While we are spending more and more time on social websites and we are arranging a significant part of our tasks via ”smart devices”, many of us would like to create something tangible in the physical space. So it is not surprising that more and more people all over the world start tinkering. The most interesting thing is that the DIY (do-it-yourself) “fever” and the online trends not only converge, but they reinforce each other. The social media are filled with DIY ideas and blogs, vlogs and videos can help even the most technically-handicapped to repair furniture, make decorations or even... build a house.
Web pages provide us with useful tips, technical information, but also with the possibility to buy materials necessary for building the dreamed object or building. And they are not just small components. Nowadays we are able to order bagged concrete, bricks, timber or sanitary products.
Welcome to the online world!
Until the late 1990s tinkering was not just a hobby in the countries of Central and Eastern Europe. It was rather a contingency solution and a part of the folklore as well. Most men, regardless of their profession, had to be an electrician, plumber, gas man, gardener, carpenter and a decorator, all in one. Then with time life was becoming more comfortable so tinkering started to lose its appeal. Nevertheless, in the recent years the “do-it-yourself” approach is regaining its lustre.
It has a positive effect on the turnover of DIY shops. For example, in 2016 the renowned DIY store, Praktiker, increased its turnover in Hungary by 20% as compared to the previous year. The success of a chain store largely depends on how quickly it reacts to the economic and consumer trends. Praktiker launched its own online shop in 2009 because they saw that shopping from home doesn’t stop at electronics and cosmetics and they were quite right. Online sales of this chain has been growing steadily since then. First years were rather modest whereas in 2014 the sales took off rapidly.
The Praktiker e-shop accounted for 1.6%, of the entire turnover in 2014, 4.1% in 2016 and in 2017 the share was almost 6%. In the coming years the e-commerce business will most likely keep on growing due to the generally positive condition of this sector.
It wasn’t easy for Praktiker to develop an online distribution system. While for example e-shops with electronics could rely on the mature delivery services of courier companies, DIY shops faced the problem that not all of its products, due to their size, characteristic or volume, could be delivered home by courier companies whose vehicles were not able to perform distribution tasks for the whole country. In 2010 Praktiker started to look for a carrier partner in that would be able to deliver palletised shipments nationwide to the customers of its online shop.
And then we came
We received the tender invitation from Praktiker and due to our extensive experience in domestic and international distribution we knew that this service would ideally complement our core business. Praktiker was interested in B2C deliveries rather than B2B and ten years ago it was not a standard service in the portfolios of logistics operators.
There were several reasons for our interest. On one hand, serving this sector, and the retails industry at the same time, in the complete supply chain, at the point of loading, at the carrier and at the point of unloading required great experience of professionals who knew the rules and processes of logistics. Another challenge was the end consumer: in the B2C sector, at the end of the chain there are individual customers who behave completely different from corporate clients.
The business is all about making them satisfied with the products they bought and the accompanying services. For that reason we recommended a solution that was not a classic distribution model but which rather focused on the client of our customer, i.e. the customer of the e-shop. Our focus turned to their needs and expectations. This concept convinced the DIY retailer to entrust Raben with the distribution task that was pioneer and slippery in those days.
A unique standard
From the systemic point of view the operation is simple. Using the myRaben.com platform Praktiker informs us that one or more pallet orders have been prepared in a particular store. Minimum within one working day of the notification we pick up the shipment and deliver it to the consignee on the next working day. We don't deliver the products from Praktiker directly to e-customers but rather to one of our cross-docks in the country and then to the central depot in Dunaharaszti. In cross-dock warehouses the shipments are loaded on groupage linehauls and then delivered to consignees following prearranged delivery routes.
When we pick up the shipment from the shop, the Praktiker online system sends an e-mail to the client with the information that the ordered product is on its way. Later our employee, and to be precise the driver of our subcontractor, contacts the customers to arrange the time of delivery. The e-mail contains a unique link generated by myRaben and after clicking on it, the customer can enter the website and follow the status changes of the shipment without any registration. After receiving the list of the addresses from our transport specialists, drivers calls customers one day before the delivery to agree the details. Direct contact between drivers and customers is the most efficient and it minimizes the risk of errors. Drivers normally deliver shipments to the door. However, if requested on the Praktiker website and physically possible, drivers can take shipment into the house or flat as well. It is the part of our service that is different from the classic B2B groupage transport.
