FLEGGAARD MOVES BOUNDARIES FOR CUSTOMER SERVICE AND OPERATING EFFICIENCY

The ever-increasing trade via the Internet is affecting everyone in the retail trade, including the border shops. For Fleggaard, changes in customers’ purchasing patterns were crucial to the decision to build a new Click & Collect warehouse to service the 7 Fleggaard and Calle stores in the central border area around Padborg, Denmark. The project was carried out in close collaboration with Langebæk, consulting house within Supply Chain, logistics and warehousing.

More than expected

Nikolai Fink is marketing director at Fleggaard and has an office in Harrislee, where the new Click & Collect warehouse was taken into use a year ago. Already during the initial tour of the warehouse, he makes it very clear how happy he is with the solution, and emphasizes that he is certainly not the only one:

“Since the warehouse was taken into use, the number of customers has increased by more than 30% , and customer satisfaction is very high. In addition, we have reduced costs per. order by at least 30%. “

The significant figures are inextricably linked to the fundamental improvement in the customer experience made possible by the new warehouse. But it’s still only one side of the story. The construction of the warehouse and the centralization of the Click & Collect business also meant significant improvements for the operation itself.

From store operation to warehouse operation

The new warehouse with its approx. 1,500 sqm may not be among the largest in the retail industry. And since it – so far – is almost 100% manual, it is also not among the most advanced. But it does matter to the business anyway.

“The challenge for Fleggaard was to devise and implement a completely new operating model for Click & Collect, which would accommodate a larger product range, higher product flows and volume, as well as improve our customer service,” says Nikolai Fink.

“When we decided to centralize Click & Collect, in other words, we went from focusing on store operations to focusing on warehouse operations. It was completely new to us and it quickly became clear that we needed help to execute the decision. ”

Changes in purchasing patterns

“The background for the decision was changes in customers’ purchasing patterns. An increasing number of customers took advantage of our pick-up offer, which meant that employees in the store that the customer ordered from via the internet, picked up the goods from the shelves in the store and made sure that they were delivered within the agreed time.

“The shops managed it all themselves. But as more and more customers chose to take advantage of the pick-up offer, the stores increasingly hit their capacity limit, ie. the ceiling for how many customers they could manage to service for the desired periods of time per day. In other words, we got a little too often in a situation where we had to disappoint the customer. It is obviously not so good for the business in the long run. ”

“At the same time, the process of filling the orders went beyond the shopping experience in the stores, where customers had to struggle a bit to get to, because the employees with pick-up trolleys filled a lot in the hallways. It also made both customers and employees, especially during the very busy periods, feel more stressed than good. So we were well aware that we had to do something. ”

Click & Collect central warehouse

“However, expansions of our existing stores could not be considered. The rules here in Germany limit our options in that direction. We must not build more or larger stores than those we already have. We had to find another way to increase our capacity constraints and improve the customer experience. ”

“In a way, centralization of the pick-up offer in the individual stores was imminent, as on paper it met both success criteria. But at the same time, we were a little worried about what that would mean for the individual store. A large part of what customers order the large, heavy goods online, pick them up first, park the car and then go into the store to shop further. Would customers accept that they had to drive somewhere else to pick up their goods? Would they buy less or visit us less often for that reason? Would they completely opt out of us? Those were some of the questions we struggled with. ”

“Despite the uncertainty, we chose to move forward with centralization. It has proven to be a good decision. We have gained more customers and revenue has increased because we can meet the increasing demand and at the same time have raised the level of service in the store. Only one of the stores has experienced a slight decline. The customer analyzes we have made in the wake of the project point only in a positive direction. ”

Professional and pragmatic

“We chose Langebæk as advisor on the project primarily on the basis of two things. First, we were familiar with their work for other retailers, including Matas and Nemlig.com, and, secondly, they were warmly recommended by the people in our network with whom we inquired.

“It has been a real pleasure to work with the team from Langebæk. Not only are they extremely competent, they listened attentively to us, familiarized themselves well with our business and business conditions, took into account our existing investments such as. our WMS, and came up with relevant and feasible recommendations. We have largely implemented the solution they recommended. ”

“It was especially in the analysis phase, where our capacity needs, capacity constraints, product flow and volume had to be elucidated, and in the planning phase, where the new processes had to be devised, that Langebæk proved their worth. Without them, we would not have had the faintest idea of ​​how big the new warehouse should be or how it should be arranged so that we could get the most out of it. ”

End of filling up and filling from the shelves

“Before we got the Click & Collect warehouse, all the goods were inside the store. When the goods arrived, we filled up the shelves in the store. Then the pickup orders were filled from the shelves. It provided a lot of duplication of work, slow processes and contributed to a less than good customer experience that we have already mentioned. ”

“Today it is completely different. All high-frequency and high-volume items are picked directly at the warehouse, while low-frequency and low-volume items are picked at the store here in Harrislee. With the new processes that Langebæk defined, we can pick all the goods we need from the store before it opens, so that employees with picking trolleys are no longer a nuisance to customers. At the same time, we have optimized other processes, e.g. by introducing location management and hand scanners. Finally, product delivery has been improved with the possibility of further optimization. ”

“The new warehouse has been in operation for approx. 12 months. We are not quite up to the maximum order quantity the warehouse can handle, but are somewhere between 80 and 90% along the way. It has given us a huge gain already. Going forward, we will work with optimization – perhaps using vending machines – and investigate whether we can utilize our newly gained experience in the other border areas (ed: Fehmarn and Tønder). ”