Lecture 4 Flashcards
› Name the different logistics processes at the point of sale and classify them to stationary trade and e-commerce.
E-Trade Only:
Optimal Placement
Space Saving Storage
Shelves Stocking
Stationary and E-Trade Commerce: Goods inward Replenishment Processes Empties Handling Inventory Management Returns and Reclamation Delivery Service
Name the six steps of the “Fulfilment by Amazon” concept.
Goods Dispatch Storage Order Shipping Customer Service Return
Differentiate between hard and soft discounters.
Hard:
Concentration on the essentials, reduction to the absolute necessary
› Durable goods, limited number of articles
› Concentration to FMCG
› High quality of articles, focus to customers
› Spartan equipment (building, shelves, …)
› Simplicity as business model
–> ALDI
Soft: › Higher number of offered brands › More products (~3500) › Offers some services (e.g. online shop) --> PENNY
What is the difference between a own trademark and a brand.
Own / Unique Trademark: › Cheaper than ‘brand’ products › Own brands ≠ bad quality › Private labels are used broadly in discounters, supermarkets, textiles stores etc.
Brand:
› Customer recognize the slogan, the colors, the name etc.
easily and unconsciously, may even have emotional feeling to a
specific brand
› Delivers frequency = brings customer into the store
› Outline the success story of Aldi.
› Own trademark products with high-quality › Selected assortment › Small, but highly efficient employee teams per store › Always up-to-date regarding technology (modern checkout areas) › Lean and simple design › No Marketing
› Characterize convenience stores.
Convenience
stores are a follower of the classic corner shops
Demand is up: › Increasing number of single
households
› Consumers wish more service
› Changes in lifestyle
High Frequency Locations: › To and from work
› Downtown
› Railway station
› Petrol station
Assortment for „Mobile eater“ and
urgent needs
Value Added services: › Supply service, Gift service › Dining area › Lotto office › Extended opening hours
Explain the term shelf ready packaging
Shelf Ready Packaging (SRP) or Retail Ready Packaging (RRP)
…is the perfected secondary packaging to position products efficiently on the shelves while it’s visual appealing.
Must be easy to: Dispose (recyclable) Identify (Visual ID - Shopper ready) Shelf (stable, optimized package) Shop (Look good, easy to handle) Open (Easy instructions - easy handling - safe)
Why does the store layout have to be changed regularly?
Satisfying the consumer and their needs is the main goal.
Changing consumer demand:
> Change in turnover rate of existing SKU`s
› Additional articles to the existing assortment
› Listing/ Delisting of articles
› Adding new assortment group (i.e. Wellness, exotic fruits,
special dietary etc.)
› Listing of assortment groups
› Restructuring assortment due to category management
(articles with similar characteristics/ use are in the same
area, are promoted in the same way)
› Highlighting special promotion areas
AND:
Better consumer throughput to increase consumption
Anti clockwise rotation
Calm consumers (e.g. with fruits and vegatables)
Name four different store layouts.
Grid (LIDL)
- Well organized and familiar
- Also cold and stimulates rushed behavior
Loop (IKEA) - as much merch exposure as possible
- Unique layouts - high exposure rates
- Also frustrating for quick shoppers - discourages browsing
Free-Flow (Urban Outfitters) - creates patterns on sales floor
- Free browsing - better impulse buys
- Not optimized floor space - complex stock handling
Diagonal (DM) - sightlines
- Good for lots of product with little space - better security and loss reduction
- Also reduces shortcuts - limits visibility - cramped
Name the advantages and disadvantages of RFID as security system.
Advantages: › Anti-theft security › Work-relief › Simplified purchase process › Unobtrusive and efficient solution
Disadvantages: › Error rate (=possibility of no activation on leaving the store) › Collection of customer data to e.g. track their movement profiles
Gerry Weber now sews RFIDs into clothes
› Explain the purchasing process in e-commerce and specifically address the changes compared to stationary trade.
The change revolves around shifting the point of purchase from in-store to online.
PRODUCTS are selected before VENDORS
Online channels have a higher customer focus, can manage more requirements, and are best used when linked with in-store options
› Name the three most important challenges of stationary trade.
- Focus on Customer
- Increasing Customer Requirements
- Linkage of online and offline channels
› Why are FMCGs purchased offline?
FMCG - Fast Moving Consumer Goods
Better bought offline because they are often perishable products that fit better to an already mobile purchasing environment (already out - not sitting waiting)
› Name and describe the three main challenges in e-commerce.
Last Mile Delivery - least efficient and costliest section of entire supply chain
Warehousing - unpredictable buying patterns and required 24/7 operations
Reverse Logistics (Returns) - how to manage pickup / processing / fraud / shipping errors / reduce future returns?
› Explain the current and future solutions to face the challenges in e-commerce. Explain how e-commerce affects warehouses by describing the challenges and
solutions.
Last Mile Delivery
Current:
1. Single warehouse locations distributed over the
country to meet local needs and warehouses near
population hotspots
2. Invest in smaller trucks and vans
(more frequent last-mile deliveries)
3. Cooperations with efficient logistics firms to use
synergies and an extensive flexible network of trucks
4. Long-haul delivery with JIT delivery
Future:
1. Usage of predictive software
2. AI/ML to understand customers’ behaviour
3. Autonomous trucks and drones
4. Sustainable reverse logistics
5. Robotic warehouses
Warehousing 1. Locations are nearby high population clusters (e.g. Ruhr area) 2. Warehouses are evenly distributed for short and fast deliveries 3. Warehouses are highly technological developed 4. Designed for small orders and operating 24/7
Reverse Logistics (Returns) -
- Reduce false return claims - Prevent Fraud
- Provide sufficient info about the product to reduce returns up front
- Avoid shipping mistakes
- Collect data about the cause for return
- Make returns positive customer experience