What we promised should be kept
Praktiker had three fundamental expectations from us.
- Firstly, as mentioned above, we should carry out nationwide distribution of Praktiker palletised goods. They underlined it because they discovered that on the Hungarian market the number of logistic providers that could do that was strongly limited.
- Another expectation was to arrange the distribution according to certain standards but extra tasks would have to be handled as well, i.e. manual loading or taking shipments into houses or flats.
- The third expectations was as important as the first two and it was the necessity to be ready for order volume fluctuations, which is common for the DIY sector.
Naturally, just like in the case of all our partners, we defined standards and fixed the metrics and indexes in order to assess the quality of our service. It was essential that the most important ’’standard’’ of our services was reliability. The rule was simple: we should keep our promises to customers. And that applied both to Praktiker and to Raben. An e-entrepreneur may promise a 24h or next day delivery in the Christmas peak when the turnover is four time higher than during the whole year, on on Black Friday when the volumes may increase tenfold. However today no logistics operator in Hungary or in Europe is able to manage that because the e-commerce sector is growing so rapidly and the construction industry is so changeable that it is impossible to prepare for that in any way. For this reason the solution is reliable and responsible communication with online customers. At the time of turnover peaks, Praktiker informs customers that deliveries take longer because they want to keep the promises concerning time slots and deliveries on the agreed day. Customers may sometimes change their plans in order to stay at home and collect the shipment We really don't want to disappoint them.
The B2C logistics is challenging by itself but to serve an e-shop of a DIY retailer calls for innovative and modern solutions from the operator. The original concept was to integrate the turnover of the Praktiker e-shop into our mature groupage transport system in order to utilize the synergies. The experiences of the initial phase of cooperation allowed us to develop another solution, i.e. a dedicated service based on standard charges independent of order specifications. Nowadays 50% of the turnover of Praktiker e-shop is delivered by a dedicated fleet.
The fleet was optimized for the needs of B2C so the size and weight of vehicles is suitable for moving around residential areas. The vehicles are equipped with manual unloading tools and some of them have tail lifts. Drivers are regularly trained because personal contacts with customers are connected with great responsibility. There is a need for empathy, patience and deep understanding of transported goods. The driver who delivers goods home represents Praktiker in the eyes of the customer. It is no coincidence, that only those subcontractors and drivers who meet the strictest conditions can work in the B2C sector. The empathy, patience and helpfulness of drivers is necessary because servicing retail customers is more complex and sensitive. When shopping online customers often forget that instead of to the door, the goods should be carried into the house.
In these cases both Praktiker and Raben show great flexibility. When it happens, the customer service of Praktiker and of Raben, especially the people responsible for online orders, look for a quick solution that would satisfy the customer. We face challenges not only during delivery. The pallets prepared by Praktiker stores, in a significant number of cases, do not look the same as in B2B transport where the shipment is a pallet with homogeneous content and there is no overhanging, which is important in order to load efficiently and to better utilise cargo holds of transport vehicles. In the area of DIY, a pallet can take an irregular form, since shipments may contain boxes with tiles together with plaster in bags and bricks, and even a wheelbarrow if necessary. We had situations when we transported external doors or scooters on pallets. In order to prevent these pallets from causing problem during loading, transport and unloading, the accurate size and weight parameters of the shipments should be provided due to road safety requirements and road transport weight restrictions. Moreover, the characteristics of the goods must be defined. Information flow between Praktiker and us is perfect and therefore the operations are so effective.
We grow together
Praktiker has chosen us as to be its distribution partner for 8 years. Satisfaction of the DIY shop depends on the satisfaction of its clients and various KPIs defining the distribution service. Praktiker has continuous access to them through myRaben platform, which allows for generating all kinds of necessary reports. Praktiker also regularly surveys the satisfaction of online customers.
Since the start of our cooperation this index has been rising alongside other qualitative indicators, like on-time delivery, which are continuously on the high level. We stepped into the world of e-commerce together with Praktiker and we are developing together. In 2011 we delivered 6-8 pallets of goods a day to online customers of Praktiker whereas today 150-200 pallets are delivered daily. During this time we have increased both quantity and quality. Our unique distribution system has become a standard in servicing e-commerce customers and many Hungarian operators follow our footsteps today.