Sage’s dynamic product range – from blenders to waffle makers – aims to inspire people to impress with ease in their own kitchens. Customer insights are at the heart of the design and innovation that drives it forward. Operating in a highly competitive logistics landscape, the omni-channel brand is under increasing time and cost pressures as it sells its products to consumers through third party-retailers and online via web stores and marketplaces.
A central European Distribution Center (DC) in Prague has been at the heart of Sage’s distribution activities since it centralized its European B2B and B2C fulfillment there in 2018.
The exception was the UK market served from a UK B2C DC, run by a 3PL. The intention was to close that and consolidate all B2C operations in Prague.
However, with transit times already under pressure from UK customers who expect delivery to the door within 48 hours, shipping goods from Prague was set to take longer with new regulations arising from Brexit in January 2021. Cost to serve was also coming into focus, as the expense of shipping charges for UK customers from the Prague DC looked set to increase due to Brexit.
Having establised a good working relationship as the operator of its DC in Prague, Sage invited DHL to handle its B2C fulfillment in the UK.
DHL Supply Chain Solution
The DHL Fulfillment Network has provided a fast, low-risk solution to meet Sage’s specific needs in the UK within a three-month time frame.
The new e-commerce product is a modular, pay-as-you-use model that uses standardized operational and IT processes, which has simplified the transfer period of the operations through simple integration with Sage’s existing marketplaces and carriers. Its modular structure gives Sage the flexibility to continue working with the UK carriers it previously worked successfully with. It also offers scalability for the future with pay-per-use commercials and volume-based rate cards that support market expansion, agility and growth.
Furthermore, the EFN gives Sage the competitive advantage it needs in the UK, using a one-stop-shop IT solution that can satisfy increasing customer demand for transparency and visibility of orders from web click to doorstep delivery.
The trust and understanding that had already been established between DHL and Sage during the working partnership in Prague has allowed a smoother start for Sage’s new UK distribution center.
The successful transfer of its existing B2C UK operation to DHL has enabled it to hedge the risks associated with Brexit. It is also able to consistently provide the competitive 24-48 hour service it needs to offer buyers at a cost-to-serve that is viable for the business.
To date, delivery orders have met the 98.5% performance target for Next Day and Standard Service.
Using DHL’s EFN service has also brought about cost benefits, as Sage has reduced the costs to serve compared to its previous 3PL in the UK while mitigating an increase in its last mile delivery costs that would have resulted from shipping on international rates from its Prague DC. With the ability to benefit from next day delivery in the UK, Sage’s customers are less likely to abandon orders in baskets because of delivery costs or transit times.