaviour is relatively similar across the Nordic region.

"Norwegian customers are buying more per transaction. Swedish and Finnish customers are very similar."

A growing industry norm within e-commerce is offering free shipping and returns. But Mikael Andersson does not think that shipping has to be free.

"Our returns service works well and is cost effective, a return costs around 30 kroner. And our customers don't experience the charge as something negative either."

Ellos currently provides free returns in Finland where national legislation has until now obligated e-traders to offer this service." He believes that the rules on returns have led many e-commerce companies to exclude the Finnish market, since it is not economically viable.

"Free returns lead to increased returns behaviour. In Finland, the proportion of returns is 50% higher than in Sweden."

New EU rules will be introduced in June which will allow returns charges to be levied in Finland too but the change will probably not happen overnight.

"E-commerce companies will no doubt be a little hesitant to begin with, waiting to see how others handle it. We'll see whether the changes to the rules will alter the returns behaviour of the Finnish."

Facts

• Ellos Group is the leading fashion and home furnishings e-commerce group in the Nordic region, with its Ellos and Jotex brands. Ellos Group has 800 employees and in 2013 it had a turnover of SEK 2.4 million.
• The majority of Ellos' goods come from Asia and are shipped to the port of Gothenburg, with one arrival per week. The containers are then transported by a steady flow of lorries to Ellos DC in Viared for unloading.
• The main facility at Viared covers approx. 90,000 m2 and around 70,000 m2 of this is occupied by the warehouse. Ellos also has two external buffer warehouses associated with the DC, each approx. 10,000 m2.
• On an average production day, approx. 15,000–20,000 packages are sent to customers using PostNord's MyPack Collect service. Approx. 45% of this volume is sent to Sweden, 25% to Finland, 15% to Norway and 10% to Denmark. Ellos also sells to Russia via a franchise concept and exchanges product ranges with La Redoute in France.
• The overnight delivery service is available over the whole of Denmark, 80% of Sweden and 40% of Norway. 25% of Finland can also access an express delivery service via air freight from Jönköping to Helsinki.