DSV recently expanded its warehouse capacity in the Netherlands and the United Kingdom to be able to stay ahead of the rapid growth of current and new customers from the footwear. DSV stores millions of shoes at highly specialized logistics sites and thousands of pairs are shipped every day to stores throughout Europe and, increasingly, directly to customers at home.
What makes this market segment so special? What are the specific requirements for the storage, order management and distribution of shoes and how will this industry develop further?
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What should manufacturers and distributors of shoes realize when they outsource storage and order management activities to a logistics service provider?
Most shoes are packed in cardboard boxes. That is easy when handling and storing. But when you compare footwear to clothing, shoes are a bigger challenge because there are more sizes. A T-shirt may be available in sizes XS to XL, while you will have to deal with many more sizes of shoes and sometimes also with widths. Footwear is therefore more complex. Shoe brands are increasingly working with multiple sales channels - wholesale to other retailers, but are also active in sales and e-commerce. These three channels each have different requirements. At wholesalers bulk shipments are used, often there is a need for value-added services, which emphasizes a potential stumbling block from delivering directly to a distributor from the factory. With international brands, there is a need for consolidation at the point of origin, especially with cross border or cross continent, where the same brand wants to deliver directly to both the Asian market and the European.
Which aspects of logistics for shoes cost the most time and energy when implemented at a logistics service provider?
Think about the scalability, the larger the customer, the more accurate the transfer to a logistics service provider must be, we have come to the conclusion that a transition period of six months must be allocated. A logistics service provider must be flexible with regard to capacity expansion as a result of seasonal demand. Customers who suddenly have to deal with a peak demand need a logistics service provider that is flexible enough to be able to deploy extra capacity immediately if necessary. On the other hand, demand can also suddenly decrease, for example due to weather conditions. It is therefore essential to see the logistics service provider as a partner and not just as a supplier. It can therefore be difficult for shoe manufacturers to estimate the quantities that they have to transfer to a new logistics service provider. That is why flexibility is so important. The volumes can be very unpredictable.
The future of the footwear industry?
One of the most important challenges for companies is handling 3D printing. Many people are skeptical about 3D technology for shoes, but it is already happening. It will not play immediately, but we must be prepared for developments. What also needs to be looked at is the increased need for the visible supply chain. It is no longer sufficient to know what is in stock in the warehouses, you also need to know what is available in stores and at customers. The requirements are changing - there are no longer two seasons. Look at Primark and H&M, two leaders in the field of fast fashion. Collections change every six weeks, which leads to much more pull than push logistics.
Any last comments about the future of the footwear industry?
Customers are expanding internationally, so more and more distribution centers are needed. We can start with a local DC and then merge or expand it with another DC in another country. The cross-border potential is becoming increasingly important. E-commerce - brands want to sell in more and more countries. The challenge lies not only in meeting this need, but also in managing the flow of returns. Some brands have outsourced their sales to a distributor, but want control back later. The major brands offer fewer licenses, so they need more DCs for both the sports shoe market and the leisure shoe market.